Are you looking to buy or sell overseas property Florida online in 2022? While it is true that home prices did not grow as fast as you would probably want them to over the last 12 months, it is clear that there won’t be a housing crisis like the one we had in 2008.
The property market situation in Florida is a mixed bag to be fair, as we look ahead into 2022 and beyond. But there’s nothing to be worried about. As John Tuccillo, chief economist for the Florida Realtors says: “We are not going to regress. There’s not going to be a slump or a bubble burst. We have a nice, strong foundation.”
It is true that there hasn’t been a substantial increase in property prices. In fact, growth in plush neighbourhoods such as the Palm Beach and Broward counties in South Florida has ranged from 3% to 9% over 2021 – certainly way below the 20% increase in property value witnessed in 2019 and 2020.
There are a plenty of reasons for such a tepid growth in property value, not the least of which is a decline in interest from Latin American and European buyers because of the stronger dollar. These buyers were the biggest buyers in Florida in the past few years when the dollar was weaker, but now with the U.S. economy taking off and the dollar emerging as the strongest currency in the world, their buying power has gone down quite substantially.
Alicia Cervera, managing partner at Cervera Real Estate explains, “From my perspective, what we’re seeing is a marked slowdown tied to the strengthening of the dollar. The foreign buyers responded to the stronger dollar by stopping in their tracks. That’s fairly common when there’s a significant adjustment in currency.
She adds, “Think of it this way: People were quoted the price of a dollar for a pen. They thought they were paying a dollar. But then with the currency adjustment, they’re now paying $2. If you’re offered the pen for $1, it’s hard to come back and pay $2 for that same pen.”
There are other reasons for the tepid growth in real estate rates, such as an over supply of homes for sale in Florida, which has the effect of bringing down the average price for everyone. This is a big change from 2018 and 2019 as homeowners weren’t too eager to sell in those years as the economy was still recovering from the Great Recession of 2008.
Now, though, there’s a lot of confidence in the U.S. economy and the job situation has been better than it’s been for a long time. So people are more willing to sell their homes and upgrade to a bigger house for their families. So, suddenly, there’s a glut of homes for sale in the marketplace, which has acted as a dampener on home prices. The increase in supply is expected to flatten out prices, especially in the second half of 2022.
There is a cause for optimism too. The recent hike in interest rates by the Federal Reserve would help to stop speculative investment and ensure that only serious buyers get into the market. Also, the other interest rates, such as long term interest rates remain unaffected by the rate hike – so it’s a good thing for the property market in Florida.
As Andrew Barbar, the president of Florida Realtors says, “The increase was long anticipated, and it may even encourage homebuyers who had been waiting on the sidelines to enter the housing market now.” Remember, despite the increase, mortgage rates continue to remain as low as ever – at just 4 percent.
Another factor that will lead to more people buying homes in Florida is that renters are getting squeezed out because of the scarcity of apartments and escalating rents. So, it’s much better to own a property in Florida than to rent one.