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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.

Despite the fact that the Coronavirus epidemic has delayed the investment frenzy of High-Net-Worth Individuals (HNIs), property market recovery has increased the uber-interest affluent in the real estate business. While the industry did encounter a small slowdown last year due to the second wave of COVID-19, it rapidly rebounded, and reports predict that it will continue to grow significantly in 2022. Whether it’s the primary home, a vacation home, or an investment property, HNIs are more than ever determined to invest in it. So, if you’re looking to expand your portfolio, here are the reasons why a luxury home is a great investment in 2022!

It’s vital to remember that not all high-priced properties qualify as luxury real estate. True luxury residences have qualities and features that set them apart as distinctive, exclusive, and more desired than the majority of other accessible alternatives.

Luxurious lifestyle & comfort

Luxury houses in Mississippi, for example, provide exquisite settings on expansive acre lots. Nature is all around, and it provides immediate leisure locations and activities. The beach, towering trees, running streams, bayous and rivers, and dazzling lakes are all close by, with easy access from the property. These outstanding locations also provide unrivaled peace and seclusion.

In addition, many luxury houses, particularly newly constructed or recently renovated buildings, have high-end and high-tech amenities and features. From the home gym, swimming pools, home theater, saunas, and full-on entertainment centers, with luxury homes, you are not just buying a property; you are buying a whole different lifestyle. 

Investment value 

While luxury real estate often has a considerably higher price tag, a recurring tendency is that it also has large increases and declines when compared to homes that are not labeled high-end. When it comes to investing in high-end homes, time is everything, just like it is with any other large-scale investment.

Following the recent real estate market collapse, experts anticipate that the recovery from the recession will be unequal across the United States. They estimate it will take until 2025 for everything to settle down. However, the good news is that if you want to invest in luxury real estate, now is a fantastic moment to do it. The luxury property has a higher possibility of providing a superior long-term ROI.

Another factor is that luxury residences have the advantage of being a performing asset, which means that they serve a functional purpose while growing in value. As a result, buyers consider them to be the ideal investment that guarantees increased earnings. Therefore, the real estate market predictions and latest analysis indicate that a luxury home is a great investment in 2022. Maybe even the best one you can make. 

Unmatched security 

Security is also a significant aspect for most purchasers. Ultra-luxurious residential complexes also ensure that your community, including the individuals who live in your building, are all educated, well-off, and from a solid background. To entice home purchasers, innovators are also stressing top-of-the-line security features in properties. Inventors ensure that luxury home systems have round-the-clock protection, which includes security assistance as well as high-tech gadgets.

Furthermore, people who invest in luxury real estate want to be certain they will have all the privacy and peace they require. They don’t want to deal with people trespassing and bothering them all the time. That’s why gated communities are very appreciated and desired in the luxury real estate market. 

Fortunately, in this day and age, there are some pretty sophisticated security measures in place that will most definitely make your residence secure more than ever before. So, when it comes to privacy and security, a luxury home is a great investment in 2022. 

State-of-the-art technology 

Technology and IT advancements have gone a long way toward elevating the living experience in high-end residences. Most home buyers nowadays seek cutting-edge technology in their homes, which includes entire home automation, solar generators, rainwater harvesting, remote control windows, panel boards, and more. These ultra-luxurious properties offer all of the conveniences that make house purchasers’ lives more comfortable and definitely easier.

These smart homes provide not only comfort but also security and safety. You can control everything in these homes from your phone, and there are even voice-controlled features. Therefore, this is truly a luxurious style of living that not everybody can afford. 

Better neighbors 

The advantages of raising your family in a luxury home go beyond just convenience. Luxury home developments are also viewed as the ideal place for one’s children to grow up and adults to socialize in. After all, such undertakings are really the result of a community with a particular level of culture, education, and beliefs. In other words, if you choose to buy this type of home, you’ll definitely be surrounded by better neighbors. This is an excellent reason why a luxury home is a great investment in 2022. It’s better for your kids and yourself. 

Status symbol 

Many wealthy people want to acquire a nice home because it offers them a sense of pride and prestige. They want to demonstrate to the world that they are living and experiencing the finest lifestyle imaginable. In addition, they have a lot of money, and what better way to spend it than on that gorgeous mansion that everyone wants? They want a house that proclaims their wealthy lifestyle to the world, rather than merely a postal address, which is extremely conventional and common.

After all, these people work hard every day to earn this money, so why not invest it in something that will show how hard they work, right? 

