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Selling a luxury home is a challenge on its own, but if you are in a serious time crunch and you’re in a hurry to sell quickly, the stress and difficulty level only increase. Luxury properties tend to have a smaller pool of potential buyersbecause of their unique features. This means that selling your luxury home necessitates a more creative approach to marketing and requires more time and dedication, which you, unfortunately, don’t have. However, it’s not impossible to sell your luxury Key Biscayne property quickly and without damage to its price. In fact, that’s exactly what we’re here to help you with. We’ve consulted Florida’s finest luxury real estate experts and gathered tips that will help you have a smooth and quick sale. 

Tips to help you sell your luxury Key Biscayne property quickly

Selling a luxury home is all but a quick and easy task. In order to make the most of your sale, you need to thoroughly prepare yourself as well as your property. However, due to different life circumstances, you might not have the luxury to take your time and create a thorough selling strategy. You’re forced to handle it in a hurry while also trying to figure out the fastest way to move to Florida and decide which movers to hire. 

But take a deep breath and relax because, if you follow our tips, you can ensure to have a quick and successful sale of your luxury Key Biscayne property. Now let’s get to work! 

#1 Work with a Realtor® that has experience in selling luxury real estate

If you’re selling a luxury home, you’ll want to deal with a Realtor® that has a track record of success in the market. Relying on a team of luxury real estate experts is essential, especially when it comes to pricing and promotion. Most importantly, they’ll know the best ways to help you sell your luxury Key Biscayne property as quickly as possible. 

We’re sure that someone from your personal network can help you discover the finest Realtor®. The more successful luxury property sellers in your area you can find, the more likely it is that you will find someone who is a suitable match for your needs. Don’t limit your search to luxury real estate organizations if you don’t know anyone. Check out their past sales and read any reviews you can discover.

#2 Stage your home to impress the widest range of buyers

Staging your property for sale is crucial to getting it sold since it helps potential buyers envision themselves living there. It’s especially true in the luxury property market, where residences are often fully personalized to suit the owners’ likes. As long as a potential buyer can see the property’s true potential and isn’t swamped by your own particular style, you don’t need to demolish your home to its bare bones.

However, as you won’t have time to turn on your creativity and think of the best ways to present your luxury Key Biscayne property to buyers, consider hiring a professional home stager. They will know how to make the most of their time to emphasize your home’s most unique qualities. Although it might be costly, especially due to the time limit, it’s worth not having your home sit on the market for months.

#3 Boost your home’s screen appeal

Creating an attractive online listing is how the process of selling your luxury Key Biscayne property starts. Keep in mind that poor photography doesn’t fly in the normal real estate market nowadays, so it’s certainly not going to fly here either. You’ll need to spend a lot of money on high-quality images if you want to attract serious buyers. Ask your Realtor® for a recommendation. They might know an excellent professional photographer.

Adding videos and a virtual property tour to your listing will help it stand out from the competition. Suppose your house is situated on a large plot of land. In that case, aerial photography may be an excellent way to show prospective buyers everything they need to know before making the trip out to see it in person. When it comes to appealing to overseas buyers who make up a large portion of the luxury-buying market but can’t necessarily see a home in person, having a lot of pictures is critical.

#4 Determine the right asking price

One of the most difficult aspects of selling a high-end property is determining the right price. Pricing it too high means risking losing potential buyers and having your home sit on the market for months. You really don’t have time for that. On the other hand, pricing it too low means risking settling for much less than your home is actually worth.

Therefore, the key lies in finding a balance, and you can only do this with the help of your Key Biscayne Realtor®. They will help you select a price that reflects the genuine value of your home without scaring away a significant number of potential buyers. They will also understand the sense of urgency and take it into account when helping you set the right asking price.

The bottom line

The best way to ensure you sell your luxury Key Biscayne property quickly and successfully is to work with experienced luxury real estate professionals. They will have market insights and knowledge to ensure your luxury property quickly finds a new buyer. So wait no more; reach out to Florida’s luxury real estate pros and start working with them on selling your Key Biscayne home.

Miami is full of luxurious properties that are stunning to look at. But no luxurious Miami home is complete without a beautiful yard. However, landscaping in the Sunshine State, especially if you live near the beach, can be a challenging task for many people. The key is to know what you want to achieve and make a good plan. With a bit of creativity, effort, and research, you’ll be able to create a wonderful and unique space you’ll love. So, without further ado, let’s explore some excellent high-end landscaping ideas for your Miami home!

