Most Googled Questions about Real Estate

In today’s world we use Google to look up everything. Any question that comes to mind, we rely on Google for the answer. With that in mind, we went ahead to see are what the most Googled questions about Real Estate and our broker, Eddie Blanco, answered the top 5 questions with his many years of real estate experience servicing South Florida.

Question 1: Is the housing market going to crash?

The answer is no, not for the foreseeable future. There are a lot of challenges that we’re facing in our economy such as high interest rates and increased inflation. But the main factors that are driving home prices today are strong and likely to continue.

For example, unemployment and wages are still at very high levels. In fact, unemployment and wages are above pre-pandemic levels. So, people are earning more money and have more job stability, which will result in people being able to continue to make their home payments and stay in their homes. Another reason why housing inventory is low and will remain low is because we simply haven’t built enough homes since our last market correction in 2008 and housing is still at pre-pandemic levels. Home equity is another reason to consider. Currently there is more home equity, meaning that people owe much less than their home is worth. Even if there is somewhat of a downturn in the market. The question of what is owed and what it’s worth continues to keep the market stable.

Question 2: When will the housing market crash?

No one really knows when the market will crash and we can’t see the housing market crashing any time soon in South Florida but, here are some signs to look for that might indicate that the real estate market is getting unstable, and housing may be affected.

Unemployment – if unemployment rapidly and consistently increases, this could lead to rent and mortgage default, which can result in an increase in supply of homes.

Inventory. Keep an eye on inventory. How many homes are currently on the market and how many homes are selling? If the pace of listings is faster than the pace of sales, this will lead to a lot of homes being on the market and if there’s a lot of homes on the market and they’re outpacing the demand for the homes that generally will result in prices of homes declining again.

Neither of these things are being seen at this moment because currently we’re seeing inventory very low. We’re seeing equity high and we’re seeing demand for housing high.

Mortgage Default. Another thing to keep an eye out for is mortgage defaults.

How are the pace of defaults in mortgages going? Currently, mortgage defaults are stable, have slightly increased but certainly nowhere near what we saw pre- pandemic.

Question 3: Why is the housing market so high right now?

Well, there’s a lot of factors at play here. And in South Florida, we are seeing the perfect storm for house price increases.

Millennials are now becoming into the ripe age of home ownership age and many of them are starting house formations and as they start to buy, they are a large cohort of people making a lot of the demand for housing, buying up a lot of that supply.

And the other part of why housing prices are so high is that supply is low, and supply and construction has been down. Since 2008, from the last time the market crashed, the speed of building has been so slow, resulting in a low amount of inventory and creating a disbalance between supply and demand.

In South Florida, or rather most of Florida, we have seen an incredible amount of people moving into South Florida from cities such as Chicago, San Francisco and New York, all of which have higher price points and higher income earners. They are coming here, buying property and many of them paying cash for the properties driving up the property values.

Question 4: Is the housing market slowing down?

And the answer is yes, it has already slowed down. Price growth has decreased since 2020 when it was at its all-time high. Don’t confuse price growth with the pace of price growth. What this means is the speed at which property values are going up has slowed down but, property values are still going up. In 2023, during the first quarter, we’ve seen an increase anywhere from 2-8% in a quarter in some markets. So, be mindful that although inventory is low and buyer demand remains high, price growth is not as strong in most states but still going strong in South Florida. In addition, don’t confuse national news with local data. What’s happening at a national level is very different than what’s happening at a local level due to many different factors.

Question 5: When will we see the housing market get better?

That depends on what side of the coin you’re on. If your question is asking, when will we see home pricing get more stable and more affordable for more people? Unknown. But there is some hope for the future because recently the state of Florida passed a new law called Senate Bill 12, and part of that will involve an unprecedented amount of money for infrastructure to build affordable housing and changes to local zoning laws which makes it easier to build more affordable housing. We should expect to see an increase in supply of affordable housing helping to stabilize prices and allow people, specifically working-class people, to purchase real estate in South Florida.

In summary, with all of these questions, most people are just trying to get to the bottom line which is: Is now a good time to sell or buy real estate? The answer for each individual is, it depends on many factors. But it seems a lot of people make the mistake of waiting and trying to time the market – and timing the market is an impossible thing. It’s even impossible to time for a real estate broker! Trying to time the market is something we do not recommend. Most people think that buying low and selling high is the approach of all real estate investors when in fact, it is not. The real goal is long term real estate appreciation. When purchasing property, what you should look into is – can you afford the monthly payment and can you afford that monthly payment for a long time? If you wait out for a down cycle, remember, the market will come right back up. Timing the market with the “wait” strategy is not the way to go. Don’t wait to buy real estate, but rather, buy real estate and wait.

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