Tuesday, December 28, 2021 / by Scott Meadows
As we begin 2022, we’re looking ahead to the new year and anxiously awaiting what will happen in terms of residential, investment and commercial real estate throughout Florida. Although the last couple of years would have certainly been hard for those of us in the industry to predict, we are continuing to learn more about the potential for future Florida real estate, home values and where the market is likely headed. Realtor Scott Meadows has 29 years of experience in Florida real estate, and he’s been closely monitoring what’s been going on with local real estate, especially with what’s happened over the past several years and recent announcements over the past few months and weeks.
Let’s start with some of what we’re seeing right now as a Florida real estate agent and broker associate. Florida is a favorite destination for travelers, vacationers, and out-of-state buyers of all types of real estate and that’s been especially true most recently. The nearly year-round perfect weather is just part of the charm of moving to sunny Florida. We also have some of the nation’s best white sand beaches and world renowned attractions. Families, professionals, retirees, snowbirds, investors, and entrepreneurs are all attracted to the diverse real estate offerings in Florida, and for good reason.
If you’re searching for a waterfront property, a beachfront property or even a property that’s within an easy drive of some of these locations, you’ll find it in Florida. There are also many farm, ranch and acreage properties available throughout the State. If you enjoy outdoor recreation and/or theme park adventures, especially out on the sand and the water, there’s just no comparison when it comes to Florida real estate. We have high-rise condos, mid-rise condos, low-rise condos and villas for those who don’t want to worry about taking care of the maintenance tied to a single-family home. We also have some perfect family-friendly neighborhoods, some cozy properties that make great second homes and some sprawling mansions with Gulf, riverfront, ocean and a variety of waterfront access and views.
When it comes to local real estate, Scott says, “I don’t see a market slowdown anytime soon in any part of Florida. That’s especially true in South Florida in places like Miami, Fort Lauderdale, Boca Raton and the Palm Beach areas. That’s also what I’m seeing in Southwest Florida in places like Tampa, Clearwater, Sarasota, Punta Gorda, Cape Coral, Fort Myers, Naples, Marco Island and surrounding areas. Central Florida is also booming in places like Orlando, Kissimmee, Winter Park and Davenport.”
Scott adds, “no matter where you go, there is construction and real estate activity everywhere! I’m not just talking about residential construction, either. I’m also seeing commercial, investment, farm, ranch and land being sold, renovated and developed. Since I began my career as a Realtor in 1992 in Palm Beach County, I've never seen such interest and enthusiasm in regard to Florida real estate.”
It’s not surprising, population in Florida is increasing daily. In just a 10 year span, U.S. Census estimates counted another 2.7 million people living in Florida. In only about a one-year span, that number increased by more than 200,000 people. People are moving to the state every day, with some of them coming from larger cities in northern states. While that’s always been a trend as people commonly leaving snowy weather behind in search of more moderate winter temperatures, it’s not just people looking for second homes or retirement homes.
With more people traveling again, and that includes international travelers, it means more opportunities for investors considering Florida real estate. Florida is, obviously, heavily dependent on tourism. That means the potential for more short-term renters looking for properties in Florida. That’s good news for those who own investment properties in Florida in 2022, especially in certain cities and regions that are popular with tourists.
Scott also points out interest from other states, and countries. “Currently, the borders are open to Canada and the UK with buyers flocking in now with additional enthusiasm and a strong desire to purchase real estate, they weren’t here until recently. Most of the recent purchasing of real estate in Florida over the past two years have been driven by domestic purchasers. This is contributing to supply and demand issues which will significantly increase in January through April when the snowbirds arrive to Florida for the winter from the Northeast (New York, New Jersey, Pennsylvania, Massachusetts) and from the Midwest (Wisconsin, Minnesota, Illinois, Indiana and Ohio). We are also seeing buyers from the far western parts of the U.S that before didn't see Florida as a target destination for retirement. People are coming to Florida from states like California, Colorado, Washington and Oregon,” Scott says.
It's going to be interesting as we enter 2022, because demand is still higher than current inventory. That’s not necessarily a new problem. However, we are seeing a lot of construction going on right now, and that’s especially true when it comes to new housing options. Until recently, potential buyers could count on record low interest rates. When rates are low, buyers are more willing to finance a new home, or refinance an existing one. Already, though, we know 2022 is going to be different from 2021. Remember, just a couple of weeks ago the Fed announced it was going to speed up an end to its bond buying program.That’s important to note, because it means interest rates will probably be going up in the near future, not just one time, but potentially three times over 2022. If the bond buying program ends this March like the Federal Reserve has said it will, that means it could soon be more expensive to finance a home.