Time to plan

Making a plan is crucial if you want your home to have a cohesive appeal. Once you determine your budget, choose the style, and work out all the details, you’ll be ready to create your dream home. Here are some things you should take into account.

Factor in the outdoor amenities

Do you have a pool, porch, gazebo, or some other outdoor amenities? If this is the case, you want to plan your landscaping to complement the rest of your home. Consider pathways, fountains, benches, and similar items when choosing and arranging plants and flowers for your home.

Of course, consider potential repairs or remodeling if you plan to buy a new Miami home. Plan these with landscaping in mind so you can make the most of this summer project.

Choose a style that suits you

Another thing you want to keep in mind regarding landscaping ideas for your Miami home is style. There are many ways to make your home look lush and luxurious. Therefore, the style you choose should reflect your personality and preferences. Casual Boho appeal or sleek modern lines? Or maybe a classic tropical paradise look? Choose the plants and designs that show your taste and style.

Take maintenance into account

Of course, maintenance is an important factor. If you love tending your garden and have enough time to do it, there’s no limit to what you can do! On the other hand, you can always hire professionals to keep your yard in the top shape.

Additionally, if you’re planning to buy a home in Miami, whether it’s old or new, it’s always a good idea to have a home warranty. That way, you’ll have a safety net in case of damage and unforeseen expensive repairs.

But not all home warranties are the same, so ensure you explore different providers. Some of them will offer additional coverage for your garden and your landscaping equipment. So, don’t hesitate to ask everything you want to know and explore your options.

However, if neither of these options seems attractive to you, it’s best to plan carefully and choose the plants that are easy to maintain.

Take some time to research the plants

Miami weather is what attracts most people to this charming beach city. But, it also means that you need to choose plants that thrive in a tropical climate and can survive somewhat harsh conditions. Sand, sunshine, and salty conditions are essential factors if you have a beach home. Also, consider the size and shape of the plants you want and the maintenance level they require.

What are some of the best plants for your enchanting Miami garden?

Not only will the lush garden make your home attractive, but it will also add value to it. So, let’s look at some plants that thrive in Miami’s climate and will make your home look stunning!

Palm trees

Nothing says tropical paradise as much as palm trees. Not only are they green and beautiful all year round, but they also come in various sizes. Whether you opt for the towering variants or small potted palms, they’ll fit perfectly with any style you choose for your home.

Beach rose

Beach rose, or Rosa Rugosa, is a hardy plant that can endure poor soil and salty conditions very well. That makes it ideal for your Miami home. Plus, it can help you control erosion and attract wildlife, too. Dark green leaves in contrast with white or pink flowers will both look amazing and lure the insects, birds, and even deer to your beautiful garden.

Ferns

However, ferns are ideal for you if you want a more subdued yet iconic look. You can grow them easily in hanging baskets and pots, or you can use them as shrubs or groundcover if you prefer. Apart from regular watering and pruning, they won’t demand a lot of your attention.

Hibiscus

Another iconic and instantly recognizable plant is the hibiscus. Unique colors and shapes of hibiscus blooms will lend variety to your property. But keep in mind that they can grow very tall, so ensure you plan for that in your landscaping.

Ivy geranium

Planting ivy geranium is also one of the stunning landscaping ideas for your Miami home. Vibrant red flowers will look fantastic in your hanging baskets and add a touch of luxury to your home. Additionally, this plant loves the Miami climate and is easy to take care of.

Gardenia

Gardenia is a versatile plant with beautiful and unique flowers. With their sweet and gentle scent, they’ll make your home a joy for all the senses. They grow in evergreen bushes, and their white flowers blossom in late spring and early summer. Also, they don’t require much care – a lot of direct sunshine that Miami always provides and some watering.

Extra landscaping tips for your Miami home

However, choosing the right combination of plants for your landscaping is only the beginning. The next step is arranging them to produce the maximum effect. However, while doing so, there are a few landscaping tips you should keep in mind:

Enjoy your beautiful home!

As you may see, there are many wonderful landscaping ideas for your Miami home. Use your imagination and follow our tips to make your outdoors look appealing and beautiful!

