As we ran right through 2018 and head into 2019, Florida residents want to know, "What will the real estate market look like for this year?"
NAR Chief Economist Lawrence Yen predicts that the real estate market will do more of the same in terms of growth, which means appreciation in the single digits for low to midrange homes and a flat line to the luxury market.
There are a lot of unique x factors that can sway the market in the downward direction. First is the threat of the recession fueled by a trade war with China and other countries. Second is the imminent rate increases in the next few quarters, which will spook certain borrowers who, mistakenly I may add, want to wait until rates go down into the "cheap money." This is misguided, as historically 5%-5.5% is still pretty low, especially thinking back when rates were in the 7s and 8s less than a quarter century ago. Third is the tax laws recently passed. The Tax Cuts and Jobs Act lowers the cap on mortgage interest deduction from 1 million to 750,000 and also places a state and local cap deduction of 10,000, which harms buyers and homeowners in the luxury markets. Pair these 3 factors with a highly volatile market, and folks are a little worried.
Seeing the market level off is to be expected, especially when our bull run of over a decade has run out of steam, so a doomsday scenario may be a little histrionic. Experts think a pullback or correction in the next few years is probably but a repeat of the 2008 crash is not. The protective factors against such a crash are the very low inventory as well as better underwriting and appraisal practices.
Regardless, the top tier agents and brokers in Florida are watching closely the micro and macro trends of the market as well as the trends in their area so they are better able to pivot and assist buyers, sellers and investors to achieve their real estate goals.
Want to learn more about the Florida market and where it may be heading? Contact Casa Ott Group.