Tuesday, April 16, 2019

Florida's Real Estate Market--a Forecast

Florida has captivated the imaginations of winter-weary Americans since the Gilded Age.  Its tropical climate and its sandy, palm-lined shores have been drawing visitors since the 1920's.

However, things really began to pick up once people began moving there en masse.  The advent of air conditioning in the post World War II era made this a reality, starting a steady long-term run-up in housing prices.



Things haven't always been perfect--economic disruptions like the 1970's oil crisis have triggered periodic pullbacks.  However, none of these held a candle to the carnage the Great Recession unleashed.  After peaking at an inflation-adjusted high of $475,000 in 2007, Metro Miami prices spent 2008 and 2009 in a free fall before bottoming out at around $200,000 in 2012.

From that point, prices began their recovery.  From 2012 to the present day, statewide median prices have risen from a low of $123,000 to $230,000 at the end of 2018.  In 2012, the average home spent 120 days on the market--during the 2018 peak selling season, that number was as low as 83 days.

Is the Florida housing market set to return to the heady days of the mid-2000's?  That's the question we'll attempt to answer here.

Where are Prices headed in 2019?

Prices have been in a steady upward trajectory since they hit rock bottom in early 2012--but will this trend continue into 2019?  While concerns about the global trade war and increasing interest rates persist, there are no imminent signs of a crash on the horizon.

What factors are expected to fuel an increase in real estate prices for the seventh straight year?  What are the main downside risks?



Trump tax cuts:
In 2017, the Trump Administration advocated aggressively for unprecedented tax cuts.  While these reductions took effect at the start of 2018, many Americans neglected to adjust their withholding.  Therefore, as the 2019 refund season unfolds, millions of Americans will find themselves with an unexpected surplus of cash on their hands.

What does this mean for the Florida housing market?  House hunters will have more money available  for down payments.  Take a married couple with a household income on $100,000, for example: they now pay a 22% rate rather that 25%.  Combine that with a near doubling in the standard deduction to $24,000, and they will have $7,000 more to spend compared to last year.

For many investors, this will provide enough liquidity to make deals that may have not been possible before the Trump tax cuts took effect.

Historically-low interest rates:
After eight long years of being stuck at 0.25%, interest rates have been steadily rising since 2016.  As 2018 drew to a close, interest rates sat at 2.5%.  While this will put affordability pressure on would-be homeowners, it's also a catalyst for price increases in 2019.

Borrowing money may no longer be 'free,' but the cost of doing so is still low by historical standards. As recently as 2007, rates were as high as 5.25%.  Turn the clock back to 1989 and it was 9.75%.  Back in the inflation-wracked days of 1981, it peaked at an eye-popping 20%!

Bearable for those with a fixed rate mortgage--good luck if you're trying to buy though.  With rates near historic lows and no end in sight to interest rate increases, home buyers will be increasingly motivated to lock in a low rate while they still can.

Trade war fallout:
The effects of the Trump trade war remains to be seen, but experts warn it will have a net negative impact on Florida's economy.

While Florida's tourism industry has not been directly impacted by retaliatory tariffs, Trump's singling out China may end up doing significant damage.  According to Roger Dow, president of the U.S. Travel Association, Chinese tourism has surged more than tenfold over the past decade.  If this trade conflict continues to escalate, any restrictions placed on travel to America could have a chilling effect on Florida tourism operators.

Agriculture is Florida's second largest industry--unlike tourism, it has been directly affected by retaliatory tariffs.  A joint study published by the National Retail Federation and the Consumer Technology Association projects that Florida could shed up to 7,000 jobs in 2019 due to reduced exports.

14% of Floridians are employed in agriculture and agribusiness.  If this trade war continues to grind on through 2019, it could apply significant downward pressure on markets outside the Miami, Orlando, and Tampa Areas.

How can I prime my property to sell?

Whether you've been holding since 2012 or are buying Florida real estate in 2019, maximizing your return on investment should be your top priority.  Maintaining curb appeal through landscape improvement, painting interior walls, and updating the kitchen/bathroom are a few ways this can be done.

However, many real-estate investors neglect to take out a home warranty on their properties.  This is a huge mistake--for example, most homeowner insurance policies will not cover faulty wiring, as it is deemed a wear and tear issue.

This is where home warranty policies come into play.  By investing several hundred dollars per year into a plan, thousands of dollars in maintenance and replacement costs can be saved.  A central air system costs $5,500 to replace on average--in comparison, paying $50 per month is a much better deal.

It gets better though: when you decide to sell, your property will be worth more in the eyes of buyers.  According to a study done by the Service Contract Industry Council, houses under a home warranty contract sold for $2,500 more and 16% quicker than those who lacked one.  Floridians can be served by at least 7 companies, among them Sears home warranty.

The 2019 Florida real estate forecast: sunny, but with headwinds

You can expect the Florida real-estate market to increase in value Year-Over-Year.  However, as the impact of the global trade war becomes clearer, increases in land values may be more modest than those in past years. 