As we enter the midpoint of 2022, the rush for luxury residential real estate across the sun-kissed southeastern coastline remains unprecedented. An influx of home buyers coming to Miami from areas with state personal income taxes fueled a whopping rise in property values, and sellers are massively considering what amenities can maximize property value both in the short and long term. If you’re one of them, here are seven ways to add value to your Miami home that stole the spotlight.

#1 Extend your home

If you’re looking to sell your Miami home for the best price, you should consider extending it. We all want extra space. Bringing a whole new area that you can enjoy, be it a spare bedroom, en-suite bathroom, a home office (these are a huge trend), storage, or living space, can add up to 23 percent to your property’s value.

But if you are forking out for a home extension, you’ve got to make sure it’s worth it. So, before you get started with the work, compare the building costs and the value gain. Also, don’t forget to consider the complexity of the build. 

Another thing you can consider is Additional Dwelling Units. ADUs are a home trend that evolved during the pandemic and one that looms large this year. They’re typically small, self-contained, and separate from the house, and they’re incredibly useful when one needs a place to work away from all the noise or somewhere visiting family members, and friends can stay. What’s more, ADUs may also serve as a source of income for homeowners.

#2 Add more storage

Talking about extra space, additional storage space is an upgrade that will probably never fall out of favor. This doesn’t have to be a completely separate structure, such as ADUs (although it can be!). It can be any type of storage, from a beautifully designed walk-in closet to a pantry closet in an apartment. Whatever you decide it should be, it will add value to your Miami home.

#3 Add style in key rooms

Real estate experts in Miami consistently swear by a home’s key rooms, saying that updated kitchens and bathrooms help sell houses faster and improve resale value. However, the importance of choosing quality materials for these areas is not something you’d want to underestimate. This mainly goes for the kitchen cabinetry, given that it’s usually subject to a great deal of wear and tear. But, with the right design and suitable materials, renovating a kitchen or bath space will always, without question, boost your home value.

Keep in mind, however, that these are large projects. Plus, kitchens and bathrooms are the most utilized rooms in a home, and you need them to function. So, you might want to avoid starting with the work before you settle into your new abode. If you’re moving locally, all the easier. You can easily find expert help in the area and relocate by the time renovations begin.

#4 Create a dedicated home office

Yesterday – a business challenge, today – the norm: the work-from-home population continues to grow day by day, and so does the demand for home offices. If you’re selling a house, creating one or dedicating existing space to functional a home office is an excellent investment and a fantastic feature to highlight in your listing. These are real environments that foster productivity but are also stylish, thoughtfully designed, and comfortable. Your new home office can also have an en-suite bath or a bar – whatever makes it shine is worth mentioning to prospective home buyers. It will, without a doubt, add value to your Miami home.

#4 Enhance outdoor living

Investing in outdoor living provides a fantastic ROI for most homeowners, making it a perfect home improvement project. Of course, Miami offers plenty of opportunities for being outdoors. However, simply building a new deck or patio or revamping the balcony will make your home more desirable to buyers looking for a new home. For those who are looking to really stand out, some of the features that buyers truly love to see in an outdoor space include:

#5 Give your home’s exterior a once-over

Anything that enhances your home’s curb appeal will reap the rewards when it comes to saleability. Buyers always pay attention to the exterior – it helps them decide whether they like a property before even stepping inside.  

For starters, buyers love to see attractive landscaping; it implies that you maintain and take care of the property. You don’t have to break the bank, either. Basic yard care, such as mowing the grass, fertilizing the lawn, and controlling the weeds, will do the trick.

You can make your property stand out by:

You should consider upgrades that lower the maintenance hassles. If your home is ten years old or more, some big-ticket items home buyers would have to fix or replace in the next few years might scare them off and make them look elsewhere. So, make sure that the roof doesn’t leak, gutters and downspouts are functioning, the basement is dry, floors are solid, and walls are in good repair. You should also check your HVAC and plumbing systems and consider installing new siding.

#6 Make your home more efficient

If you decide to tackle energy-efficient home improvements, it will be worth your while. Buyers are generally willing to pay over the asking price for a home if they can cut down on annual utility costs and other bills long-term. Even more importantly, they’re happy to reside in a home that helps reduce their overall impact on the environment.

