The present housing market slowed as it approached the second half of 2018. This is partly due to rising interest rates by the Federal Reserve. Experts are also not keen on any record-breaking changes in home prices for 2019. With this information, will it be better for Florida property buyers to buy a new property, sell existing ones, or hold on until the market stabilizes?
Florida as an Emerging Real Estate Market
Investors considering buying a property should look at Clearwater, Tampa, and St. Petersburg as they are among the emerging real estate markets for 2019. These areas have home values growing 50% faster than any other cities whilst keeping home prices affordable for residents. They also have an average cost of living, comparable with the national average. US News included Tampa in their list of 25 Places People Are Moving To. This means an influx of people looking for homes to buy or rent. The city is also relatively young, with a median age of 36.2 years old.
Millennials are looking into buying more homes in the city. Millennials are creating a new wave of first-time home buyers. In a survey of 2,000 adults in the US, over one-fifth of Americans with ages between 18 and 34, plans to buy a home with the next 12 months. The National Association of Realtors also revealed that as much as 36% of homebuyers are millennials.
Individuals still living in their homes for about two years may wait for another five years before thinking of selling it. However, those who are already thinking of selling should do so this year or early next year. Many property analysts believe that homeowners should seriously consider selling in 2019 whilst new buyers are still entering the market and interest rates are not yet as high. This is particularly applicable for homes with high equity since the higher home equity means the seller can get more profit from the sale. They can use this profit to fund their next home purchase should the market remain hot again.
In a survey by Zillow, many respondents believe that a recession is likely to occur in 2020 so selling the house this year would be the best decision. More so, since there are no expected spikes in property prices that sellers can benefit from.
To Buy or To Rent a Florida Property
Experts believe that the current status of the real estate market is ideal for renters. Rapidly rising home prices along with increasing mortgage rates are shifting the interest toward renting more than homeownership. According to Realtor.com, the monthly costs associated with buying and owning a property is more than 14% in the past year alone, more than thrice the yearly increase in rental rates. For rental properties, the value increased by only 4% during the same period. Add to it the fact that the number of local housing markets with more affordable rents is increasing in number.
Rentals are growing 20% faster, just appropriate for landlords and property managers to earn a profit and not enough to push away potential renters. Experts believe that renting and reinvesting the savings from the cheaper rentals will eventually create more wealth for astute buyers.
Whilst the Florida property market is doing well, pricing properties correctly is crucial in making a good sale. Similarly, holding on to properties with more expenses should be avoided at all cost.