Is the Real Estate Market in Florida Slowing Down

If you are keeping up with headlines, you may be concerned that the real estate market is slowing down. Rising interest rates and concerned buyers are influencing a cool down in many US markets. In some places and in some ways this is true, but Florida is not feeling these effects. With 25 of the most overvalued housing markets in the nation, Florida remains a hot and competitive place to deal in real estate.

Rising Demand

While interest rates are rising nationwide in an attempt to mitigate inflation, there is a more foundational factor in play that determines housing prices: supply and demand. In Florida, the demand for real estate continues to grow much more quickly than supply is increasing. This rising demand is keeping things competitive in nearly every Florida market.

Rising demand for Florida housing is a result of multiple factors, including an influx of new Florida residents and increasing numbers of real estate investors looking to Florida markets for their new income properties.

New residents are flocking to Florida for many reasons, including political preferences and economic pressure that are both coming as a result of pandemic conditions. In addition to this, Florida remains a popular choice for anyone looking to buy a retirement home or relocate to a warm and sunny climate.

Real estate investors have always looked to Florida as a lucrative vacation rental market, but this has only increased in recent years. Florida was one of the first beach vacation destinations to open up after the pandemic, making it a prime choice for those looking to invest in properties that would be immediately rentable.

All factors that are increasing demand in Florida are expected to remain present in the market for the foreseeable future, meaning you can reliably expect your investment in Florida real estate to continue to appreciate.

Limited New Construction

Not only is demand for Florida real estate rising, but with a limited supply, prices remain high. New construction developments in Florida are few, meaning there is not a significant change in supply to meet the huge increase in demand. Undeveloped land is also in limited supply. These factors both contribute to a remaining strong seller's market in Florida.

Additional: 30 Thrifty Ways to Furnish a New House

Will there be another housing crash?

Click bait headlines wanting of an impending housing crash are popping up all around. Is that something Florida buyers should be concerned about? Experts don't think so. Conditions may look similar to 2007-2009 right before the housing crash, but there are some vital differences that will keep us from another crash.

One of the major reasons a crash like in 2008 is unlikely is supply. In 2008, the housing crash was related to a major surplus in homes as many homeowners entered foreclosure on homes they purchased with faulty loans, which are no longer allowed. In Florida, even if prices were to lower somewhat as interest rates rise, there is little to no danger of having a massive supply surplus. Both renters and homeowners are facing similar price hikes, with many people waiting to invest in the area no matter what the prices are. This steady demand is enough to cover any minimal change in supply.

The general consensus among experts is that some markets will see a decrease in demand, but a housing bubble and crash is highly unlikely. In Florida, even a decrease in demand is not anticipated. Even with higher interest rates, investors, retirees, vacation-goers, and remote workers looking for a new home in an ideal climate will sustain interest in Florida's market.

Now is a great time to invest in Florida real estate. For more information about finding your ideal property on Marco Island, contact us any time.