Yup, it’s called the roller coaster of life. Roller coasters aren’t for everyone, especially if you’re not in Disney World or another theme park. I think it’s safe to say that the pandemic turned the real estate market as a whole upside down and sideways. It resembled nothing less than a rollercoaster ride for everyone involved – buyers, sellers, real estate agents, mortgage brokers, et al. People were forced to make spur-of-the-moment decisions based on FOMO. Sellers were greedy, buyers were fearful, and agents became order takers. Negotiating went out the window. Now that the pandemic has subsided, the sixty-four-thousand-dollar question is what’s next? Most housing experts are forecasting a definite cooling trend ahead which is especially good news for first-time home buyers. The biggest drivers of the frenzy were the combination of historically low mortgage rates coupled with historically few homes on the market. Both of these have gone up significantly since the beginning of summer.
While no one has a crystal ball it would be safe to say that the last quarter of 2022 will be trending towards a buyer’s market for the first time in over 2 years. To what degree, will depend to some extent on what part of the country one lives in. It was reported recently that Nevada, and specifically the Reno market had the highest rate of home price reductions in the nation – as much as 30% WOW! Reno enjoyed huge run ups in pricing during the pandemic – due to a considerable extent to an influx of Californians looking to escape not only the city life of San Francisco (and the ensuing lock downs and mask mandates) but also the political and business climate of California. By the beginning of summer 2022, Reno flipped almost overnight from a seller’s market to a buyer’s market and virtually skipped the balanced market phase entirely – hardly time to blink. A balanced market is one where there is between four- and six-months supply of inventory of homes to purchase.
Where does this change in the market leave South Florida? Well, I believe that for many years Florida’s real estate was undervalued, so the run up and frenzy that occurred here during the last 2 years just leveled out the playing field. That said, though, it is highly unlikely that sellers can expect to receive multiple offers over their asking price and buyers willing to purchase without any contingencies or inspections. Those days are in the rear-view mirror – at least in the foreseeable future – and I think most people would agree that’s not a bad thing. I feel, though that the market will not only stay intact on the Treasure Coast but remain, dare I say, stable, especially on the lower spectrum of the market. Unquestionably there will be fewer sales and buyers will certainly have more homes to choose from. However, Florida’s lifestyle will remain a huge factor in people continuing to want to own a piece of real estate here. And what won’t be changing any time soon is that Florida enjoys being just one of seven states in the country with no personal income tax.That combination is pretty enticing in good times and bad.
Actually, just for the record, there are a couple of us at Liberty Title who enjoy roller coasters – ask Kelli Ann.