Planning to be a homeowner in Florida? Real estate across the US has experienced its fair share of ups and downs, especially with the fallout from the pandemic. The real estate scene in Florida is no different. But what does this mean for budding homeowners? Is it the right time to go home shopping? What are the things to expect when examining the real estate market in Florida?
Tom Nickley of The Nickley Group, Orlando’s leading realtor agency, gives his professional insight as to the current situation in the real estate market.
More People Moving In
According to the Orlando Economic Partnership, more than 1,500 people will be welcomed by Orlando every week for the next eleven years. The benefits of living in Florida, like pleasant weather all year and low cost of living, to name a few, are the likely reasons people flock to the Sunshine State.
“There are more people that are moving into Central Florida wanting to buy houses and wanting to take advantage of super-low interest rates than ever before. Sixty-one thousand people moved into Central Florida last year.”
Interest Rates Are Low
With all these people moving into Florida, another factor that drives up the demand for houses is the meager interest rates. These interest rates make borrowing money cheaper and allow them to afford the Florida properties they’ve always wanted.
“…2.5 to 3% is pretty much the standard for mortgages right now, and it is just driving the frenzy for people wanting to take advantage of rates when they’re at these unheard-of levels.”
Increase in Demand
The Florida real estate market has seen a steady increase in demand for properties due to low-interest rates and a growing population. Combining these two factors will result in an increasing demand for Florida properties.
“Sales for February 2021 compared to February 2020, they were up to 20%, which is huge… 20% more homes sold in February of this year than in February of last year.”
Another factor that comes into play is the declining inventory of houses for sale. The massive droves of people moving into the state and meager interest rates drove the inventory down significantly.
“Last year, at this point in time, there were 7000 homes for sale in Central Florida. This year, 4200 homes. That’s 40% fewer homes for sale this year compared to last year.”
When there is a massive influx of people coming in and low-interest rates giving more purchasing power to the residents, this equation will result in higher prices with fewer homes for sale. However, while home values are shooting up, the standard of living for a Floridian remains comfortable.
“The home values from February of 2020 compared to February of 2021 are 10 to 12% higher in 2021… And the great thing is, while prices and values are increasing, Central Florida is still super affordable.”
Seller’s market is a term used for a market condition that sees a shortage of inventory, which gives pricing power to the seller. It allows the seller to dictate the asking price, and sometimes, the bids even surpass the asking price.
“Increased demand, decrease in homes for sale, equals an increase in prices. So that’s really what’s going on in Central Florida. But the great news is, that is really creating an environment that is favoring sellers.”
Cost of Living
Given all these factors, one might ask why people would still insist on moving to Florida. Although the real estate market is competitive and aggressive, it’s still cheaper to live in Florida compared to living in other popular areas like New York and Los Angeles.
“The great thing is, it’s still super affordable. It’s still cheaper to buy than it is to rent. It’s still more affordable in Central Florida than a lot of other big areas across the country.”
The Florida real estate market right now is hectic and competitive. And that could be overwhelming for people who are looking to buy a home, especially if they have no background in real estate. The Nickley Group is here to help. From expert advice to providing you access to verified home listings, and even assistance with the purchase process, our team is standing by to help you find your dream home.
Drop by our office today at 1013 E. Colonial Dr. Orlando, FL 32803, or give us a call at 407.906.2456 to get started.