For instance, if it is clear that your roof has taken the brunt of seasonal weather changes, you might consider replacing it. Leaks or missing, cracking, or curled shingles aren’t exactly a selling point. And, while you’re at it, consider using materials such as sheet metal or clay rather than asphalt. These materials help to reflect heat instead of absorbing it, thus naturally keeping the entire house cooler. If there’s no need to replace the roof entirely, try adding a cool roof coating that reflects heat.

Other ideas that add value to your Miami property and make it energy efficient include:

#7 Consider a utility room

Utility rooms might be where you’d do tedious house chores and store practical equipment, but the reality is that any home would be lucky to have one. Plus, if you design and outfit your laundry room well, it can be a complete game-changer. These are important spaces, the engine rooms of a home, we may call them, and they will add value to your Miami home. Consider space-saving designs and smart storage solutions, and place it in a convenient location, and it will make a significant impact on the buyers.

The Big Story

Rising rates may not normalize the housing market, but they may help inflation

Quick Take:

Note: You can find the charts & graphs for the Big Story at the end of the following section.


Prices continue to rise as mortgage rates hit 13-year highs

After the Fed’s May meeting, Fed Chair Jerome Powell announced that they are raising their benchmark rate by 0.50%, the largest hike since 2000. Earlier this year, the Fed was expected to raise interest rates by 0.25% at least six times this year, going from 0% to 1.90%. Now that each increase will most likely be 0.50%, the market expects the federal funds rate to reach 2.75% to 3.00% by the end of the year, which would be the highest in 15 years. Although the fed funds rate doesn’t directly affect mortgage rates, the rate hike moves into the broader economy quickly. Over the past four months, mortgage rates have moved about 2% higher for both 30- and 15-year fixed mortgages. Economists now estimate that 30-year mortgage rates could climb above 6% by mid-2022, which is fast approaching. Because the Fed indicated the path of rate hikes for the rest of the year, we expect mortgage rates to top out at around 7% this year for prime borrowers.
A rising rate environment increases short-term demand as buyers try to lock in lower mortgage rates, which is what we are seeing now. The increased short-term demand is driving prices right now outside of supply, which begs the question: Will higher mortgage rates actually drive down prices? No, they sure won’t.
Using history as our guide, we can see that home prices continued to rise even as mortgage rates peaked at over 18% in the 1970s, which would translate to about $7,500 per month on a $500,000 loan. Luckily, we aren’t going back to those rates. Higher rates, however, will do exactly what the Fed intends, which is to take money out of the economy and decrease overall demand. The average 30-year mortgage rate was 3.11% in December 2021, rising to 5.10% by the end of April 2022. If you bought a home in December and financed it with a $500,000 mortgage loan at 3.11%, your monthly spend on principal and interest would be $2,138 — versus $2,715 if you got the same loan in April 2022 at 5.10%. Over the life of the loan, you’ll spend $207,720 more at 5.10%. From the Fed’s perspective, that equates to roughly $500 less per month to spend on goods and services, bringing down aggregate demand when we multiply that reduction of disposable income across households. The gradual rate increases are meant to avoid sending the economy into a recession.
In addition to rising rates, supply still drives home prices. In April, the housing supply ticked up ever so slightly, but it’s still 60% lower than the number of homes on the market in April 2020. We are entering what is traditionally the hottest time of year for the housing market with a record low supply of homes. Over the past four months, which had the lowest inventory on record, home prices increased 12%.
If you are considering buying a home, there aren’t many reasons to wait. Home prices and rates are still rising. The low supply continues to make the market extremely competitive. We are starting to see some softening in demand, but not nearly enough to balance the supply side of the market.


Big Story Data


The Local Lowdown

Quick Take:

Note: You can find the charts/graphs for the Local Lowdown at the end of this section.

Home prices continue to rise despite rising rates

Single-family home and condo prices rose to all-time highs in April 2022, but it’s still too early to determine how increasing rates will affect the market. Mortgage rate hikes only lower demand in the long term. In the short term, demand increases as buyers try to lock in lower rates. Over the past four months, the average 30-year mortgage rate has increased 2%, which means a 27% increase in monthly mortgage payments, yet prices keep moving higher.
The factors now affecting home prices are anticipated to have mixed results, unlike the past two years when all factors caused prices to increase. Rising interest rates, which will hopefully curb the rising 40-year-high inflation rate, will make homes less affordable and dampen demand over the rest of the year. They may, however, also lower supply as current homeowners reconsider their plans to sell.
Many homebuyers are also home sellers, moving from one home to another. Newer homebuyers and homeowners who refinanced over the past two years locked in one of the lowest rates in history, making moving a more difficult financial decision. This could keep supply unseasonably low with fewer new listings coming to market, as we saw in April. In general, the Fed doesn’t have a tool to deal with supply-side issues: It uses monetary policy to affect demand, making money more or less expensive. As a result, the Fed’s rate hikes may result in unintentional effects on supply. In the selected Florida markets, the lack of housing supply will keep prices rising in the coming months.

