Is it just me or does it seem like everybody is asking about future home price appreciation rates for SW Florida? Maybe it’s because we are in real estate, but it does seem to be a topic discussed more often.
It is dangerous to predict where the market will go. It tends to go where it wants to regardless of where you want it to or think it should. Zillow recently admitted it cannot predict future home price appreciation rates. If a big company cannot do it, why would anyone think they can?
The truth is nobody can. And yet, all of us have a lot more knowledge than Zillow and could probably do a better job. They tried to analyze home values and future prices on a national scale, and we all know real estate is local. There are some factors in play we have never seen before, so some of the traditional economic truths may not apply 100%.
Positive Factors
The truth is, Florida is desirable to many people across America, like never before. We have always been desirable in terms of sunshine, weather, and no state income tax. Today, it is much more than that.
We are not taking any political stand. All we can do is report what we hear buyers saying. Buyers moving to Florida feel Governor DeSantis is a rock star and they appreciate the way Florida has handled lockdowns, mandates, and taxes. I am sure we do not hear from some buyers who would never move here because they disagree, however the net migration into the state speaks for itself. Going forward, we do not see this changing, and this is a plus for Florida’s housing market.
Florida is open for business and businesses are choosing to move here. We are seeing businesses and work from home families moving to Florida, and this trend should continue as well.
Interest rates are still low. Low rates are good for real estate markets.
Negative Factors
Rates are expected to rise. Rising rates cost the buyer purchasing power, so in a balanced market that eventually effects sellers. We are not in a balanced market or even close to it now.
Vaccine mandates are causing people to lose their jobs. If the mandates stick in the courts, this could eventually trim the buyer pool as they must live off savings. Already we are hearing about US savings accounts ballooning $4 Billion during the lockdown and that number is back to even now that stimulus has ended for unemployed in the lockdown. This should force more to go back to work, and we saw signs of that in the latest jobs report. If new mandates kick in January 4th, it could change the savings rates.
Inflation is like a hidden tax on consumers. Many are seeing a rise in paychecks. Those gains are being eaten up by rising gas, food, shipping, housing, automobile, and virtually any other expense you can think of. Inflation is outpacing income. As companies are forced to raise wages, it increases inflation even more. It is a never-ending cycle that must end, or it will not help the real estate market.
Predicting the Future
As you can see, predicting future home price appreciation rates was never easy, and with new forces in effect it is virtually impossible now.
We see interest rates rising in 2022 so that should be a motivating factor for buyers. We see good things for Florida for the next several years. The jury is still out for the rest of the country. We suspect many markets will do very well while some may lag. If buyers are waiting for home prices to fall off a cliff, they might be sorely disappointed. If sellers are waiting for another year of 20-30% price gains, they might be disappointed too.
When you are ready to buy or sell, Always Call Sande or Brett Ellis at the Elis Team at Keller Williams Realty 239-310-6500 Or visit www.SWFLhomevalues.com to find your home’s value, or www.LeeCountyOnline.com to search the MLS like a pro.
Good luck, and Happy buying and selling!