Signs of Spring in South Florida: “For Sale”

Spring in other parts of the country might mean daffodils or cherry blossoms in bloom, but in South Florida, the spring season is when things start heating up. And it’s not just the temperatures that we’re talking about. The spring season is typically one of the busiest in the South Florida real estate market.

“The spring season is marked by certain indicators: rising home prices, more sellers putting a home on the market and more buyer interest in the market, especially buyers with families who want to look for a home in the spring when school is out of session and they can resettle in to a new home,” Danielle Hale, chief economist with realtor.com, told the South Florida Sun-Sentinel.

Will Spring Give Homebuyers a Break?

The good news is that real estate experts in South Florida expect an increase in the number of homes for sale. On the downside, it is rather doubtful as to whether that increase in inventory will be enough to satisfy demand. As the Sun-Sentinel reports, “The tri-county area currently has about 4,648 single-family homes available for sale, compared to over 19,000 in 2019, according to numbers from ISG WORLD.”

Unfortunately for those looking to buy a home, there is, of course, more bad news. Interest rates are on the rise. In March, the Federal Reserve raised interest rates by a quarter of a percentage point. It may not sound like much, but considering that this was the first time the Fed had raised rates since December 2018, it was, in fact, a big change.

Where does that leave prospective home buyers? Well, it might depend on whether you see the glass as half full or half empty.

“As we approach the busy spring homebuying season, homebuyers are still likely to face an uphill battle, but it shouldn’t feel anything like 2021,” the experts at NextAdvisor tell us. “Home values skyrocketed by nearly 20% in 2021, according to the most recent data by the S&P Case-Shiller national index of home prices. While housing prices aren’t expected to drop this year, the increasing rate of prices should slow down.”

In fact, they are reporting that a large number of industry experts are thinking that home prices will rise at only about 50 percent of the rate experienced at the height of the market in 2021. So, if you see the glass as half full, you could be looking forward to increases once again in the single digits.

If your glass is half empty, however, you probably can’t get your mind off those interest rates, which are expected to continue rising as the year progresses. For some prospective home buyers, even a slight increase in the interest rate on a home mortgage could be enough to force them to reconsider their budget.

According to NextAdvisor, “Higher rates can eat into your buying power compared to last year.” Don’t get so focused on interest rates, they caution, that you lose sight of what’s most important. Their advice? “Buy when the time is right for you.”

And try to remember that everything is relative. “Experts also point out that these 4%+ rates [on home mortgage loans] we are seeing right now are still considered favorable from a historical perspective. It was only a few short years ago when a “good rate” was around 5%,” the experts at NextAdvisor remind us.

What Does Spring Have in Store for Home Sellers?

The unprecedented shortage of homes for sale continues to spell good news for those who are ready to sell. It doesn’t make sense to sell, however, if your only motivation is to cash in on the favorable market conditions as you will, in all likelihood, find yourself facing the challenge of finding something else in South Florida.

Many experts predict that sellers – especially those with property in highly desirable areas – will receive offers above and beyond their asking price. And they won’t have to wait long to get them either. “While there may be more inventory, after the new year and spring months, competition is very tight,” Bonnie Heatzig, executive director of luxury sales at Douglas Elliman in Boca Raton, told the Sun-Sentinel.

“It’s been a very competitive market for buyers in recent months and as rates increase, we’re going to have to wait and see if that slows down the buyer motivation or not. I think that it’s going to be different for luxury buyers who may not be affected by higher interest rates,” Brian Pearl, principal agent with the Pearl Antonacci Group in Boca Raton, told the Sun-Sentinel.

Whether you are buying or selling, things will continue to move quickly in the South Florida real estate market. You may not have the kind of time you might prefer for considering your options. Working with an experienced Florida real estate attorney like the market professionals at the Palm Beach-based law firm of Rabideau Klein may help you navigate the market to your advantage. Please feel free to contact us with any questions you may have.

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