Real EstateReal estate for Seniors March 3, 2023

What’s new in 2023’s real estate market in South Florida?

It’s been a few months since I’ve posted a blog, and I apologize.  Much like most of you, I am trying to make sense of what is happening in the real estate market in South Florida in particular.  Actually, 2023 has started off very strong for me with many of my longtime clients putting the properties on the market, believing that the market correction is coming and preferring to cash out now.

While many of the west coast states are having a pricing downturn, South Florida continues to remain stable, with a few hot areas, as our inventory remains between 3-4 months.  As a reminder, a balanced market means about 6-8 months of inventory.  Our prices have started for flatten, in reality.  How is that, you ask?

South Florida’s weather, no income tax at the state level, and general appeal continue to bring new residents to the area.  In my words, this isn’t really the US.  It’s more like North-South America or the northernmost Caribbean nation.  For newcomers, they cannot get over the weather, as a #1 allure. Yes, summer is hot, but there’s usually a breeze, and the beaches.  No shoveling of snow, no sloshing through mud, just lots of green.  Yes, the occasional hurricane, but it’s a remote possibility.

So why is our inventory still not up to where it should be?  Apart from those still coming from the US along with other foreigners creating demand for South Florida housing, there are those locked-in to interest rates under 3%, where there is no incentive for them to sell.  Unless they are moving out of the general area, they would have to buy something else and have a mortgage rate above 6%.  Read this Fortune article

What are my predictions for 2023?

a.  I believe the foreclosures that were suspended during the pandemic will be revived – forcing those owners to sell at least with a bit of a profit, since prices have increased since when they defaulted.  (I am already seeing more cases on the docket calendar)

b.  Jobs continue to be strong, but there will be some sectors that will start seeing a slowdown.  Those with jobs may become more frugal.  Those without jobs will start selling to move to lesser-expensive areas.

c.  Affordability continues to be a struggle in South Florida.  Those priced out will move to lesser-expensive areas or move back home with family. Large, multigenerational properties where families can share the spaces and qualify together for the mortgage will become more popular.

d.  As inflation continues to take its toll on daily expenses, people may opt to go without the extras.  Credit card usage has hit a record high and those people with a bit of financial difficulty may default.  I believe we will see an uptick in Bankruptcy filings by the end of 2023.

e.  Auto loan defaults will also increase by the end of 2023 in this area.  They have already started on the west coast.

f.  There will be an increase of homes coming to market resulting from probate or estate sales.

There is so much to talk about, so call me if you want to share a conversation over coffee!