Studies have shown that each year since around 2014, the housing market has had a steady increase in prices and took a shocking turn when the global pandemic hit.
Though things are slowly returning to the new normal, potential home buyers and homeowners still feel the impact of the significant rate changes caused by the pandemic. There are also the effects of inflation as well along with that.
Though this may be good from the home seller's standpoint, prices are increasing, and the competition is decreasing. However, there's an issue with the supply and demand aspect due to the increase in the construction market. We also need to include the interest rates that may affect the borrower's ability to borrow money for rent or purchase.
Even though the housing market may not be in recession, the construction industry is. The supply of housing is greatly affected by the rising production cost. With the increasing price for lumber, this is already one of the critical factors to consider in the decreasing number of new properties. There is also the labor cost, the restrictions due to local zoning, and the decrease in people listing their property for sale or rent.
From the home buyer or renter standpoint, it is a challenge between their need to purchase or rent a new place somewhere else due to the rise of work-from-home setup and people choosing to live in a more rural area and their affordability to buy or rent a new home with the income rate, inflation, and mortgage rates taken into consideration.
New home buyers have faced more significant challenges since the Coronavirus hit, and even after that because the supply is low despite a rise in the demand. The competition is also tighter, making the available homes close deals quickly. There is also the issue with mortgage and interest rates changing and income rates and the buyers' personal preferences in the home setup.
Research has given us some data regarding the housing market in Florida predicted to stay hot throughout the year unless there is a change due to the mortgage rate changes. The rate increase could factor in slowing down the price increase as it may lower buyer's demand. With the number of people moving to lesser populated areas, this could give more attention to other locations in Florida with smaller markets, providing buyers with more affordable choices.
So, can we accurately predict the price growth in the Florida housing market, given all the factors mentioned? The answer is sure that we cannot provide a 100% guarantee as predictable as the Sunny State weather. But we must understand the factors stated if we want to know more about the housing market's current state to make a sound decision in potential investments.
Based on what we have learned and mentioned, the housing market price has been increasing every year, even before the global pandemic. However, some factors to consider may also stall or delay the growth as they try to curb inflation. And with all this in mind, it will give people a better understanding of today's housing market status.
If you are looking for property managers you can trust, get assistance to answer your real estate concerns, and guide you with your housing needs, reach out to us here at Caravel. We would love to connect and help you out!