Over the past year, individuals have been forced to adapt to a much more expensive lifestyle in South Florida. Property values continue to rise higher than expected, which not only worries residents but also experts.
South Florida real estate professionals say the sudden surge in the cost of housing has longer-term effects to the region, as residents are experiencing a financial reckoning. With rent and housing prices in South Florida skyrocketing – as well as inflation and gas prices climbing – countless residents are curious whether the new high cost of living will soon become the new norm.
Researchers studying the real estate markets across the nation, trailing the United States rental and residential prices, see a growing number of overpriced properties. According to a Zillow report, 15 housing markets are now overpriced by over 50%. In the South Florida region alone, that number is 29.84%.
It’s challenging for the average South Florida home buyer to purchase their dream home – or any property at the moment – during a time when all-cash bidding wars are controlling the market.
Andrew Barbar, a broker with Keller Williams Realty Services Partners, believes that there is not a one-solution approach to fix this continuous issue affecting the residential real estate market throughout the South Florida region.
“Is this the new normal? The answer from a pricing perspective is yes,” Barbar said. “We need new tax reforms, zoning reforms, and more commercial real estate that could be repurposed into residential properties.”
Emmanuel St. Germain, a loan officer with Choice Mortgage in Boca Raton, points out that the continuous influx of out-of-state buyers still migrating to Florida are creating a dramatic shortfall in inventory.
St. Germain states that the quick fix to stabilize the current real estate market crisis is more inventory. However, a solution such as this can take up to four years to occur.
“We just haven’t had enough supply, which is keeping homes very expensive, which is great for sellers, but for buyers it has becoming very difficult,” St. Germain said.
According to a report issued by Realtor.com, the South Florida area – particularly in Miami – is undergoing one of the most catastrophic affordability crises ever witnessed in the last 40 years. The metropolitan areas, within both Miami-Dade and Palm Beach County, cost about 30% over the national average, making it the most overpriced market in the nation.
Aside from the current housing crisis, both inflation and climbing gas prices are formulating even more obstacles for many South Florida residents. The financial hurdles range from those individuals attempting to purchase a home to those who are renting.
Michelle Munoz, 28, a recent Master’s Degree graduate from Florida International University, struggles to purchase her first apartment due to the ongoing economic recession and overvalued properties available in the South Florida area.
Munoz has been searching long hours alongside her real estate agent to find the ideal property she can call home, as she seeks to leave her parent’s home and start the next chapter in her life.
“I’ve been working two jobs since I was 18 years old to get myself through school and build a solid income for myself,” Munoz said. “If you would’ve asked me 10 years ago if I would still be living at my parents house at 28 years old, I would’ve laughed. But the sad reality is that I am not sure if I can even afford a place on my own in today’s competitive market.”
So will this issue hold back individuals from migrating to South Florida or commence stirring individuals away? Statistics highlight the possibility if the trends persist over a prolonged course of time, it will take quite some time for improvements to surface.
“This is not going away tomorrow or in the next six months,” Barbar said. “All in all, I think we’ll wake up and it might be 10 years, and we’ll look back at this and see this as growing pains. Right now, it feels much worse than growing pains.”
This is primarily affecting individuals like Munoz, who are working multiple jobs to cover their living expenses. She and many other South Florida residents in search of a new home are hoping to witness some sign of hope sooner rather than later.