Remember, rates have been extremely low for some time, but as they go up, it could make it more difficult to afford the same type of home in mid 2022 that you would’ve been qualified to purchase in late 2021. That means if you’re thinking about financing a new home, or refinancing an existing home, the time to act is now. If you wait too long into the new year, you could be facing a higher mortgage rate, and that’s more money, ultimately, out of your pocket. You certainly don’t want to let the perfect home get away because you didn’t lock in a lower interest rate when you had the opportunity to do so. Florida home values are destined to go up, don’t miss out on the opportunity to own due to potential interest rate bumps.
While there are a lot of real estate professionals out there, most of us probably agree that there’s no one clear cut answer when it comes to the Florida real estate market forecast 2022. There are a lot of variables at play this coming year, including a possible increase, or even several increases in the mortgage rate over the course of the new year. There are also some possible fluctuations, depending on how many new residents come to Florida in search of residential real estate. It’s extremely difficult to come up with just one consensus for the market over the new year, but many of us do seem to be in agreement on a number of key issues.
More and more millennials seem to be interested in buying real estate. It may be a change in mindset, or it may just be that many of them are now approaching their mid 30s, which is a prime time in life for many first-time homebuyers. That means more buyers potentially searching for homes in places like Florida. Millennials alone make a good case for demand being up over 2022, and potentially over the next few years, as well.
There’s also the consideration of so many people still working remotely from home. Whether that continues through 2022 is something we’ll just have to wait and see. However, we’ve already seen people moving to Florida for the lifestyle and for more space now that some of them are no longer tied to some of the nation’s largest cities due to employment concerns alone.
There’s something else that could throw a bit of a curve ball into any predictions for 2022. We’re talking about the number of retirees. It’s no secret that Florida is a popular destination for retirees, and figures show there are a large number of people expected to hit retirement age over the next couple of decades. Some estimates suggest there will probably be around 10,000 people turning age 65 each and every day for the foreseeable future.
That’s a lot of people potentially looking for a new place to live and play in the State of Florida. Not only are people of this generation choosing to make the move to Florida, but oftentimes their families are following. Florida does particularly well when it comes to some of the best places in the nation to retire. In fact, in one study alone, Florida metro areas take almost every spot in the top 10. Sarasota and Naples take the two top spots, according to a U.S. News & World Report analysis on the “2021-2022 Best Places to Retire”. Daytona Beach and Melbourne come in at number three and four on the list, while Tampa, Fort Myers, Port St Lucie and Pensacola all make a showing in the top ten.
There are a lot of appealing communities in Florida that are specifically catered towards those age 55+. In particular, Fort Myers has a number of active adult retirement communities, including Pelican Preserve, Seven Lakes, Cinnamon Cove and Heritage Cove. Valencia Bonita is another good choice for older adults in Bonita Springs, while Valencia Trails in Naples offers a countless array of added amenities to entice the 55+ crowd.
In Central Florida, communities like Solivita and Four Seasons at Orlando in Kissimmee are age restrictive, while Orlando has Gatherings of Lake Nona. In the Tampa Bay area, On Top of the World Clearwater offers thousands of homes for those 55+, while Esplanade of Tampa offers hundreds of new and resale homes for buyers to choose from. The list goes on and on in cities across Florida. The Florida real estate market is hot, and we expect it to stay that way in 2022. People of all ages are attracted to a prime location, and Florida has so many enticing homes and communities for potential buyers to consider.
At this point, the only thing that seems likely to hold back the Florida real estate market is inventory, and again we are seeing signs of new development that will hopefully bring more residential options to the market in the near future. Places that offer the most for your money will continue to be big drivers when it comes to Florida home values. Affordability will likely still be top of mind for many buyers, especially as we approach the potential for rising mortgage rates.
We’re predicting the Florida real estate market forecast 2022 will bring some stabilization to single-family homes prices. We’ve seen home prices rise significantly in certain Florida markets over the past few years. Some of that is tied to low inventory and high demand. Unless interest rates get too high, there should still be some relatively high demand for homes in many Florida markets. Keep in mind, interest rates are incredibly low right now. Even when they do go higher, they likely won’t hit levels in 2022 that prove unattainable to most buyers. Remember though, any rise in the interest rate will likely impact your home buying potential. That’s why we suggest you don’t wait too long to lock in a rate and start the home buying process if you’re considering purchasing a new home in 2022.
When you buy real estate in Florida you want someone with a wealth of experience in the market. Someone who knows all about the local area and can help you find the very best property to meet your needs and your lifestyle. No matter your questions about specific areas, the home search, or the value of real estate in Florida, our goal to help you become informed about your real estate selling or buying interests and needs. Don't hesitate to reach out to the Meadows Team anytime for more insight into Florida real estate and help in locating new residential, waterfront, beachfront, commercial or investment property.