FLORIDA NEWS AND REAL ESTATE 

 FLORIDA NEWS AND REAL ESTATE –

Like every month, we meet to discuss the US economy and also the latest real estate news in Florida. We cover the entire US real estate market for you. In this issue, we address the hot topics of the moment. We'll particularly discuss the US economy. A danger currently looms over American households: inflation.

 

We'll also see how Americans are reacting to this. We'll also take a closer look at the US real estate market. We conclude our analysis with a market we know well: Florida and South Florida.

 

Florida real estate news

 

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Economic news in the USA

Concerns about an economic slowdown at the end of the year

Americans' economic anxiety reached a peak this month, but it remains low by historical standards. Twenty-six percent of Americans said in a new poll that a concern related to the economy was the main problem facing the country. Concerns about the federal budget deficit, the gap between rich and poor, wage problems, fuel/oil prices, and lack of money each received one percent in the survey.

 

In contrast, 74% of respondents cited a non-economic issue as the top problem facing the United States.

 

Republicans and independents were more likely to cite an economic issue as their top concern, according to Gallup. Thirty percent of Republicans and 29 percent of independents cited an economic issue when asked about the most pressing problem facing the United States, compared to just 18 percent of Democrats.

 

Respondents cite inflation as the main problem, which has only increased during the pandemic. The Labor Department released new statistics earlier this month showing that inflation is at its highest level in 30 years.

 

President Biden has announced investments in projects such as roads, bridges, broadband, water, and rail. Congressional Democrats are now seeking to send their social spending and climate package to Biden's desk, which includes funding for health care and education, among other initiatives. The bill, which totals approximately $2 trillion, has Republicans worried that inflation could skyrocket if it is signed into law. Democrats, however, argue that the bill will serve as a solution to the country's rising inflation.

 

American hyperinflation is here to stay

After being virtually forgotten for years, inflation is once again attacking American wallets. In fact, it has become a major concern for the White House. In recent months, the Biden administration has stepped up efforts to address the supply chain disruptions that economists blame for high inflation. And President Joe Biden has pushed his economic agenda as a remedy to inflation worries.

 

But ask investors, economists, and the American people what they think about inflation, and no one sees it slowing down anytime soon. That means everyone, from the president to the average voter, will likely need patience to get through this. Rising food and gasoline prices are weighing on Americans living on fixed or modest incomes. Retail grocery prices rose 1% in October, and laundry and dry cleaning costs were up 6.9% from a year ago. In some parts of California, gasoline is selling for more than $6 a gallon. General Mills has informed retailers that it plans to soon raise prices on dozens of its brands, including Cheerios, Wheaties, and Annie's.

 

To help reduce fuel costs during the holiday season, Biden announced that the United States and some of its allies would tap their National Strategic Petroleum Reserves. While the Biden administration has said it will release 50 million barrels of oil from government stockpiles onto global markets in the coming weeks, some analysts have warned that the action will likely amount to an attempt to appease consumers at best. Tapping the country's oil reserves will have a limited impact on fuel costs since "nearly 40% of the millions of barrels of oil were already scheduled for 2022."

 

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Real estate market trends for 2022

The third quarter of 2021 likely marked the peak of the housing market's price boom. Experts, however, forecast a year-over-year decline in residential inflation to 16.6% in the fourth quarter, down from a peak of 18.6% in the quarter ended September 30. Double-digit home price inflation is expected to last until mid-2022.

 

It won't be until 2023 that domestic inflation will return to the 5% pace seen before the pandemic. However, these remain projections. Home inventories have plunged to record lows as sales soared. Those still looking to buy have been forced into frantic bidding wars over the few homes still available. Monthly price growth has slowed slightly, but the year-on-year pace is still at its highest level in more than four decades.

 

Labor shortages and a supply crisis are preventing construction from rebounding, economists said. The cost of key materials has skyrocketed. A prime example is lumber, which has been more expensive for much of the year. A shortage of available workers has also slowed construction starts, as companies have struggled to rehire.

 

The average 30-year mortgage rate will climb only slightly to 3.5% by the end of 2023. This compares to an average rate of 3.7% before the pandemic and neared 5% at the end of 2018.

 

It is certain that the pandemic has permanently raised the floor for home prices in the United States. The median price of a new home is estimated to end 2023 at a record high of $464,000, about $100,000 higher than it was at the beginning of 2021.

 

Strong home sales have helped push home prices to record highs. The S&P-Case-Shiller U.S. Home Price Index rose from $136,600 in 2012 to $217,000 in 2020 and $267,000 in 2021. The median price of new home sales was $408,800 last September, up from $344,400 a year earlier.

 

Several factors explain this underlying trend over many months:

 

Topping the list are low mortgage rates, which keep mortgage payments low and affordable for a wide range of buyers. According to the Mortgage Bankers Association of America, 30-year fixed mortgage rates in the United States have hovered around 3.2% over the past 12 months.

Then there are generous government benefits, which helped household incomes rise during the pandemic recession.

Meanwhile, inflation, the rising cost of living, makes monetary assets less attractive. This pushes people even more towards real assets like real estate.

While it's difficult to predict when the housing market will cool down, it's not difficult to predict how it will happen: Rising interest rates will reduce liquidity for the economy, including the housing market. This will lower market demand as the stock of goods rebuilds.

 

A French-speaking expert will advise you. Book a free, no-obligation consultation.

The Florida Real Estate Market: Our On-the-Job Analysis

South Florida market still booming

South Florida homes continue to climb in value, suggesting the housing market may not slow down anytime soon. A housing index released this week by researchers at Florida Atlantic University and Florida International University paints a picture. It shows that homes in the region were 16 percent higher than their long-term price trends in September, up from 14.29 percent in August.

 

What's also striking is the dynamism of the luxury real estate market. As proof, a waterfront "mega-house" in Highland Beach has sold twice this year. Each time, it has raised the bar for this South Florida city, which has become one of the hottest real estate markets in the state. The house located at 3715 South Ocean Boulevard is the most expensive home ever sold in Highland Beach. Built of concrete and glass, the house has seven bedrooms and nine bathrooms...

 

According to Multiple Listing Service records, the home first sold in March for a record $21.57 million. Adzem represented the buyers in that transaction, a couple who decided to sell the residence shortly after purchasing it.

 

Another major point to note: the end of the travel ban.

 

And this should only confirm this upward trend, as international buyers are increasingly numerous. The ability to travel to the United States is once again encouraging foreign capital. The results are already evident, particularly with the resumption of historical exchanges with Canadian buyers. These buyers appreciate Florida and are investors well-known to local real estate agents.

 

Concerns about an economic slowdown at the end of the year

The situation only confirms the overall trend in Florida. The market remains high, largely favoring sellers. It is now very common for offers at the asking price (or even higher) to be made in cash. As we have been explaining for several months, the state of Florida is also experiencing an immigration of Americans from other states. This is another factor driving the market.

 

Finally, let's add international tourism, which is gradually picking up. It's easy to see why transactions aren't likely to slow down in the coming months.