42 comments:

  1. This particular is usually apparently essential and moreover outstanding truth along with for sure fair-minded and moreover admittedly useful My business is looking to find in advance designed for this specific useful stuffs… blue world city islamabad

    ReplyDelete
  2. Küresel emlak sektöründeki deneyimimiz, profesyonel aracıları ve geliştiricileri belirlemek için bize birinci sınıf bir konum sağlar ve müşterilerimizin işbirlikçilerimizle herhangi bir mülk yatırımı satın almadan önce tam bilgi almalarını sağlar. fethiye rodos feribot

    ReplyDelete
  3. Wow, cool post. I’d like to write like this too – taking time and real hard work to make a great article… but I put things off too much and never seem to get started. Thanks though. túlméretes szállítás Europa-Road Kft

    ReplyDelete
  4. I truly appreciate this post. I?ve been looking all over for this! Thank goodness I found it on Bing. You have made my day! Thank you again https://www.strawhomes.com/commission-calculator-realtor-fees-in-vancouver-net-sale-proceeds-for-sellers/

    ReplyDelete
  5. If you have an official state medical certificate from your own country (a certificate from your GP is not acceptable) you do not need to undergo the Hungarian medical certificate procedure. You will, however, have to take the medical certificate issued abroad to the ÁNTSZ for approval. The medical certificate is valid for three months from its issuance. real estate Budapest

    ReplyDelete
  6. Hey what a brilliant post I have come across and believe me I have been searching out for this similar kind of post for past a week and hardly came across this. Thank you very much and will look for more postings from you.ki residences condo

    ReplyDelete
  7. When buying villas, condominium units and apartments, make sure that the contract you are signing to buy the property indicates that there is a one-year clause for free maintenance in case there are issues that arise when you newly transfer in that property. Also make sure there is a defect guarantee on the structure for at least 10 years, to ensure that the real estate that you are buying is of high quality. buy real estate in dubai

    ReplyDelete
  8. Generally I don’t read post on blogs, however I wish to say that this write-up very pressured me to try and do it! Your writing style has been surprised me. Thanks, very nice post. Rumah mewah asri di Bogor

    ReplyDelete
  9. The information base of private, land, and more modest pay delivering properties (counting some business properties) is ordinarily alluded to as a different posting administration (MLS). NW Calgary homes for sale

    ReplyDelete
  10. Improvements are really important and staging as well will help in getting the best possible price when selling your home. After the improvements, it is also good to get a professional photographer to take photos of your home that will highlight the areas of your home and help to attract potential buyers. Awesome blog by the way and thanks for sharing

    ReplyDelete
  11. condominium units and apartments, make sure that the contract you are signing to buy the property indicates that there is a one-year clause for free maintenance in case there are issues that arise when you newly transfer in that property. Also make sure there is a defect guarantee on the structure for at least 10 years, to ensure that the real estate that you are buying is of high quality

    ReplyDelete
  12. Hi, Our fully furnished and well equipped apartments available for short term rental between 1-6 month or long term from 6 month onwards for affordable monthly rentals, together with the comfort of a weekly cleaning service if desired. Everything like electricity, heating, TV, WiFi, washing machine/dryer, water, taxes, common fees are included. Just send us details which kind of apartment you are looking for e.g how many bedrooms, which district, renting period … and we will find the perfect place for you. Just fill out the contact form next to the listed apartment. Budapest mieten

    ReplyDelete
  13. Hi, Our fully furnished and well equipped apartments available for short term rental between 1-6 month or long term from 6 month onwards for affordable monthly rentals, together with the comfort of a weekly cleaning service if desired. Everything like electricity, heating, TV, WiFi, washing machine/dryer, water, taxes, common fees are included. Just send us details which kind of apartment you are looking for e.g how many bedrooms, which district, renting period … and we will find the perfect place for you. Just fill out the contact form next to the listed apartment. Budapest Immobilien

    ReplyDelete
  14. Hello, Focusing on the database has become such a necessity today especially in today’s data-driven technology and internet with millions and billions data storage capacity into various storage points. It’s good to see this article start with a data set point. Home Appliances

    ReplyDelete
  15. One real estate proficient was in a home, nursery and home improvement shop a couple of schedule weeks back and went past two or three people in a passageway. Pre construction condos Toronto

    ReplyDelete
  16. We offer a comfortable and trouble-free holiday experience in our motor yacht charter and luxury gulet charter services. We have a portfolio that meets all luxury demands such as jacuzzi, speedy, air-conditioned in all our motor yachts. For more visit gulet charter turkey

    ReplyDelete
  17. This comment has been removed by the author.

