As we wake up to 2018, this is how the horizon looks in a gloomy early January in Central Florida but with a sunshine perspective.
The housing market ended 2017 with a continued positive track “with more closed sales, more new listings, more pending sales and rising median prices.”, according to data from Florida Realtors Research Department in partnership with local Realtor boards/associations. A year of motivated buyers and sellers, tight inventory and fast paced market especially for existing condo-townhouse properties. Still an affordable state, median sales price for single-family existing homes, up to November, was $240,000, up 9.1% from the previous year, and $176,000, up 8.6% for condo-townhouse properties.”
The steady trend leads to expect a similar market pattern for 2018. Central Florida will continue to be an “affordable” area in comparison with other locations in the Nation. However, this relative affordability concept will change for the local market due to limited wage growth relative to real estate prices, higher interest rates and market patterns.
In fact, low inventory will continue to stress the market in some segments and prices will continue to go up. “Builders aren’t building new housing to meet the needs of first-time homebuyers or those on fixed incomes, which includes many empty nesters due to rising land acquisition costs” and “it is growing more challenging, even in smaller to mid-size cities, to find an affordable property to purchase that doesn’t need significant work (like dwindling foreclosure inventory with multiple offers)”, said Cara Ameer contributor to Inman News. Redeveloping is coming back in the market, “outdated living structures” are being transformed in new and modern dwellings but the trend isn´t enough to supply the deficit.
On the demand side, Central Florida will potentially experience an increase due to higher migration to the area “from states with a high cost of living, burdensome income tax rates and harsh weather” pushing prices higher and tighten supply much more. However, 2017 scared many of us living in Central Florida after the hurricane season. We faced some forced evacuations, flooded areas, no power and even some devastation. Lots of FEMA (Federal Emergency Management Agency) disaster relief and insurance claims. Many people may still be questioning their decision to live in this area and some others may be doubting their interested in relocating here, especially closer to the water. The areas that flooded are going to be a tough to sell, the rates of insurance might become a burden after recurrent incidents, and the cost to rebuild won´t be able to be absorb but the market in the short term.
We don´t know yet the full effect of the on-going tax reform but it may impact the decision of where people want to live and invest in real estate. Up to now, Central Florida has proven that, having the financial conditions, it´s better to own that to rent and we hope this to continue especially “in the lower-priced homes to take advantage of the lower mortgage interest and property tax deduction limits.” Emphasized Cara Ammer.
Ready to sell your house? In the resale market, you will be competing with new (or almost new) construction in one end, and renovated (flipped over maybe) houses in the other. So, make sure your house shows well and has been kept up properly if asking “top dollar” and don´t get discouraged if you need to adjust price within the first month of listing. For high-end homes, it would take longer to sell.
Location, location, location! You have seen this quite too many times. But yes, it is and will continue to be true. The real estate market is made of “mini-markets”. Neighborhoods and even streets imply totally different market activity and price ranges. Buying or selling must be a well-documented decision based on clear expectations in terms of location, description, amenities and expenses.
My final and honest note. Market is changing in a fast pace and technology is a great resource but it won´t replace the professionalism from a local Realtor to guide the complex process of a real estate transaction. We strive to serve you and your needs the best possible and we don´t care going the “extra mile” to gain your trust and business.
Happy real estate 2018!
Patricia Camacho, Realtor in North Orlando area.