Alaina Phillips The Mortgage Expert,
Publish On: April 14, 2024
A panel of real estate experts announced the Florida housing market is expected to appreciate in the double digits in 2022 at their annual meeting at the National Association of Real Estate Editors. Thousands of Americans migrated to Florida in 2021 due to the lenient coronavirus restrictions with no vaccine mandates, the exploding economy, no state income taxes, and dozens of other benefits.
The massive migration to Florida is expected to continue in 2023 and 2024. The state’s government policies on people’s rights of no control attract Americans of all age groups to call Florida home, flee their current state, and move to Florida. There was never a state shutdown order, mask and vaccine mandates, or school shutdown in Florida.
Florida Housing Market Forecasted To Be Bullish in 2023
Undoubtedly, the demand for homes in Florida far surpasses the inventory of homes. Homebuilders in Florida can barely keep up with new home purchase orders. Florida home builders are thriving with historic record sales and revenues. Florida’s housing market for homebuyers continues to remain competitive, says Ronda Butts, a dually licensed realtor and loan officer at Gustan Cho Associates.
The housing market forecast are unlike the Florida housing market forecast for the rest of the country, which may be good news for homebuyers. The housing market for the rest of the United States is stabilizing and cooling off.
The History of The Florida Housing Market
The housing market in Florida has been hot from the late 1990s until 2008. Then the Florida Housing Market crashed and crashed hard. However, the Housing Market has been recovering strongly year after year with no sign of a correction. A veteran loan officer, John Strange, says common sense dictates we should have another housing market correction like 2008. John Strange says:
With new mortgage regulations implemented on government and conventional loans, the demand for the Housing Market is expected to be stronger than ever in the year 2021 throughout the state of Florida.
Due to high home prices, both the FHFA and HUD have increased loan limits for the past seven years. Many experts and economists expected the Florida Housing Market to cool off due to historic high rates. Not so fast. The Florida housing market is like a runaway train. It keeps on going up. This article will discuss and cover the Florida housing market for homebuyers, investors, and renters.
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The Nation’s Housing Boom Has Lenders Scrambling
The country’s housing boom and skyrocketing home prices were causing havoc in the housing market. There was no stability in the housing versus mortgage markets. Mortgage companies were lobbying FHA, VA, Fannie Mae, and Freddie Mac for higher loan limits. HUD and the Federal Housing Finance Agency have increased the FHA and Conforming loan limits for the past seven years.
Non-QM lenders were thriving due to the non-QM and alternative mortgage loan programs they were offering BUT due to double digit interest rates and discount points, many borrowers are priced out of the non-QM mortgage markets.
Gustan Cho Associates launched no-doc home loans for primary homes. This means no documentation and stated income loan programs are back since the 2008 financial crisis completely shut down no-doc mortgages. However, many would-be homebuyers are now priced out of the Florida housing market for a home purchase due to high rates. Many are and will be stuck renting. However, rents are skyrocketing year after year.
Buying Homes Over The List Continues To Become The Norm
Many pre-approved home buyers were priced out of the housing market. 30% of the pre-approved homebuyers who were pre-approved since February and March 2020 could not find a home where their offer was accepted and are still looking. Real estate offers over the list price was the norm in 2021. VA loans do not have a maximum loan limit.
Days of homes selling over 10% to 30% higher than list price are far gone. The minute a home was listed, you had dozens of potential buyers waiting to see the home on the first day and was under contract that evening.
Despite mortgage rates heading towards 7%, sellers are getting multiple offers on their homes. Most listed homes had an average of five purchase offers. Homes sold an average of 7% of the list price. The recent high inflation numbers will raise interest rates. Homebuyers and homeowners scramble to qualify for a mortgage to take advantage of historic record rates before it starts climbing.
HUD And FHFA Increases Loan Limits For Due To Rising Home Prices
The Federal Housing Finance Agency (FHFA) has increased conforming loan limits on conventional loans to $766,550 effective January 1st, 2024. Conforming loan limits for 2023 was capped at $726,200. The 2022 conforming loan limit was a $100,000 increase from 2021 of $547,250. Ronda Butts of Gustan Cho Associates is concerned about home prices skyrocketing where many homebuyers are no longer able to afford homes:
Many homebuyers in Florida are getting priced out of the housing market and are afraid they can not purchase a house. However, rental prices is getting higher and higher.
Conforming loan limits in 2024 were again increased to $766,550 in traditional counties and $1,149,850 in high-cost counties throughout the United States. HUD has increased FHA Loan Limits for 2022 to $422,680, effective January 1st, 2022. Again, the 2022 FHA loan limit of $422,680 was almost a $100,000 increase from the 2021 FHA loan limit of $356,362. HUD again increased FHA loan limits to $472,030 in median-priced counties and $1,089,300 in high-cost counties in the United States on single-family homes for 2023.
High-Balance Loans In High-Cost Counties In The United States
High-Balance FHA and conforming loans in high-cost areas in the country have now increased their ceiling from $1,089.300 to $1,149,850 on single-family homes for both high-cost FHA and conventional loans.
Dale Elenteny of Gustan Cho Associates is experiencing many of his borrowers still having difficulty buying a home despite the increase in loan limits. The United States Department of Veterans Affairs does not have a maximum loan limit on VA loans.
Both HUD and the FHFA are fully aware of housing being in demand versus the inventory of homes and realize homebuyers were being priced out of the housing market.
Home prices were increasing double digits year after year. Some states like Florida have home prices increasing at record levels. It was like today’s stock market, where the Dow Jones Industrial Average reached 36,000. A large percentage of homeowners had second and investment homes, and there were many Floridians who turned part-time real estate investors where they purchased and sold homes. Most of them made great money.
