Status of the Housing Market Going into 2023

Nov 14, 20222020 Census, 2021, 2022, banks, Cpaitalism, economy, employees, hurricanes, society, US Census Bureau

When did this housing market become untenable? I live in Florida and about a year ago I was in the market to purchase a home. I began looking in the greater Naples are because I was living there. I made some offers and they were outbid. I got a job in St. Augustine and began looking there site unseen and made an offer that was accepted only to have the broker for the seller disclose that the appraisal came in $10k more than the selling price. My agent was the one to blame for that and he accepted no responsibility for that deal falling through. I began to look at other properties and each time I got outbid! It was and is frustrating to know that the great American dream about home ownership is out of reach for what was the middle class of Americans and is now the lower class as we become quickly a two class society.

Money, money, money!

Between Covid and frantic people fleeing the Northern tier states to come South the housing market is at an all time high, even higher than the crash of 2006-2008. There appears to be no end in sight regardless of how high the fed moves the interest rates. Has their rising rates slowed the market, perhaps a bit. But it is still out of reach for ordinary folks like me, sadly!

I was a licensed Florida Realtor for over 20 years and sadly let my license lapse when the market feel to historic lows in 2006 through 2008. When some were losing their homes to foreclosure the people who had money and could afford to invest swooped in and purchased these distressed properties for a fraction of what they had originally cost. This is a dramatic change from todays sales climate.

I surfed just for fun to see what was available in hurricane battered Fort Myers, Florida only to find that mobile homes that were severely damaged were going for in excess of $400k! That is outlandish and should be illegal, but we are a capitalistic society. According to the website  the Florida statewide median sales prices for a single-family home was, in August 2022, $407k which was 15% higher than in 2021 with several locales experiencing even higher price hikes. Over the past five years we have seen property values increase by more than 80%. Am I the only one who finds this insane?

Hurricane Ian hit in the end of October and the prices still continue to climb despite there being multiple and widespread ruination of properties in the greater Fort Myers Florida area. I had hoped that the people from the great white north might be scared into going back home after this dire situation, but it seems to have fueled the rising prices of the housing market even more. Miami and Tampa are leading the price increases as of now.

Where will this madness end?

What is driving this shift in prices? According to some it is corporate investors purchasing large tracts of homes and condominiums to rent. This has escalated rental prices too. For instance a yea ago I could have rented my three bedroom, two bath home with a one and a half car garage for about $1,500 per month. I am now paying $2,150 per month plus plus plus. Who can afford to rent or own anymore.  Wages for jobs have slumped as home prices have risen and that is why we are fast becoming a two class society. The average personal income across the USA is about $63,214  and the median income is even less, around $44,225. This was only a 2.9 percent rise from 2019 according to the US Census Bureau. Nobody with that income can afford a home in today’s marketplace, at least not in Florida.

In the past couple of years Florida has seen an appreciation rate in home values of more than 33.64% while the US in general is at about 24.7%. Tampa Bay area is supposedly one of the most overpriced markets in the Nation according to research from the University of Florida. North Port and the Sarasota area are ranked number 17 nationally and number four in the state. Prices are up 48.9% yea over year. Homes are only on the market a mere fraction of a month or  16 or less days on average with closings taking place in 57 days or less. I am floored.

According to Redfin the number of homes sold 2022 over the same time period in 2021 is slightly down and that is attributed to the nose-bleed interest rate rises that the Fed feels compelled to inflict which will surely drive us into recession. The top metro areas for the fastest increase in home prices is as follows: Margate, Plantation, Green Acres, Jupiter, and Boynton Beach. The number of cash buyers is up over 17% and made up about 30% of all real estate sales this past year.  Jeez I wish I had some cash to buy a home with, but between the increases in rental prices and my cost of utilities and other things affiliated with living it is impossible to save any money.

Is there any end in sight? I think not. Anyway, best of luck to all of the now lower class people with far enough jobs ever being able to realize home ownership.


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