Remember I told you before about the mass migration to Florida?  Well, it's getting worse!

Hi everybody,  It’s Joe Hillner with Your Home Sold Guaranteed Realty, where we guarantee the sale of your home, or I’LL buy it! 
Ok, so every week, I share market data to keep you informed with the local real estate market.  
Here is this week’s Boca Market Watch.

First, Single Family Homes:

This past week, a  good week with 66 new homes on the market, ranging from $189,000 to $14.8 Million. 18 homes back on the market, while 33 homes listed took a price decrease, and 4 sellers raised their asking price.  And  a light week with only 37 different properties under contract, and another 31 going pending, probably due to the fact that there's NOTHING AVAILABLE!  And just 16 homes were unsuccessful in selling and were taken off the market or the listing expired outright, not many at all.  62 homes were sold in the past week, a so so week and those sales ranged from $270K to $3.8M. 

Next up, Condos and Townhomes:

Only 58 new listings, not good, and ranging from $66 Grand to $1.8 Million.  
25 units came back on the market, 25 properties with a price decrease, and 8 sellers with an increase, very low.  56 different properties went under contract, and another 57 went pending, a pretty fair week. And only 10 condos or townhomes were unsuccessful in selling and were taken off the market or the listing expired, by far the lowest I've ever seen!  85 closed sales this week, another down week for condos, and ranging in price from $51 Grand to $1.7 M!

Here's what's making news right now.

Prior to the pandemic, FL was experiencing a net inflow of 1000 new residents a day, or 350,000 a year.  That's a lot, right?!  Well the latest data indicates that that inflow has increased to about 1300 new residents a day, or 465,00 per year!  And that rate of population growth is expected to continue into the forseeable future.  The projections are that we will gain almost 5 million new residents over the next 9 years, taking us up to 26 million residents statewide by the year 2030.  Where are they all going to live, you may ask.  And that is the real question.  Because, as you know, we are already in a housing crunch and affordable housing doesn't exist in our area.  For sale listings are down 75% from a year ago, when we were already in a seller's market.  And for rent listings are almost non-existent.  Rent prices have shot way up, outstripping increases in wages by a wide margin.  As I've reported, new construction costs are up significantly and builders are focusing on luxury homes where they make more money.

Obviously, FL is a very big state and many other areas are much more affordable than our three counties.  That being said, many of those new residents will want to live in Miami, Ft Lauderdale, Boca or the West Palm area.  And again, how are we going to satisfy that demand for housing?  With the Atlantic on one side and the Everglades on the other, there's virtually no land left to build on down here.  And we still don't know how the tragedy in Surfside will affect the condo market, if at all.  But certainly we can expect that potential condo buyers will be more cautious and careful in doing their due diligence before pulling the trigger.  That will only add more fuel to the fire that is the white hot demand for single family homes.

It still shocks me but I have potential buyers tell me almost daily that they are thinking about waiting till prices come down.  I can appreciate their sentiment - prices are high, but they are only going higher.  Think about it - simple supply and demand dictates that with so little inventory and such an unrelenting amount of demand, that will only increase due to the migration, there is only one way for prices to react and that is to continue to climb.

But it's not all doom and gloom.  Interest rates have bottomed out again. 30 year fixed rates are under 3% and the 15 year rate just hit an all time low over just over 2%!  That's free money folks!  And it gives you a ton of buying power.

Let's look at some simple math.  If you're in the market for a starter home, you're probably going to have to spend $350,000. You can put down the minimum 3.5% down payment of $12,250 and finance the rest at 2.75%, giving you a mortgage payment of $1403 a month.  That's crazy low!

Ok, so you say, "No, I think I'll wait and see if prices come down...".  Based on the market technical factors I've already described, that seems unrealistic at best.  In all likelihood, a year from now, that same house is going to cost you just over $400K, and that's if our current rate of price appreciation drops in half.  And as the economy improves, interest rates will also climb.  So let's be conservative assume rates are around 3.5% next year.  That same house will cost you $1775 a month, or $4460 per year more and tens of thousands of dollars more in interest over the life of the loan, not to mention you just lost equity growth of $50,000.  That's the power of leverage and it should be at the top of your list of considerations when looking at a purchase.

By the way, if you are thinking about buying a home, you might be interested to know that we offer a couple of unique and proprietary guarantees.  You already know about our buy back guarantee.  But consider this - if you have a home to sell but you're afraid of being homeless because your house might sell so fast, we GUARANTEE the purchase of your new home, in your time frame, or I pay you $5000. That's right, no gimmicks.  If you're interested in the details, just give us a call.