Inventory declines further

Housing inventory declined in April, which shouldn’t be surprising at this point, as we haven’t seen anything resembling normal seasonality in a long time. This serves as an early indicator that home supply will remain depressed this year. The high demand and lack of new listings over the past two years brought single-family home and condo supplies to record lows month after month. With April inventory declining rather than rising, the next three months will help us forecast how inventory levels will trend for the rest of the year.
Even though inventory is low, sales remain incredibly high, especially when we account for available supply. This trend once again highlights the high demand in the area. Sellers can expect multiple offers, and buyers should come with competitive offers.

Months of Supply Inventory further indicates high demand relative to supply

Homes are selling faster than ever, and buyers must put in competitive offers.
Months of Supply Inventory (MSI) quantifies the supply/demand relationship by measuring how many months it would take for all current homes listed on the market to sell at the current rate of sales. The average MSI is around four to five months in Florida, which indicates a balanced market. An MSI lower than three indicates that there are more buyers than sellers on the market (meaning it’s a sellers’ market), while a higher MSI indicates there are more sellers than buyers (meaning it’s a buyers’ market). Currently, single-family home and condo MSIs are exceptionally low, indicating a strong sellers’ market.


The Big Story

Record highs and lows in the housing market

Quick Take:

Note: You can find the charts & graphs for the Big Story at the end of the following section.

Amplified seasonal trends

Seasonality in the housing market was incredibly steady before the pandemic. Prices typically rose from January to June, when inventory was low but rising, and then flattened from July to December, when inventory was high but declining. In January 2020, homes were already undersupplied, hitting a record low with just over a million homes for sale on the market. When the pandemic hit, demand for homes exploded, dropping inventory to shockingly low levels. During the 18 months between January 2020 and June 2021, inventory declined 49% and prices increased 32%, doubling the total price increase of the previous three years combined. By January 2022, inventory had reached an all-time low, down 60% in the past two years, while home prices reached a record high, up 34%.
Home sales have only gotten quicker as the market has become more efficient. We can see this trend through the Days on Market and Months of Supply Inventory (MSI). Before the pandemic, homes were already selling more quickly, primarily because of technology and an increasingly competitive market. A more efficient market matches the right people with the right home at a fast pace, causing a drop in supply when new homes aren’t being built. MSI, which quantifies the supply-and-demand relationship, is at a record low, further indicating a sellers’ market. The low supply, high prices, and speed of purchases have shifted homebuyer makeup.
The number of first-time buyers dropped 6% over the past year, while sales to investors rose 7%. All-cash offers increased significantly, often disproportionately affecting first-time buyers, who are most likely to need financing. With rising mortgage rates, many first-time buyers will once again be hit hardest with higher monthly payments. Rates have already risen, because the Fed is expected to start increasing rates in mid-March, and they will only climb higher. Because of the rising cost, the average age of homebuyers is climbing. The average first-time buyer is now 33 years old, and the average repeat buyer is 56 years old, an all-time high. As we enter a new chapter in the housing market, one characterized by rising rates and very low supply, demand can only go one direction: down. But for now, prices aren’t in danger of declining.
Over the next several months, we expect supply to matter more than the interest rate hikes when it comes to home prices. Economists anticipate that the Fed will start the first of six incremental 0.25% increases in March. The Fed uses interest rates in particular as a tool to meet its dual mandate of maximum employment and price stability. With inflation at a near-40-year high, prices for most goods are rising while incomes are not. This situation gives the Fed little choice but to raise interest rates. Essentially, when the cost to borrow increases, fewer people want to borrow, leading to less consumer spending (less demand), which lowers prices.
As we enter this new chapter of rising mortgage rates, we don’t expect home prices to decline significantly, if at all, because supply is still such a driving factor. The low supply means that demand can decline without negatively impacting prices. We don’t expect home prices to appreciate at the record level we experienced over the past two years, but we do expect to see an increase. We are still in the middle of one of the strongest sellers’ markets in history. Buyers must come in with fast, competitive offers in this environment.

