How is it that the market has not crashed yet? Well, I will provide some insights into this question. There are many things that have prevented the market from fully crashing and in many ways highly inflated the prices of homes.
1 – Corporate Cash Buyers. There are several large corporations that have swooped in throughout the country and have started buying up all the single-family homes. They usually outbid all the other local buyers and in essence, have priced many locals out of buying a home. These corporations then turn around and rent the property or place it back on the market for even more money. One of these companies that did this during the 2022 craze was Zillow’s iBuyer program, they were buying homes sight unseen and then placing them back on the market at a higher price. This hurt the real estate market tremendously and overinflated the value of homes.
2 – Low Inventory. The inventory of homes on the market has remained low. Many sellers are waiting to see what will unfold with the market and waiting for those interest rates to go back down a bit. They purchased at a low interest rate and are finding it hard to give that up. People will always need to sell for one reason or another but many sellers are waiting.
3 – Local Investors. Local investors are also ready to buy properties for cash. They primarily purchase distressed properties and homes that are in need of repairs. Many of these homes never go on the market and are purchased off-market by investors.
4 – Influx of People. There is a huge influx of people coming into Florida. Many people are migrating from other countries and moving to South Florida. The culture here attracts people from all over the world making our area appealing to Spanish speakers. Another group of people is baby boomers. Baby boomers are now retiring to be close to the warm weather you are seeing this population of people moving to Florida. All this influx of people has created a housing shortage, especially within the rental market but they are also purchasing homes creating an even tighter demand for the already low inventory.
Because of all the demand the South Florida real estate market has been able to hang on. Remember that every local market is different and what happens in one market may not be the case in another.
Staying informed of what’s happening locally instead of watching the national news is your bet when it comes to real estate in your area.