In February 2021, the average sale price for a single-family residence sold in Florida saw the largest year-over-year increase since 2014. Why? Before the pandemic, the largest spike in real estate prices was back in 2014, right after the 2008 housing bubble. Interestingly enough, this past February we saw home prices rise at the fastest pace since then. The high influx of people working remotely and all-time low rates had a true correlation to the surge. With the ability to work remotely, people are escaping from states spurred by high taxes & migrating to the Sunshine State.
According to Florida Realtors, single-family home prices increased by an outstanding 15.7% compared to February 2020. One of the driving causes of the price gain was the desire for more space from those fortunate enough to have the option to work remotely. Around a quarter of workers in the U.S. work remotely due to COVID-19, as well as children enrolled in virtual school creating a demand for more space.
Here is an example. If you bought a home in February of 2020 and you paid $250,000, today that home would be roughly worth $290,000. That is nearly a $40,000 increase in equity in just one year!
The most interesting part is that it doesn’t seem to be slowing down any time soon. “Record-low inventory is continuing to put pressure on home prices to rise and creates challenges for buyers. While rising rates could potentially slow the pace of home sales, rates remain relatively low by historical standards.” said 2021 Florida Realtors President Cheryl Lambert. In other words, what’s keeping the rise from slowing down is the record-low inventory as well as low rates in comparison to 2019. Americans are extremely reluctant to sell their homes due to the Pandemic, ironically enough. Having random people walking around your living room doesn’t seem like a great idea considering the global pandemic we’re in the middle of. Nevertheless, homes are more often than not selling over the asking price and in multiple offer situations. So having qualified buyers tour your home might turn out to be an investment, as you have the opportunity to squeeze every bit of equity from your home.
To conclude, home prices in Florida are at their peak, and they don’t seem to have any intention of slowing. Nobody knows what the future holds, don’t wait too long and regret the fact that you didn’t get in the market in time to maximize your returns. Consult with an agent so they can give you the guidance you’ll need to succeed in today’s market and make an educated decision, it might just be the best decision you’ve made yet.