Big Story Data

The Local Lowdown

Quick Take:

Note: You can find the charts/graphs for the Local Lowdown at the end of this section.

Home prices hit record highs in front of Fed rate hikes

Single-family home and condo prices rose to all-time highs across Florida counties in February 2022 with the exception of Orange County single-family homes, which declined from the January peak. Mortgage rate hikes really only lower demand in the long-term; in the short-term, demand increases as buyers try to lock in a lower rate. The housing market in Florida has a major advantage in that people simply want to live there. Despite the huge increases in home prices over the past 18 months, Florida’s lack of housing supply will keep prices rising in the year to come.
The Fed is expected to raise interest rates by 0.25% six times this year, going from 0% to 1.50%. We are now entering a period where factors that affect prices are more mixed, unlike the past two years when all the factors caused prices to increase. Rising interest rates, which will hopefully curb the still-rising inflation, will make homes less affordable and dampen demand over the course of the year. But inventory is so low that even with less demand, the market will likely be undersupplied. It might seem counterintuitive that home prices can still appreciate after increasing so much over the past two years, but with inventory at record lows, home prices in 2022 will still increase — though at a slower rate than in 2021. With high sales relative to the available inventory, we anticipate a competitive market in the year ahead.

Record-low inventory across Florida

Florida, like the rest of the country, has a historically low housing inventory. The sustained high demand and lack of new listings over the past year brought single-family home and condo supplies to record lows across markets. We are seeing that far more people want to live in Florida than want to leave. Sales have been incredibly high, especially when accounting for available supply, again highlighting demand in the area. Sellers can expect multiple offers, and buyers should come with competitive offers. The incredibly high demand we’ve seen over the past year might wane as interest rates increase; however, the supply is so low that the market can handle a drop in demand without negatively affecting prices. The 30-year average fixed rate mortgage hasn’t climbed above 4% yet, but it almost certainly will as the Fed starts raising rates. If mortgage rates reach 5%, demand will likely decline more substantially. In the next few months, demand will remain high relative to available supply.

Months of Supply Inventory further indicates high demand and low supply

Homes are still selling extremely quickly. Days on Market declined in February, which further highlights demand, as homes typically take longer to sell in the winter.
Months of Supply Inventory (MSI) quantifies the supply/demand relationship by measuring how many months it would take for all current homes for sale on the market to sell at the current rate of sales. The average MSI is four to five months in Florida, which indicates a balanced market. An MSI lower than that indicates that there are more buyers than sellers on the market (meaning it’s a sellers’ market), while a higher MSI indicates there are more sellers than buyers (meaning it’s a buyers’ market). Currently, single-family home and condo MSIs are historically low, indicating a strong sellers’ market.

Local Lowdown Data

The Big Story

Mortgage Rate Hikes Now Definite

Quick Take:


The Fed Dual Mandate

On January 26, 2022, the Federal Reserve (the Fed) indicated that it would raise the federal funds rate as soon as March for the first time in over three years. The Fed adjusts the federal funds rate to influence broader interest rates, which directly affect the borrowing costs of banks. Generally, if bank borrowing costs are low, consumer borrowing costs will be low(er), and vice versa. The Fed uses interest rates in particular as a tool to meet its dual mandate of maximum employment and price stability. Employment and price stability are long-term indicators for home prices. 

We will start with the good news. Employment rebounded considerably from the highest spike in unemployment in modern history in spring 2020 to pre-pandemic levels by December 2021. As you might imagine, high unemployment rates for extended periods lead to less overall wealth: Fewer people buy homes, and more people experience foreclosures, thereby lowering home prices. Although unemployment seemed dire in 2020, employment is now on solid ground. If we view the current record-high 10.5 million job openings, along with the nearly 10 million new businesses created over the past two years, we get a better understanding of why unemployment dropped so significantly despite a record number of job openings. Simply put, people are working, and that is good for individual wealth and the larger economy. 

