Florida's Real Estate Opportunities: Rising Rates and Market Trends
Oct 11, 2023
With mortgage rates hitting 20-year highs, home prices must be falling, right?
You'd be surprised - they're actually going up in many areas.
This week, we dive into the change in home prices vs. a year ago and highlight counties to watch (both good and bad) across Florida.
Let's dive right in!
Superstars and Caution Flags
Comparing the median price this August to last August allows for an apples-to-apples look at home price growth.
Here, we've got every county in FL mapped out, and the change in median price is color-coded (green means it went up, and red means it went down).
Some counties can be tricky as there are only a handful of transactions which can cause big spikes up or down in prices.
In these smaller counties, a few houses selling can skew the numbers. ๐ฎ
On the map above, I called out the major counties with over 150 transactions in August that had significant price increases (๐คฉ) and decreases (โ ๏ธ).
There were far more positive counties than negative, and this gives us insight into where people & money are flowing within the state.
Rates Over Time
One major factor that impacts home prices is mortgage rates.
The lower payments at a lower rate allow buyers to stretch higher on price. ๐
We've watched as rates have continued their historic rise since the middle of 2022 and need some context to think about this properly.
Rates are making their way to the long-term average of 7.75%, which is called mean reversion.
Over time, things tend to revolve around the long-term average, and this applies to mortgage rates, too.
In fact, for 66% of the time, rates have been between 4.5% and 11%, which tells me we are now at more "normal" interest rates. ๐คฏ
Finding Opportunity
This week I highlighted the fact that home prices in Florida are holding up much stronger than most would have expected.
There are some target markets (๐คฉ) where major growth is taking place, and this is evidence of evolving buyer demand.
While most people will simply keep scrolling, the professional Realtors are going to explore how they can get involved in the action.
Have you thought about creating referral partnerships in these areas? What about adding a team member that serves these counties?
Most people are just one county away from major growth, so it's time to go capitalize on it.
As for rates, I pose the question: what if we look back and think 7.5% was an attractive rate? ๐ค
It certainly isn't compared to 3%, but if rates keep going and head towards 9-11%, we'll wish we took advantage of rates in the 7's.
Keep an eye out for a pull-back and rest from the increase in the short-term, but know that we'll likely revolve around 7.75% for longer than we expect.
Most of all, provide historical context to your clients so they have the full picture.
Now get out there and seize the day! ๐
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