What trends should consumers, realtors, and policy makers watch out for when it comes to real estate in Florida over the next year? Drivers of homebuyer demand include shifting demographics, shifts in consumer housing preferences – such as location, size and lot size, persistently low mortgage rates and rental prices in rising rapidly, Florida Realtors chief economist Dr. Brad O’Connor told more than 300 realtors during the 2022 Florida Real Estate Trends Summit last week.
“The biggest wave of millennials is now in their mid-30s, and they’ll be in their prime homebuying years for a while,” O’Connor said. “And who are they buying from? Gen X – and there are a lot more millennials than Gen X. And, here in Florida, retirees are a big deal – combined with millennials, that puts pressure on the market here.
The event was part of this year’s Florida Realtors Mid-Winter Business Meetings at Renaissance SeaWorld Orlando. In addition to O’Connor, the summit featured Dr. Jessica Lautz, vice president of demographic and behavioral insights at the National Association of Realtors, who shared her thoughts on buyer demand.
Florida Realtors Chief Economist Dr. Brad O’Connor:
Analysts are waiting to see what happens with inflation and its impact on long-term interest rates, O’Connor added, noting that some forecasts see the 30-year fixed-rate mortgage hitting 4, 5% by the end of the year. “That’s what we experienced a few years ago, and if it happens, while it will certainly impact buyer demand and financing, we’ll see the market change and return to similar terms,” did he declare.
Residential construction and supply will also be a factor to watch when it comes to buyer demand.
“It’s a long-term problem; we have a long way to go when it comes to construction,” O’Connor noted. “We need construction workers. Builders continue to face constraints, but have been building at the fastest pace in recent memory. However, high prices and low starter home construction rates will remain a challenge.
Looking to 2021, the latest housing data from Florida Realtors shows the Florida housing market had more than 528,000 existing home sales (all types), up 19% year over year. other – resulting in a total dollar volume of approximately $241 billion – despite the COVID-19 pandemic.
“In terms of sales, 2021 could also be called ‘the year of the condo,'” O’Connor said. “More than 160,000 existing homes in the condo and townhouse category sold in 2021, marking an increase of more than 34% over the 2020 total. In contrast, the more than 350,000 sales in the single-family home category, although more than double in number, only represented an increase of about 13%, year over year.
The lack of inventory impacted the housing market across the state during the year. “We had our hopes for the inventory, but with the exception of a few months, that didn’t happen,” he said. “We started the year with a 1.6 month supply of existing single family homes, but ended 2021 with a 1 month supply; and in many of your local markets it is only half a month’s supply. For years, Florida had more existing condos than single-family homes, but at the end of the year, existing condos and townhouses fell to a 1.3 month supply, which is very close. of the single-family category.
Dr. Jessica Lautz, NAR Vice President of Demographic and Behavioral Information:
The median age of a first-time home buyer is 33, the same age for several years, Lautz said, noting that NAR research found first-time buyers typically fall in the age bracket. age restriction from 28 to 33 years old.
“However, the age of the typical regular shopper has increased significantly,” she said. “The median age of repeat buyers is 56, and some may be considering downsizing, which may add to competition for first-time buyers.”
At the start of the pandemic, there was a rapid increase in the number of multi-generational shoppers as older parents came to live with their adult children and families, who may also have been of school age. college or older kids have come home, according to Lautz. It has since stabilized at around 11%.
Asked about research on buyers and sellers working with real estate brokers and agents, Lautz noted that “using an agent is trustworthy.”
“People are embracing technology and using it with real estate professionals,” she said. “Agent utilization is extremely high now; 87% of buyers today work with real estate agents, and the youngest buyers use agents with the highest rates. For sellers, 90% use an agent, and they work with someone who will be a one-stop-shop for them with a wide range of expertise, who will take care of everything. »
She added that FSBOs (For Sale By Owner) are at historic lows at just 7% today.
And finally, real estate is seen as “a haven” and attracts people seeking flexibility and independence — especially more women, according to Lautz.
“We are seeing this wave of more real estate agents entering NAR membership (1.5 million) than ever before,” she explained. “And we are seeing more female agents and brokers; it’s a pretty drastic change from 1978 to today.