On to the kind-of-good, kind-of-bad news … rising mortgage rates could help curb inflation and create a more balanced housing market (although 2022 will surely be a sellers’ market), but it will make homes more expensive monthly, hitting first-time homebuyers the hardest. With the federal funds rate at 0% and inflation at a near-40-year high, rate hikes are expected to combat inflation. Essentially, when the cost to borrow increases, fewer people want to borrow, leading to less consumer spending (less demand), which lowers prices. We can look to the last inflationary period, the 1970s, as a loose guide. Inflation today is likely to be much more transitory than it was in the 1970s, but we can still expect a rise in mortgage rates like we saw then. Luckily, however, we will certainly not reach the 18+% mortgage rate that we saw in the early 1980s. As it was then, the Fed is obligated to do something now. While we wish that we could always be in periods of high employment, low inflation, and low interest rates, as we experienced for nearly a decade before the pandemic, we must recognize the atypical nature of that period. 

As we enter this new chapter of rising mortgage rates, we don’t expect home prices to change significantly, if at all, because supply is still such a driving factor. In December 2021, there were 57% fewer homes on the market than in December 2019. The low supply means that demand can decline without affecting prices. Does it matter if 10 offers drop to five? Probably not, and it might even create a better market. Sellers tend to become buyers, so unless you’re a first-time homebuyer, you’ll likely experience both sides of the market. Because sellers are often selling one home and buying another, it’s essential that sellers work with the right agent to ensure the transition goes smoothly. 

We don’t expect price appreciation to see the record gains we experienced over the past two years, but we do expect home prices to increase. Another factor at play over the past two years was a sharp increase in disposable income, which has now normalized. People had more money to spend over the past two years, and we saw that throughout markets: The housing market, the stock market, cryptos, art, jewelry, etc. all reached record high prices. As disposable income has dropped to a more normal level, we can expect assets to appreciate at a more normal pace.


Big Story Data

The Local Lowdown

Quick Take:

Home price movements in a rising rate environment

Single-family home prices began the year at all-time highs in the selected Florida markets. After single-family home prices appreciated significantly in the first half of 2021, it made sense that price appreciation slowed in the second half of the year, a trend that has continued into 2022. The housing market in Florida has a major advantage in that people simply want to live there. According to census data, Florida has experienced consistently high population growth for nearly a decade. The pandemic only accelerated the population growth in Florida, causing demand for housing to skyrocket.

Mortgage rate hikes really only move demand in one direction: lower. We are now entering a period in which factors that affect prices are more mixed, unlike the past two years when all the factors caused prices to increase. Rising interest rates, which will hopefully curb the still-rising inflation, will make homes less affordable and dampen demand. But inventory is so low that even with less demand, the market will likely be undersupplied. It might seem counterintuitive that home prices can still appreciate after increasing so much over the past two years, but with inventory at record lows, home prices in 2022 will still increase — though at a slower rate than in 2021. 

Condo prices have increased considerably over the past year as demand has grown. Condo prices in Miami-Dade County and Broward County reached record highs in January, while Orange County prices declined slightly from the December 2021 peak. With high sales relative to the available inventory, we anticipate a competitive market in the year ahead.


Record low inventory across Florida

We entered 2022 with historically low inventory. The sustained high demand and lack of new listings over the past year brought single-family home and condo supply to record lows across markets. We are seeing that far more people want to live in Florida than want to leave. Sales have been incredibly high, especially when accounting for available supply, again highlighting demand in the area. Sellers can expect multiple offers, and buyers should come with competitive offers. The incredibly high demand we’ve seen over the past year might wane as interest rates increase; however, the supply is so low that the market can handle a drop in demand without negatively affecting prices.


Months of Supply Inventory further indicates high demand and low supply

Homes are still selling extremely quickly. Days on Market is rising slightly for single-family homes, but this is more a function of seasonality than a lack of demand. 

Months of Supply Inventory (MSI) quantifies the supply/demand relationship by measuring how many months it would take for all current homes for sale on the market to sell at the current rate of sales. The average MSI is four to five months in Florida, which indicates a balanced market. An MSI lower than that indicates that there are more buyers than sellers on the market (meaning it’s a sellers’ market), while a higher MSI indicates there are more sellers than buyers (meaning it’s a buyers’ market). Currently, single-family home and condo MSIs are historically low, indicating a strong sellers’ market.

Our team is committed to continuing to serve all your real estate needs while incorporating safety protocol to protect all of our loved ones.

In addition, as your local real estate experts, we feel it’s our duty to give you, our valued client, all the information you need to better understand our local real estate market. Whether you’re buying or selling, we want to make sure you have the best, most pertinent information, so we’ve put together this monthly analysis breaking down specifics about the market.

