Housing Market Trends 2022 And Insights For Naples Florida Property Management
Property management professionals in Naples, Florida, agree with the overall prediction that housing markets throughout the nation will slow down in the final quarter of 2022. Even though most markets are already skewed in favor of buyers, the record-high mortgage rates are still a big problem. Their only hope is to hold on and wait for home supplies to increase, putting more pressure on sellers to reduce home prices.
With mortgage rates skyrocketing, home sales dwindling, and supplies improving, this article is primarily based on the latest property market trends, as seen in September 2022. Recent market reports reveal that the current average 30-year fixed mortgage rate is over 7%, up from about 3% at the start of the year, making it one of the most expensive housing markets in history.
If this continues to happen, even at a slower rate in the coming months, demand might completely crash this quarter, whereas home prices will keep growing on a year-over-year basis. Note that the housing market has been a boon for sellers during the pandemic, with home prices increasing in the mid-single digits throughout the epidemic.
But most housing markets throughout the U.S. are in the “correction” phase, thanks to the high rates and a looming national recession that have cooled most of them dramatically. However, experts caution that we should prepare for further increases in interest rates and a decrease in sales over the last quarter of 2022.
But this is not to say that housing markets will crash as the year progresses. This is because the current property market is not driven by overly leveraged homeowners, subprime mortgages, or lax lending rules. Instead, home price appreciation is backed by fundamental drivers stemming from a relative deficiency in supply. With more millennials approaching their prime home-buying age, meeting this growing demand might still be challenging even in the coming year.
Overall, most local housing markets are recording a seasonal slowdown already due to the depressing effects of the rising mortgage rates on sales activity. This trend is expected to lead to a steeper decrease in sales than in any typical end-of-year period. Home price cuts are on an upswing, with fewer buyers interested in highly-priced units, meaning that home value might fall even further by the end of 2022.
Before we look at the latest Naples, Florida, property management statistics, here is a quick synthesis to give you a gist of what to expect.
South Florida Housing Market Trends 2022: Will it Crash?
The Florida property market had higher median home prices, more new listings, and fewer supply constraints in the first two quarters of 2022 compared to those in 2021. That is according to the latest market data released by Florida Realtors®, which also highlights inflation and higher mortgage rates as the main factors impacting sales.
By mid-quarter three, total closed sales of single-family units throughout the state were 24,877, a 15.8% down from the passing year, according to reports released by the Florida Realtors Research Department in conjunction with local Realtor associations. The median sales price for this home type averaged $407,000, a year-over-year increase of more than 15%.
The average sales price (total overall sales divided by the number of actual sales) reported in August was $555,148, recording a year-over-year increase of 11.9%. Noting that the median rate of the original list price received throughout the month was 98.5%, the sum of all closed sales was $13.8 billion, a 5.8% year-over-year decline. Inventory supplies throughout Florida in August was 2.4 months, marking a year-over-year increase of 84.6%. These are the foremost powerful predictors that often dictate property management companies’ strength in the market and are of particular interest to property managers, home investors, and real estate analysts.
More data from the Shimberg Center for Housing Studies at the University of Florida reveals that home prices in most local municipalities in Miami-Dade County that are popular with new arrivals are experiencing historic levels not seen since the housing boom in the mid-2000s. This refers to a period where intense housing speculation forced millions into foreclosure right after the Great Recession.
Although supply chain bottlenecks, current inflation, and new interest in South Florida’s real estate market are adding more gasoline to the fire, home affordability remains a big problem. Even as rent increments are quickly becoming a norm, it would have helped if the disparity between home prices and incomes would too. But it is not.
The Case for Southwest Florida
According to researchers at Florida International University and Florida Atlantic University, the Southwest Florida housing market is one of the country’s most overvalued real estate markets despite still dealing with recent destructions from Hurricane Ian.
One of its regional housing markets covering the Cape Coral metropolitan area currently sells at the most significant premium. By the end of August, buyers in this area paid an average of 68.69% more than the usual pricing trend. The average home price in this local housing market is $427,045while it should be around $253,152, based on statistical price modeling of past sales in the previous years.
Boise, the reigning champion of most overvalued metros since the beginning of the research last year, came second with an average premium of 62.66% above its long-term pricing trend.
In the end, Florida had up to five metros ranked in the top ten most overvalued housing markets based on percent over pricing trends this year. These included Tampa at No. 9 (57.37%), Lakeland at No. 7 (58.04%), Deltona Beach at No. 5 (58.27%), Palm Bay at No. 2 (59.73%), and Cape Coral at No. 1 (68.69%).
Complete rankings can be found here. It is a comprehensive study that uses open-source data to research local housing markets’ long-term pricing trends dating from 1996, with data covering all major house types.
