It’s no secret that home sales in Florida are exploding, even though the prices are at a record high and home inventory levels are at a record low.
That’s because the state is experiencing a huge growth spurt in the wake of the pandemic. And it’s not just retirees. It’s also families and young professionals working remotely in the tech and financial industries. The new 360 Rosemary building is a testament to that—the 20-story, 300,000-square-foot, Class A tower is located in the new Rosemary Square development, which is located in the heart of downtown West Palm Beach, which is the biggest city in the largest geographical county in Florida.
To further dig into this upward trend of growth and put things into perspective, here are some stats from October 2021:
- The median sales price of single family homes in Florida rose to 17.7 percent; condo sale prices increased by 17.6 percent.
- Cash sales of single family homes increased by 25.4 percent, year over year.
- Inventory of single family homes dropped by 29.9 percent, compared to a year ago, and condo inventory was down 54 percent.
- Mortgage rates rose slightly to 3.07 percent, up from the 2.83 percent average last year.
- The median price of single family homes in Palm Beach County grew by 6 percent this summer to match its all-time high.
- Because residential real estate inventory in Palm Beach is at an extreme low point and strong demand persists, there has been a 42 percent drop (50 percent for condos) in the average number of days the properties remain on the market.
- Single family homes in the South Florida region were 16 percent overvalued in September, a 14.29 percent increase from August.
- According to the Institute for Luxury Home Marketing, there have been 55 percent more sales than listings in November in the luxury market ($1 million-plus).
Those are the incredible numbers, but what about the demographics—the who and why of the stats?
A significant portion of the massive migration to South Florida, including Palm Beach, over the past year is made up of Northerners coming from as far away as Canada, who are further igniting the hot market by seeking warmer weather and better outdoor lifestyle opportunities in the beautiful Sunshine State. And, it’s a trend that is expected to continue into 2022.
Additionally, lured by the coast’s refreshing lack of the northern metros’ hustle and bustle, and with low taxes that marry nicely with a property purchase, discriminating buyers with deep pockets look to Florida for their winter vacation spot, second home, or rental investment. As reported in Forbes, the two most popular destinations for wealthy New York County residents from January 2020 to January 2021 were Palm Beach County and Miami-Dade County. For example, a newly built mansion that was sold in Palm Beach in February 2021 set a record sale price for the region at more than $120 million.
The only catch for this migration movement of homebuyers is the area’s high stakes competitive sellers’ market, which means in many categories there are little to no inventory—even if you do have plenty of money to spend.
Here are some additional trends to factor into the housing forecast of continued growth in Florida and across the country. According to Realtor.com, as we approach 2022:
- Millennials are on the move. At this time, millennials are finally feeling comfortable enough to be first-time homebuyers. Forty-five million of them will fall into the 26 to 32 year-old age bracket in 2022.
- The suburbs are the sweet spot. Because of the pandemic (and post-pandemic), we have discovered that American homeowners no longer need to live near their workplace. Reports show, in fact, that this remote job flexibility applies to 1 in 5 homeowners—and they are attracted to the ‘burbs, which is much of Florida. Less crowds, a lower cost of living, and more peaceful surroundings make home sweet home all the sweeter.
- Prices and rates will still rise. Potential buyers may realize that expected mortgage rates, rent, and sales prices will still be on the rise in 2022, and the sooner they purchase, the better.
- Increase in Hispanic homebuyers. Statistics show that Hispanics account for 1 out of 10 homebuyers in the market and the rate is continuously growing. This not only effects the nationwide homebuying market, but will be especially prevalent in Florida due to its proximity to Spanish speaking countries.
- Increase in inventory. Believe it or not, Realtor.com predicts a 6.6 percent increase in home real estate inventory for 2022, which will be a relief for potential homebuyers. The forecast is relative to a number of conditions. It is reported that more homeowners are planning to sell their home over the next year, more new home construction is in the works (with some already underway), and time is up for the mortgage forbearance program, which will force more homeowners to list their home.
All in all, according to these sources, as we approach 2022, it sounds reasonable to assume that the Florida housing market will continue to flourish, yielding a very happy new year.
At Rabideau Klein, Guy Rabideau, Esq. and David E. Klein, Esq. are dedicated, Florida Bar Board-Certified Real Estate Attorneys with the local expertise and experience you need to ensure that your interests are protected during your real estate transaction in the Town of Palm Beach and throughout Palm Beach County. Contact Rabideau Klein today to discuss your real estate legal needs.