As we all navigate this together, please don’t hesitate to reach out to us with any questions or concerns. We’re here to support you.


The Big Story

New Year, Same Housing Market

Quick Take:

Note: You can find the charts & graphs for the Big Story at the end of the following section.


Will the housing shortage reverse?

The driving force behind the substantial price increases over the past two years has been the supply of homes, or lack thereof. So, will the housing shortage reverse? The answer is no, as there is no reasonable scenario that would bring active listings to pre-pandemic norms. Before February 2020, seasonal inventory typically peaked in the summer months, but it was trending slightly lower each year. In 2016, inventory peaked at 1.55 million active listings, and by 2019, the peak fell to 1.35 million homes. Inventory in 2021 reached its highest point at approximately 621,000, a 54% decline over two years. Homebuilders simply cannot build fast enough, especially in sought-after urban areas that have already been developed, and new listings are peaking far lower than the historical seasonal norms. 

At the same time, we are on pace to see around a million more homes sold in 2021 than in a typical year, based on the long-term average. In other words, more homes are selling, despite the historically low inventory, which is further driving down inventory. In 2022, we expect demand to remain elevated and supply depressed, which should keep home prices from depreciating. 

Price appreciation likely will not see the record gains we experienced over the past two years, which is actually good. If we learned one thing from the mid-2000s, we know that we don’t want another housing bubble. The deceleration in price increases, therefore, actually benefits the current market. From a practical standpoint, home prices rising at 20% per year is unsustainable and would certainly cause a major collapse. Moving through 2022, we expect year-over-year price increases to move back to historical norms, in the 5–10% range. 

Fed rate hikes in 2022 could drastically affect appreciation as well, which, again, isn’t a bad thing. The low-cost financing we’ve seen over the past two years could be coming to an end (although it’s difficult not to take a believe-it-when-I-see-it-approach to rate increases). When we account for current inflation, which is the highest it’s been since 1981, the real rate of borrowing is negative if you borrow at a rate below 6.8%. Simply put, you’re getting paid to borrow! We don’t expect this phenomenon to last long — it’s a fairly unique situation.

The market remains competitive for buyers, but conditions are making it an exceptional time for homeowners to sell. Low inventory means sellers will receive multiple offers with fewer concessions. Because sellers are often selling one home and buying another, it’s essential that sellers work with the right agent to ensure the transition goes smoothly.


Big Story Data

The Local Lowdown

A hot market ahead

Quick Take:

Home prices still have room to run in 2022

After single-family home prices appreciated significantly in the first half of 2021, it made sense that price appreciation slowed in the second half. Miami-Dade and Broward counties’ single-family home prices reached all-time highs in December, while Broward County prices closed the year slightly below their peak. It might seem counterintuitive that home prices can still meaningfully appreciate after increasing so much over the past two years, but with inventory at record lows, 2022 will likely be one of the hottest markets we’ve seen. 

Condo prices have increased considerably over the last year as demand has grown. Condo prices across the selected markets reached record highs in December. In most of the country, we saw prices decline in the second half of the year, but the sustained record highs highlight the strong demand and desirability in Florida. With high sales relative to the available inventory, we anticipate a competitive market in the year ahead.

Record low inventory across Florida

Overall, single-family home and condo inventory has been on a downward trajectory for the past two years due to the sustained high demand, bringing single-family home and condo supply to historic lows. We are seeing that far more people want to live in Florida than want to leave. Sales have been incredibly high, especially when accounting for available inventory, again highlighting demand in the area. Sellers can expect multiple offers, and buyers should come with competitive offers.

Months of Supply Inventory further indicates high demand

Homes are still selling extremely quickly. Days on Market is rising slightly for single-family homes, but this is more a function of seasonality than a lack of demand. 

Months of Supply Inventory (MSI) quantifies the supply/demand relationship by measuring how many months it would take for all current homes for sale on the market to sell at the current rate of sales. The average MSI is four to five months in Florida, which indicates a balanced market. An MSI lower than that indicates that there are more buyers than sellers on the market (meaning it’s a sellers’ market), while a higher MSI indicates there are more sellers than buyers (meaning it’s a buyers’ market). Currently, single-family home and condo MSIs are historically low, indicating a strong sellers’ market.

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