Moving to your new luxury home 

As you can see, the demand for luxury real estate is on the rise, and motivated investors are all over the US, especially in California and Florida. So, if you found the perfect luxury home in Florida for you and your family, you should start planning the relocation process, especially if it’s a long-distance relocation in question. What you should do is find a trustworthy moving company that will help you reach any part of the state trouble-free. After all, you’ve just bought a luxurious home to embrace a more comfortable lifestyle, so the relocation to it should be the same as well. 

Conclusion

The fact is luxury real estate is on the rise, and it doesn’t plan to stop booming. Therefore, if you’re looking for reasons why a luxury home is a great investment in 2022, this article gave you a few pretty solid ideas, from security and privacy to comfort and a guaranteed increase in value. If you’re financially stable enough, there is practically no good excuse not to invest in luxury real estate right now. This is a once-in-a-lifetime opportunity to do something good with all that money. So, what are you waiting for?

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!

The Big Story

Will rising rates normalize the housing market?

Quick Take:

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


Early innings for rising rates

Mortgage rates rose faster than expected in the first quarter of 2022, already surpassing forecasts for the year. The 30-year average mortgage rate rose swiftly in the two weeks after the Fed’s March meeting, up 0.5% between March 17 and 31 to 4.67%. This rapid increase has spurred purchases as buyers try to lock in lower rates before they climb higher. The data reflect the urgency buyers face. Nationally, home prices have reached yet another milestone: hitting above $200 per square foot, the highest level in history. But is the urgency justified? The answer is 100% yes, assuming you find the right home for you. Let’s dig into the numbers a little.
The average 30-year mortgage rate was 3.11% in December 2021, rising to 4.67% by the end of Q1 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 $2,584 if you got the same loan in March 2022 at 4.67%. Over the life of the loan, you’ll spend $160,560 more at 4.67%. In short, every percentage point matters significantly. As an aside, refinancing has decreased 60% below last year’s levels, according to the Mortgage Brokers Association. Economists and real estate experts seem torn between rates peaking just below or just above 5%. Because the Fed indicated the path of rate hikes for the rest of the year, mortgage rates increased in anticipation and are likely to be affected less when the Fed moves the federal funds rate in the future, if it sticks to its schedule. At this point, we can almost guarantee that rates will not decline substantially this year.
As we look at historical trends in inflation, we are curious about how effective the Fed’s rate hikes will be. Rates rose significantly in the 1970s, partially due to the inflation rate at the time. Mortgage rates peaked at over 18%, which is unimaginable today. As we look at the long-term data, we see that inflation tends to decline when the federal funds rate is above the inflation level. Currently, the federal funds rate is far below inflation, and the Fed doesn’t plan to lift it near the inflation level because of the economic shock that would ensue. The current cost to borrow is actually negative, which may incentivize more people to borrow and spend more in the short term, driving inflation higher. At current mortgage and inflation levels, the borrower, not the lender, gains around 3% from borrowing.
In addition to rising rates, supply still drives home prices. In March, the housing supply ticked up ever so slightly from the all-time low in February. We are entering the spring buying season, however, with the lowest inventory on record. From March 2020 to March 2022, the housing supply declined 62%. Over the past three months, which had the lowest inventory on record, home prices increased nearly 10%. Rising rates, in the short term, boost demand because potential homebuyers want to get ahead of the increase, but in the long term, they reduce demand. Because the market is so undersupplied, less demand is actually a good thing. Home prices simply cannot maintain the rapid increases. Although a housing bubble isn’t likely yet, a sustainable growth rate is better and safer for the long term.


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 close the first quarter at record highs

Single-family home and condo prices rose to all-time highs across Florida counties in March 2022 with the exception of Broward County condos, which declined from the February peak. Because sales often have a one-month lag, with homes going under contract around a month before the sale is complete, we cannot yet determine how significantly increasing rates have hit the market. Mortgage rate hikes really only lower demand in the long term, but in the short term, demand increases as buyers try to lock in a lower rate. The Florida housing market has a major advantage in that high demand is constant. Despite the huge increases in home prices over the past 12 months, the lack of housing supply will keep prices rising in the coming months.
The Fed is expected to raise interest rates by 0.25% at least six times this year, going from 0% to 1.90%. 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, 40-year-high inflation rate, 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 remain 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.

Low, but rising, inventory

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. Although the first quarter of 2022 had the lowest inventory on record, we are pleased to see that more new listings are coming to market. If this upward trend continues into the second quarter and inventory begins to rise more substantially, that will be a large indicator that the housing market is normalizing.
Sales have still 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 5% yet, but it almost certainly will. 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. The Days on Market reflects the high demand for homes in the selected Florida markets.
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 exceptionally low, indicating a strong sellers’ market.


Local Lowdown Data

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

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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