Thom and Rory talk about the current market stats informing you of all things real estate related covering the areas from Martin County south to North Palm Beach County.
The Maltz Jupiter Theatre is currently undergoing a massive expansion and remodel. The new season is getting booked quickly. You can find the upcoming schedule on Maltz Jupiter Theatre .
Thom and Rory share stats, articles, and graphs that may make you change your mind.
Are you waiting to buy a home until prices drop? Not sure of your next move? Are you concerned about buying in a hot market or is now even a good time to buy? As 2021 progresses, questions about what’s coming are top of mind for buyers and sellers. Near record-low mortgage rates along with rising home prices started off 2021 with a robust housing market in the first half of the year, but what does the forecast tell us about what’s coming for the 2nd half of 2021 and forward?
Many experts are projecting a rise in interest rates. Freddie Mac’s latest quarterly forecast is that mortgage rates will continue to rise through the end of next year estimate that the 30-year fixed mortgage rate will average 3.4% in the fourth quarter of 2021, rising to 3.8% in the fourth quarter of 2022.
However, even as mortgage rates rise, their anticipated increase is expected to be modest, and well below historical averages, thus allowing homebuyers to maximize their purchasing power. Home Price Appreciation Will continue but Price Growth Will Likely Slow.
Joe Seydl, Senior Markets Economist at J.P. Morgan, also projects home prices will continue to rise, so buyers interested in purchasing a home should do so sooner rather than later. Waiting to buy a home or waiting for rates or home prices to fall may not be in their best interest: Other experts remain optimistic about home prices, too. The graph below highlights 2021 home price forecasts from multiple industry leaders:
Home prices are rising, but they should moderate as more homes come to market. George Ratiu, Senior Economist at realtor.com, says there are signs that indicate the current inventory challenges may lessen, thus slowing the rapid home price appreciation and generating more choices for buyers. He also says there have been more new listings this year compared with 2020 in 11 of the last 13 weeks with an influx of new sellers over the last couple of months.
New construction home starts are also starting to improve, which further supports hopes of more options coming to market. Robert Dietz, Chief Economist at the National Association of Home Builders (NAHB) says there are now 652,000 single-family homes under construction. This is 28% higher than a year ago.
Finally, while it may not change the current housing market we’re experiencing, more homes might come to market this year thus improving the economy according to Mark Fleming, Chief Economist at First American, who also notes that growing consumer confidence, a stronger labor market, and higher wages have potential for housing demand. While a growing economy and improving conditions with the pandemic may also motivate existing owners who were on the sidelines, to list their homes for sale, yet not enough to tilt it from a super sellers’ market anytime soon.
Bottom Line: As we look at the forecast for prices, interest rates, inventory, and home sales, experts remain optimistic about what’s on the horizon for the second half of 2021. But again, if you are waiting to buy a home, it’s currently looking like it would be better to buy sooner than later. Let’s connect today to discuss how we can navigate the market together in the coming months.
The information contained, and the opinions expressed, in this article are not intended to be construed as
investment advice. The Thom and Rory Team does not guarantee or warrant the accuracy or completeness of the
information or opinions contained herein. Nothing herein should be construed as investment advice. You should
always conduct your own research and due diligence and obtain professional advice before making any investment
As you will see in the video covering the South Florida real estate market, the closed sales for single-family homes for May 2020 to May 2021 have jumped up 96.5% and the closed sales for the first 5 months of 2020 compared to the first 5 months of 2021 went up 33%.
The median sales prices for the South Florida real estate market also went up 13.7% from May of 2020 to May of 2021 and the median sales prices for the first 5 months of 20 versus 2021 went up 27.5%.
The inventory for the South Florida real estate market for sale in May of 2020 versus May of 2021 has gone down a massive 65.2% bringing the month's supply of inventory to a historic 1.1 months. That means less than 1 month supply of inventory. So if no other homes come on the market, what's left in Jupiter would be sold out in 1.1 months!
However, looking at the national trends, we are seeing inventory pick up from the beginning of the year at 1.9 months in January 2021 to 2.4 months in April.
The inventory for North Palm Beach County in January was 1,734 homes. In May it's dropped to 1128 homes. Condos and townhomes in January were 2,325 and are now 1,170 for May.
New listings coming on the market in January were 856 and may is 903 so there's a little bit of a positive trend there. Townhomes and condos in January were 979 is down to 848. This decrease is likely due to people that cannot afford to buy single-family homes are turning to condos and townhomes.
Of course, this is great news for sellers. It's not all bad news for buyers though. If you are thinking of buying a home, we have a lot of strategies that we use to put buyers in a strong negotiating position when making offers on homes.
Most economists predict that home prices will continue to rise but not at a dramatic pace. They predict an average of 8.2% price appreciation for the remainder of 2021. So, again, if you're thinking of making a move, it's still best to do it sooner than later before interest rates AND prices go up this year and next. As we've discussed before, there's no evidence there will be any kind of "Bubble" bursting and causing prices to drop.
For the full story and more information please see the video.
We put this video together after having several conversations this week and several more last week with people that would love to sell their home but they don't know where they're going to go. They know they could sell quickly and they're afraid if they do put their home on the market they won't have a place to go.
Some say that they're waiting for the bubble to burst and home prices to come down. Most economists agree that this situation is NOT like it was in 2008 when people were getting adjustable-rate mortgages and then when the mortgages would adjust they couldn't afford the payments so that's when the banks took them back in foreclosure.
So again nothing like that now is happening. In fact, we now have tight lending standards with historically low fixed-rate mortgages (not adjustable) and there's a lot of cash purchases. Banks don't foreclose on cash purchases nor do they foreclose on homes with lots of equity. Yes there are some homes in forbearance that will come out of forbearance without solutions and banks will take them back and they will be sold on the open market. But that's a small percentage and they will get quickly absorbed by the demand for homes. Banks would rather work it out with those homeowners than foreclose. It costs them so much money and time to foreclose.
Some people are saying that Florida is the Last frontier like California was back in the 1980s. They are saying you can spend over $1 million for a one-bedroom home in many places in California. There's only so much land in Florida and moving inland is not an option for a lot of people who want to be near the beach. They want the ocean breezes that you don’t get inland and they want the Florida beach lifestyle. As you go west and south are you going to the Everglades where you can’t build.
There's a lot of people moving here that can work from home now and into the future. They want OUT of the winter weather and into the sun. They want no state income tax. They want lower real estate taxes.
So for the foreseeable future, it looks like prices are going to continue to rise. If you're thinking that it's better to make a move now while prices are where they are then we're here to help. Check out our First Buy, Sell Later Solution in the video below. Reach out to us with any questions you may have and if you want more information, as always, We're here to help! Thanks.