It’s November, we have “turn[ed] back time” (no I won’t sing it), and it is another high season in South Florida. And that means increased real estate activity.
What market conditions will apply this winter?
It is difficult to make statements about pricing in the overall real estate market that apply universally at the neighborhood level. I have compiled proof of that in my Broward’s Real Estate Yearbook (online at issuu.com/jamesoaksun/docs/2015_yearbook).
All real estate is hyper-local! Forget cities – even within some neighborhoods, price trends for homes with different characteristics will vary.
In the 35 neighborhoods and segments analyzed in my Yearbook, median price changes in the 12 months ending June 30, 2015, ranged from +48% to -49%!
There are, however, two macro trends applicable everywhere this season, and an economic truism that will govern the market in certain neighborhoods in South Florida.
Practically every expert says interest rates will rise in coming months. Holding other things constant, this will depress housing values. Monthly mortgage payments will increase, and the maximum price a person can spend on a home will go down.
However, next year is a presidential election year. And looking back in history (with few exceptions), incumbent politicians strive to get the economy humming along in election years, particularly in presidential years. That pulls real estate prices up.
Here in Broward, there are some (but definitely not all) neighborhoods where housing inventory is very low. Further, because prices generally have flattened, sellers have been less eager to list. But I think an opportunity exists for shrewd sellers in the next 30-60 days: Take advantage of low inventory in select neighborhoods and price points and list as soon as possible. When supply is low, and demand starts to increase (as it does every high season), first on the market will get better results. Then, prices increase, more properties get listed, and prices flatten or turn down in some places. That happened in center Wilton Manors last season – the first half was strong and the second half weaker.
It is impossible to say without very specialized knowledge how certain neighborhoods could perform compared with the overall market. Whether you are buying, selling or investing, only an absolute local market expert can do that. Choose carefully.by