From its findings, it is evident that the main drivers of high home prices throughout the state of Florida are a mix of solid demand and a lack of new home supply. Despite the constant threats from storms and hurricanes, Sunshine state remains one of the most popular destinations in the nation, all thanks to the warm climate and business-friendly environment.
The only sad thing is that home prices might continue to soar, especially now when dealing with widespread destruction after Hurricane Ian. This resulted in numerous damaged properties, meaning the Southwest Florida housing market has had to deal with an increased shortage of homes for sale through this last quarter.
Therefore, any property in a sell-worthy condition will be much more valuable moving forward.
A different report analyzing price-to-rent ratios suggests that the higher the ratio, the more it favors renting over owning. But on average. This means that it would be normal to expect home prices to start falling in markets with very high price-to-rent ratios. In contrast, those with lower ratios will remain steady.
McAllen, Texas, currently tops the list with the nation’s highest price-to-rent ratio of 23.33%, while Jacksonville is the first market from Florida at number 10 with 18.10%. As one of the best property management companies in Naples, Fl, renting seems to overpower buying in most housing markets in the U.S. today.
So, SW property management professionals should expect lower ratios to fair much better in the looming housing downturn.
Implications and Insights for Naples Florida Property Management
According to the latest data from the Naples Area Board of REALTORS® (NABOR), signs of a more balanced housing market persist throughout Naples.
After a long spell of sky-high home prices and plummeting inventories, homebuyers throughout the nation have been waiting a long time for some relief. However, the subsequent rise in borrowing costs forces them to re-evaluate their purchasing power to stay afloat.
According to the Naples, Fl, housing market trend report for September, the impact of Hurricane Ian was indeed significant. Still, its full scope was limited to specific areas along the coastlines and tributaries. Besides that, property managers Naples and broker analysts are confident that the resiliency of the city’s home values will be protected, enabling it to recover swiftly.
Captured activity before the storm’s arrival points towards a balanced housing market with buyers having more choices, which helped ease competition. Inventory jumped 54.7% compared to the same time a year ago, whereas total pending sales dipped 42.9% year-over-year.
The median closed price capped at $555,000, a 21.8% rise from $455,500 in September 2021. The report further highlights a predictable pattern of slow sales (for both pending and closed sales) and a slight increase in inventory.
As the market stabilizes, sellers will no longer be getting 100% of their asking price. The average days on the market increased by 66.7% to 40 days compared to 24 days in 2021. With the holiday season expected to be typically quiet, home prices will probably flatten out, but the days on the market will keep increasing. Note that this does not mean the Naples Fl housing market will crash. It is correcting itself.
Another recent report from the National Association of Realtors indicates that home prices remained at a year-over-year high, even as the surging borrowing rates continued to make housing less affordable. In September, the median closed price of an existing unit was $384,800, up 8.4% from a year ago.
Despite marking the longest-running streak in real estate history, this was the third consecutive month that the median sales price retracted from the historic $413,800 record in June. A typical seasonal trend in prices often declines after peaking in early summer, meaning prices usually dip between July and August. This explains why this year’s reduction was a little more dramatic than typical, suggesting a higher chance for the market to experience a considerable slowdown in the coming year.
Even as home prices continue to be supported by limited supply, at the start of this last quarter, the number of homes for sale was 1.25 million nationwide, a year-over-year decline of 0.8%. This accounts for at most three months of supply from the previous quarter.
Note that overall growth resulted from an 11.8% increase in home prices in the South. The other regions recorded 6% to 8.5% home price growth levels. But sales are projected to continue being more robust in high-end segments of the market, which have more substantial supplies.
Need Professional Help?
Homeownership is exciting but can be very daunting, especially when managing your properties. Unfortunately, not all property management companies Naples understand this or are designed to help you successfully optimize your current project management Naples, Fl.
Ranked as one of the ideal destinations for businesses and people in the U.S., the Naples real estate features varied home collections suitable for nearly every stage in life. These mainly include; Single-family homes, Condos, Townhouses, and even Grand Estates Custom homes.
The Naples property market has something for anyone looking for their next home in Florida. As one of the best property management companies in Naples, Fl, Woodruff Property Management is ready to help you with any concerns regarding rental property management in Naples, Florida.
Our firm belief in personalization makes us different from the other rental companies in Naples, Fl. That is why we always strive to coin all our processes around all your personal needs. As for your property, we have a team of highly experienced property management professionals in Naples, Fl who will handle your property just like you would.
Check our core values, mission, client reviews, and guaranteed promises here.
With mortgage rates rising sharply at record speeds, house and rent prices fluctuating day and night, and people still migrating to the South, we can help you navigate the unpredictable property market with great ease. This article is designed to give you an inside look at current housing market trends with a detailed analysis of Naples, Fl.
Should you need any help, please send us an email at email@example.com or drop us a call at (239) 920 8799.
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