We live in a world of “increasing everything.”
To start, according to HousingWire Lead Analyst, Logan Mohtashami, the following are realities in today’s national real estate market:
* Home prices are up over 40% in the last two years
* Mortgage rate increases are up about 143% in two years
* Total housing costs are up almost 84%
* Price cuts percentage should increase, yet in today’s real estate market they are 4% below 2022
* Normal US housing sales are around 6 million units. 2023 is on track to hit about 3.96 million. That’s a drop in overall sales by over 33%
* Demand has fallen while supply is low
* And in Florida, the percentage of cash buyers is around 40%. But when you peal back the onion and look at city-by-city you’ll see a different story. Have a look:
The one bright spot for Florida homeowners is Florida’s existing home sales are up 6.1% from September 2022 (YOY). Compare that to California who’s sales are down 21.5% over the same period.
Florida’s Real Estate Market and Insurance
What Logan didn’t mention was the cost of homeowners insurance in many parts of the US is up a lot, too. And, it’s becoming a nuisance for homeowners as it drives up total housing costs.
Florida leads the way with the average homeowners insurance policy hovering near $4,231 annually. That’s triple the national average. Year-over-year, the average cost of home insurance increased 33% in Florida versus 9% nationally in 2022.
To get you caught up on Florida’s homeowners insurance debacle, watch my latest video I know you’ll find it informative and enlightening.
And then there are our electric bills. A Florida Power & Light (FPL) settlement led to a $692 million rate increase in January 2022 and another $560 million hike that took effect this year. The wide-ranging settlement also included such things as allowing increases in 2024 and 2025.
I’m certain you’ve seen your electric bills rising this year. But none of this is slowing down Florida’s real estate market… at least not for now.
Knowing all this, there are STILL over 350,000 people moving to Florida each year. They’re getting away from places that are worse off than Florida. That could be colder weather, higher taxes, or just seeking a tropical lifestyle they’ve dreamed about.
With that perspective, I’m ok with everything increasing. After all, It’s taken over 15 years to get to this point after the Great Recession of 2008 that obliterated our real estate market. Things are much better today than they were then.
[Main Photo is Deck 84 restaurant & Atlantic Avenue bridge]
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*** Contingencies are back. For a quick refresher, read this.
*** The Delray Beach Art & Jazz On The Ave is tonight. Come on out and kick off high season in style. For all details, click here.
*** This weekend is PACKED with Halloween events. From Delray’s annual Witches Ride to our Halloween parade…
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***Our local real estate market Inventory is Rising FAST – UP 21% in the last 88 days!
* 4 years ago there were over 54,000 properties available in S. Florida
* It bottomed in February 2022 at 14,485… a 73% drop
* Last week there were 32,292 available… a 101% rise in 20 month
*** This morning’s Inventory is 33,209! ***
That’s an INCREASE of almost 1000 Units in One Week!
