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Old Today, 12:31 PM
 
54 posts, read 119,127 times
Reputation: 22

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Is anyone else concerned with the home market in the area for buyers? My husband would like to move back to the area as this is where he grew up and has family. We have a 1-1.5 years before we could make a move and really like some of the new home communities going up in the area but the prices seem out of control and are increasing so fast. I know that it is a sellers market down there but is there ever a top cap for these homes. They seem astronomically high per square foot and appear to be continuing to rise at a crazy pace. Even the existing home prices seem seems so high. Is there an end to the bubble anywhere in sight? Thanks for any insight!
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Old Today, 01:10 PM
 
Location: Venice, FL
11,812 posts, read 3,576,760 times
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The following is only my opinion, I'm not a financial analyst...

I see no end in sight to the sellers market, at this time, unless we have a natural disaster, or global crisis.

Its not a bubble, if the prices don't collapse, & I don't see a collapse occurring. Why?

There are multiple drivers of the price escalation:

-covid restrictions in big cities up North - this will diminish over time, but not rapidly

-low interest rates...they've bounced up a bit lately, but still near all time lows. I dont see this changing rapidly either.

-work-from-home is a new cultural shift that is long-lasting, & benefits FLA. Florida is the #1 state Americans want to move to, and now they can.

-the baby boomer generation are still reaching retirement age, so demographics will still drive sales for a few more years.

-cost of living, and high taxes up North will not change overnight, & will keep pushing people away to lower cost/tax places.

-we also seem to have people in SE FLA moving to SW FLA to escape high population density, higher taxes, and higher cost of living.

With all of these forces at work, I cannot see a sudden collapse, and thus, I don't feel we have a bubble. Eventually prices will level off, and perhaps decline some, but it would take a major event to force a collapse.

Our price per square foot for single family homes in Southern Sarasota County is still much lower than the places most transplants are coming from. Most homes in my area are at $250/sq. ft..

Last edited by beach43ofus; Today at 02:35 PM..
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Old Today, 03:09 PM
 
3,592 posts, read 8,487,879 times
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I agree with beach43ofus - if you talk to old-timers and natives they have seen bubbles come and bubbles burst through the years but the world is very different now and all the telecommuting that is going to become permanent is going to have people flocking to Florida - I am not happy about it - getting too crowded now.
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Old Today, 04:01 PM
 
54 posts, read 119,127 times
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Thank you for such a thoughtful reply. I find it very helpful.
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Old Today, 04:34 PM
 
20 posts, read 9,527 times
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Currently there are just under 1000 homes on the market in Sarasota county, which is just over a month’s supply. At the peak of the real estate market in 2005, there were 10,000 homes on the market or a 20-30 month supply, depending on sales volume. Realtors say a balanced market between buyers and sellers is a 5-6 month supply. So we are a long way from that. Upward pressure on prices will continue.
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Old Today, 04:52 PM
 
Location: Sarasota/ Bradenton - University Pkwy area
3,720 posts, read 5,409,952 times
Reputation: 3859
Quote:
Originally Posted by beach43ofus View Post
The following is only my opinion, I'm not a financial analyst...

I see no end in sight to the sellers market, at this time, unless we have a natural disaster, or global crisis.

Its not a bubble, if the prices don't collapse, & I don't see a collapse occurring. Why?

There are multiple drivers of the price escalation:

-covid restrictions in big cities up North - this will diminish over time, but not rapidly

-low interest rates...they've bounced up a bit lately, but still near all time lows. I dont see this changing rapidly either.

-work-from-home is a new cultural shift that is long-lasting, & benefits FLA. Florida is the #1 state Americans want to move to, and now they can.

-the baby boomer generation are still reaching retirement age, so demographics will still drive sales for a few more years.

-cost of living, and high taxes up North will not change overnight, & will keep pushing people away to lower cost/tax places.

-we also seem to have people in SE FLA moving to SW FLA to escape high population density, higher taxes, and higher cost of living.

With all of these forces at work, I cannot see a sudden collapse, and thus, I don't feel we have a bubble. Eventually prices will level off, and perhaps decline some, but it would take a major event to force a collapse.

Our price per square foot for single family homes in Southern Sarasota County is still much lower than the places most transplants are coming from. Most homes in my area are at $250/sq. ft..

Great post, could not have said it better myself.

This "bubble" in real estate prices is very different, in my opinion, than the one back in the mid 2000's in that a lot of that bubble here in FL back then was fed by insane, no money down loans (even to investors), no document loans & subprime lender loans at ridiculous interest rates. They created the "Ninja" mortgages -- no income, no job, no assets -- at very high interest rates, which added even more fuel to the fire. The number of loans increased substantially between 2003 and 2006. And it wasn't just new loans. Home owners also got into the loan crap shoot by pulling money from their residences via equity home loans. Eventually in 2008 the feeding frenzy hit a peak and lending dried up, the real estate market collapsed, and foreclosures became the norm for several years.

Most buyers today are doing conventional financing or paying cash rather than dubious 100% financing loans. Tighter lending standards compared to the 2000's will help minimize the risk of a real estate market crash as in 2008. The loans that have been made over the past decade are more solid, from borrowers with higher credit scores/ savings and lower debt.

The number of people looking to relocate to Florida also continues to grow. Between now and April 1, 2024, the population of Florida is expected to grow by an average of 906 new residents per day, according to a news release from WFLA Channel 8 in Tampa. Florida’s population is expected to grow by more than 700,000 residents the next 2 years alone. More people require more housing.

One of the reasons for the growth can be contributed to Florida's business friendly governments, at the local and state levels. Businesses are finding they no longer have to be tied to metro areas like New York, and are therefore taking advantage of what FL has to offer.

I will leave the market predictions to the "experts." Most of those are not predicting a housing market crash in FL anytime soon, especially not in the next 5 years. Some are predicting demand will start to level off as prices increase, mortgage rates start to rise. Others disagree, saying the demand and lack of supply will continue to fuel the price increases for at least the next few years. Time will tell which experts got it right...........
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