    ReplyDelete
  18. Nice post! This is a very nice blog that I will definitively come back to more times this year! Thanks for informative post. seller leads

    ReplyDelete
  19. The material Income charge rules related to NRAs can be very perplexing, yet when in doubt, the pay that IS liable to retaining is a 30 percent level expense on "fixed or definable" - "yearly or periodical" (FDAP) pay (starting in the US), that isn't successfully associated with a U.S. exchange or business that is liable to retaining. Significant point there, which we will address immediately. https://www.ryseresidences.sg/

    ReplyDelete
  20. Allentown, Pennsylvania Real Estate Solutions For Sellers, Investment Property Buyers, And Investors. We buy, fix, and sell Pennsylvania real estate to improve our communities and help local investors participate in the real estate market right alongside us.utopia rei group llc allentown pennsylvania

    ReplyDelete
  21. I’ve been surfing more than three hours today, yet I never found any interesting article like yours. It’s pretty worth enough for me. In my opinion, if all webmasters and bloggers made good content as you did, the web will be a lot more useful than ever before. discounted real estate sales

    ReplyDelete
  22. I prefer merely excellent resources - you will see these people in: https://yes-mallorca-property.com/offers/sale/

    ReplyDelete
  23. Wow, cool post. I'd like to write like this too - taking time and real hard work to make a great article... but I put things off too much and never seem to get started. Thanks though. discounted real estate buyer in Pittsburgh

    ReplyDelete
  24. Nice to be visiting your blog again, it has been months for me. Well this article that i've been waited for so long. I need this article to complete my assignment in the college, and it has same topic with your article. Thanks, great share.
    house for rent in chiang mai

    ReplyDelete
  25. Notwithstanding having individuals attempt to discover you rather than you attempting to discover them, there is another advantage to publicizing to create real estate leads. immobilier angers

    ReplyDelete
  26. Hey there! I simply would like to give you a big thumbs up for your great info you've celebrity real estate got right here on this post. I'll be coming back to your web site for more soon.

    ReplyDelete
  27. Nice post! This is a very nice blog that I will definitively come back to more times this year! Thanks for informative post. best house deals in florida

    ReplyDelete
  28. Thanks for a very interesting blog. What else may I get that kind of info written in such a perfect approach? I’ve a undertaking that I am simply now operating on, and I have been at the look out for such info. homes for sale in vacaville ca

    ReplyDelete
  29. The most ideal approach to do real estate lead age likewise turns out to be quite possibly the most troublesome - at any rate in the first place. Bahamas Realty

    ReplyDelete
  30. I have composed before about the need to practice due constancy when buying business land. The need to research, prior to Closing, each huge part of the property you are securing.fast flirting

    ReplyDelete
  31. Wide scope of classes: Mashable has standard crowd spread across geeks, marketers, business experts, and easygoing social aficionados. So they ensure that each blog entry has an expansive allure. Mashable bulletin keeps you refreshed on a wide scope of related classifications and gives you a decent large scale picture. Leads genereren

    ReplyDelete
  32. What an interesting premise, and a fascinating way to go about telling a story! I like the innovation, and it sounds as though the memoir part and the fiction part blend together effectively. Glad you enjoyed it, Hayley.private health insurance for my family

    ReplyDelete
  33. What an interesting premise, and a fascinating way to go about telling a story! I like the innovation, and it sounds as though the memoir part and the fiction part blend together effectively. Glad you enjoyed it, Hayley.private health insurance for my family

    ReplyDelete
  34. US property, I think this is an informative post and it is very useful and knowledgeable. therefore, I would like to thank you for the efforts you have made in writing this article.

    ReplyDelete
  35. multiple times out of 10 I get a message gadget or replying mail. This is a huge mood killer to someone who needs a goal to their real estate inconvenience now. Ramen Leuven

    ReplyDelete
  36. Its like you read my mind! You seem to know so much about this,like you wrote the book in it or something. I think that you could do with some pics to drive the message home a bit, but other than that, this is great blog.millionare dating

    ReplyDelete
  37. I'm really loving the template/theme of this website. It's simple, yet effective. A lot of times it's challenging to get that "perfect balance" between user friendliness and appearance. I must say that you've done a superb job with this. Also, the blog loads very fast for me on Internet explorer.millionare dating

    ReplyDelete
  38. Wish I could add to the conversation and bring a bit more to the table, but am just taking in as much info as I can at the moment.click here

    ReplyDelete

  39. Excellent read, Positive site, where did u come up with the information on this posting?I have read a few of the articles on your website now, and I really like your style. Thanks a million and please keep up the effective work.sugar daddy

    ReplyDelete
  40. Thank you again for all the knowledge you distribute,Good post. I was very interested in the article, it's quite inspiring I should admit. I like visiting you site since I always come across interesting articles like this one.Great Job, I greatly appreciate that.Do Keep sharing.sugar daddy

    ReplyDelete
  41. Positive site, where did u come up with the information on this posting?I have read a few of the articles on your website now, and I really like your style. Thanks a million and please keep up the effective work. here

    ReplyDelete
  42. Yeah, technology is going to change the business market of the world as it is getting better and better day by day and helping the business owners to get a big amount of profit form the business. By using technology, they can run the business easily without the difficulties.sugar daddy

    ReplyDelete