THE REAL ESTATE MARKET MAY HAVE SLOWED NATIONALLY, BUT NOT IN SOUTH FLORIDA

Sunday, June 4, 2023   /   by Burt Horwitz

THE REAL ESTATE MARKET MAY HAVE SLOWED NATIONALLY, BUT NOT IN SOUTH FLORIDA

The home sales market has slowed nationally, but not in South Florida. It’s reported that 2 out of 3 homeowners (65.3%) are “equity rich.”

 

Homeowners across South Florida are seeing equity gains in their homes, despite the national housing market slowing down. About 65.3% of residential properties with a mortgage in South Florida are considered “equity rich,” in the first quarter of this year.

To find how many properties were still building equity, researchers looked at mortgaged residential properties in the area with different levels of loan-to-value ratios. For a property to be “equity rich,” the combined estimated loan amount was no more than 50% of their estimated market value, meaning that the owner had at least 50% equity.

The data shows a steady uptick from the prior two quarters in the tri-county area: For the fourth quarter of 2022, about 64.5% of homes were equity rich, and in the third quarter of 2022, about 63% of homes were equity rich.

Interested in buying a home in South Florida?

Contact Burt Horwitz – Realtor - Keller Williams Realty

561-289-5939

 

South Florida’s continued rise in equity can be attributed to its population growth, as out-of-state buyers have flocked to the area, fleeing larger metropolitan areas with higher housing costs. South Florida population growth is keeping the real estate values up because people are buying the limited amount of inventory available. When people up north sell their house for a million and see what they can buy in South Florida for a million, they may think, “I’ll take it, since it’s more house than what I am used to.”

On a national level, there were small decreases in the amount of homes that could be considered “equity-rich,” the report noted. In the first quarter of 2023, about 47.2% of homes with a mortgage were equity-rich, a slight decrease from the previous quarter when about 48% were equity-rich.

“The equity downturn, small as it is, stood as the latest indicator of how a decline in home prices across much of the country has started to affect homeowners following a decade-long market boom. It comes as home-seller profits have slid to their lowest point in two years, according to some reports.

For South Florida, it’s unlikely that equity gains will decrease as the market is still projected to see increases over the next year.

South Florida may see a 3-5% bump in property values in the next year, so that will affect equity. Maybe not the double digits over the past few years, but price increases may be more stabilized. The southeast US is projected to be one of the hottest places in terms of population growth, and people need a place to live. Out of state buyers are going to continue to buy real estate and that will keep the real estate market growing.


South Fla Home.jpg

Keller Williams Realty
Burton Horwitz - Realtor
7280 W Palmetto Park Rd
Boca Raton, FL 33433
561-289-5939
Homes Sales South Florida

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