Understanding the progression of money accounts, stocks and other investments confirm prosperity. Trends that define the market of the largest asset, the home, are not evaluated until consideration for sale. Keeping an eye on real estate trends keeps homeowners alert to competing prices, buyer characteristics and the stability of the industry.
Here are five trends Florida homeowners should research to keep them knowledgeable about the current status of the real estate market.
Florida is one of the top destinations for vacation homes, retirees and a population looking for warm weather year round. In 2010, the population of Florida was 18,801,310. The estimated total in 2016 grew to 20,612,439. Increase in population causes a higher demand for housing.
Along with the migration to Florida cities, generations are starting to shift lifestyles. Baby boomers (ages 51-69), now empty nesters, are looking at three different options.
Retirement means downsizing for easier living and less maintenance. The second option keeps boomers in the workplace longer than their ancestors. Continued employment means they will remain in their home. When this happens, the demand for housing translates into new construction. The third option is the benefit of the family. Multi-generation homes can house three generations within a property.
Millennials (age 18-34) are escaping their parent’s basements and apartment rentals to purchase their own home. This generation counts for 34% of home buyers. Many, already married, are looking for detached single-family homes to grow their family. Tech-savvy skills are used to find neighborhoods with good schools, beautiful parks and limited crime.
Homeowners observing the demographics in their area will have the advantage of knowing who is looking and how their properties match the needs of shifting generations.
Everyone, even the Mature/Silents (age 72-90) are adapting to technology. Smartphones and tablets are the storefronts to knowledge, socialization and commodities. Today, our fingers get more exercise than our legs. Tapping and swiping helps us stay independent, productive and connected to a vast array of opportunities.
Knowledgeable homeowners will have their properties listed on several websites. The listing will include several still shots, a 360-degree interactive view of each room and an aerial shot of the entire property. A tech-savvy population requires quick access. Buyers can leisurely scan several houses in one sitting and schedule tours.
Advertising is the responsibility of the seller. The best type of publicity is “word-of-post.” Ability in managing social media allows homeowners to network and spread the word of the selling event faster. Posting time attributes to the success of a post.
- The best time to post on Facebook and Twitter is between 1 pm and 4 pm, every weekday except Wednesday. Peak times for Wednesday are 3 pm. Weekends and any weekday before 8 am and after 8 pm contribute to fewer views.
- The best time to post on Instagram during the week is between 6 pm and 8 pm and 11 am on the weekend.
The posting times are general information. Views depend on your audience. It’s a good practice to look at responses to regular post to determine when your audience is responding. Post photos of home upgrades to display the best attributes of the house.
Home renovations include more than upgrading to marble countertops. To be able to view the inside of the refrigerator from the grocery store is an advantage. Operating house lights from another state are growing as a requirement and not an accessory. While smart homes increase the price, it places a property far above others and drives potential buyers to the front door.
3. AVERAGE OR MEDIAN PRICE LISTING
Traditionally, a real estate agent or broker will list a home for sale on a database listing. The listing describes homes for sale within a particular area. Each listing has information about the property, length of time on the listing and the selling price.
One price is used to track the cost of real estate in an area. This price also signals the success of the market. Two different methods calculate this rate: the average method and the median method.
The average method, called the “average price listing,” uses the average from the total house listings to declare the average cost of properties for sale in a distinct area.
For example, 5 houses are listed for sale within an area. The listings are as follows:
- House 1 = $125,000
- House 2 = $220,000
- House 3 = $550.000
- House 4 = $189,000
- House 5 = $330.000
The total price for all listings is $1,414,000. Divide the total by the number of listed houses (5) and the average price listing for this area is $282,800. Because a high price listing can sway the average, this is an unfavored method for estimating the climate of the market.
The median or middle price listing looks at all the prices of the properties and takes the middle price to determine the average. This middle price, which is $220,000 from the example, represents the median price listing. This method says 50% of the houses are above this price and 50% of the houses are below this price. The median method prevents high-price homes from influencing the average.
Historical data graphs use the median method to plot consistency of pricing. If the graph has a downward trend, prices are dropping and the market is “soft.” An upward trend displays an increase in pricing and indicates a “cold” market.
Observing the trends of the median price listing will help homeowners understand competition and where the value of their home fits in the industry.
4. MORTGAGE RATES
Unless buyers pay cash, one of the first things they will do is check available mortgage rates. Low rates create a sense of affordability and encouragement for consumers. The market is hot and thriving. When rates are high, buyers are more cautious and may be discouraged. During this time, properties may have longer stays on listings.
Factors that affect the variation of mortgage rates:
- Current value of the dollar
- Employment rate and wage levels
- The Federal Monetary Policy which establishes the Fed Fund rate and adapts the money supply scale
- Mortgage-Backed Security which secures a bank loan for the bank in case the customer defaults
- The present condition of the real estate market on demand and supply of homes.
The current condition of mortgage rates predicts the possibility of the buying population. Homeowners can look at the going mortgage rates to help them understand the temperament of a home buying season.
5. CLIMATE CHANGE
Purchasing a coastal home meant quick access to beautiful beaches and incredible ocean views. Boarded by water on three sides, Florida has plenty of these properties to offer. Today, the effects of global warming and climate change bring several concerns to seaside property owners.
A global shift in atmospheric patterns creates climate change. Global warming causes ice to melt faster in Antarctica and Greenland. The new water slows Gulf Stream currents. Warmer ocean waters expand while eroding land sink. These events are one of the causes of quickly rising sea levels.
As one of the possible landing locations for hurricanes combined with frequent tropical storms, Florida already faces a constant threat of flooding. The rising of the sea levels adds another potential catastrophe. The National and Oceanic Atmospheric Administration (NOAA ) estimates South Florida experience a rise of 10-12 feet in sea level by 2100. The porous limestone bedding nestling Miami further complicates this issue.
For this reason, Florida homeowners should check sea level trends as coming activity will significantly affect real estate development. Zillow’s “for sale map” shows more listed homes on the coast than inland. On September 29th, the market is “cool” for St. Petersburg, Miami and Fort Lauderdale. But of course, the rating comes right after Hurricane Irma.
Even the stilt homes of Key West will not be useful on sinking land.