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Fall Of Florida Housing Market In The 2008 Financial Crisis
The Florida Housing Market was at an all-time high back in 2008. There were building homes on almost every block in all parts of Florida. Then comes 2008. The housing market crashes, and when it does, it crashes hard!!! Alex Carlucci a senior loan officer at Gustan Cho Associates, shares his thought on the skyrocketing home price aftermath during the 2008 financial crisis:
Thousands faced foreclosures, and thousands lost most of the equity in their homes. A large percentage of homeowners were sitting on homes with mortgage balances that were higher than the value of their homes.
The Florida housing market tanked after the 2008 financial crisis. Many think the Florida housing market will plummet. But no signs of any correction despite the surge in rates and soaring inflation. After the 2008 financial crisis, housing sales started picking up. When it does, it surges like today’s Dow Jones Average with no correction and no sight of a correction. It is common sense that housing prices should drop. What is up?
The Bullish Housing Market Versus Home Prices
Homes are selling above list prices. There are multiple offers on the same property. Many homes are selling on the same day. My borrowers were asking me for multiple pre-approvals because the offer they placed, they lost to a higher bidder. Alex Carlucci of Gustan Cho Associates shares his opinion on the skyrocketing Florida housing market:
Never seen anything like this before in my 20-plus years as a real estate investor. Then when mortgage rates spiked more than 3.0% in mid-2020, the housing market somewhat tapered off and seemed to have stabilized. Has it?
Mortgage rates reached a historical low in May 2021, where 30-year fixed conforming rates bottomed at 2.62% for prime borrowers. However, with spiking inflation numbers, rates are creeping up and are expected to increase substantially in months to come. Today mortgage rates have crossed the 7% rate with no sign of a correction.
General Overview Of Florida Housing Market Versus Other States
The Florida housing market is on steroids compared to the general overall housing market nationwide. Florida is the ultimate premium state most people think of moving think of. Florida’s economy has always been strong in general. One of the main reasons movers choose Florida is due to its strong economy and phenomenal job opportunities.
The state is leading the state by example. Under the leadership of Republicans, the state is growing economically, fundamentally, and socially. Florida is one of the states with no state income taxes.
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Why Movers Choose Florida As The State of Choice
The state has a lower cost of living, low property taxes, affordable housing, great schools, world-class beaches, warm weather 12 months of the year, countless places to visit, lower than other states in regulations and coronavirus restrictions, and the best place for Americans to retire. The Florida housing market is strong and will continue to grow. It is one of the best places to invest in housing and investment real estate properties. Most mortgage companies aggressively target the Florida housing market more than others.
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Florida Home Prices Continue Rising, But Homes Are Still Affordable
There were areas in Florida, such as Orange County, where housing prices were appreciating at almost 2% a month in early 2020. This appreciation rate continued until mid-2020 when mortgage rates jumped 1.0% in a few weeks. R
Housing prices have slowed since then, and competition is less rampant than before. The Orlando area was one of the first areas where the Florida housing market has recovered.
Many international home buyers and investors started buying in Orlando rather than other parts of Florida. Today’s new non-QM and alternative and specialty mortgage loan programs enable more fuel for the Florida housing market by adding more first-time homebuyers and real estate investors to the Florida housing demand.
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The Strong Booming Florida Economy Attracting Migrants From Other States
Southwest Florida expects growth in its population from 2% to 4%, which means demand for housing and appreciation of housing values due to demand. Florida’s Panhandle has been behind in housing value increases. But it is expected to steadily continue to appreciate due to lower real estate values than the rest of the state. One of the major reasons for the slowness of housing appreciation is their lack of economic growth and jobs. Florida’s Panhandle’s biggest financial industry is the tourism industry.
Florida Housing Market Outlook
Nobody has a crystal ball and can predict the Florida housing market, but how it seems. It looks like the Florida Housing Market has stabilized, and a housing bubble burst does not seem likely shortly. Things looked scary in early 2021 when the Florida housing market was on fire. It seems like it was a wildfire that was totally out of control.
Thankfully, it has stabilized, and home builders seem to be building new homes, unlike in the pre-2008 hay days. The FHFA and HUD saw that housing values throughout Florida have been skyrocketing and had to increase conforming and FHA Loan Limits.
Get Approved With Government, Conventional, or Non-QM Specialty Mortgage Loans
Florida Home Buyers who want to take advantage of the growing Florida Housing Market and need to qualify with a national direct lender with no mortgage lender overlays on government and conventional loans, please get in touch with us at Gustan Cho Associates at 800-900-8569 or text us for a faster response. Or email us at gcho@gustancho.com.
We have a big presence in the Florida Housing Market. The team at Gustan Cho Associates is available seven days a week, evenings, weekends, and holidays. Gustan Cho Associates are mortgage bankers, correspondent lenders, and mortgage brokers.
The Launch Of No-Doc Loans And Non-QM Loan Programs
No-doc mortgages were the most popular mortgage loan program before the 2008 real estate and financial meltdown. Subprime and alternative mortgage lenders close their doors, and no-doc loans are discontinued. Financial experts and economists said no-doc loans would never return. That turned out to be misinformation.
Gustan Cho Associates offer no-doc mortgages with a 20% down payment and credit scores down to 500 FICO. More and more mortgage loan programs that were popular before the 2008 financial crisis have returned to today’s housing market, fueling the already strong housing market.
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This guide will cover the Florida housing market for homebuyers and renters. Are you looking for a place to rent in South Florida? You’re not alone. South Florida is one of the most popular places to live in the country, and with its warm climate, beautiful communities, and stunning beaches, it’s no wonder why.
With its popularity comes a higher cost of living. South Florida recently experienced the highest rent increase in the country, making it more difficult for renters to find a place that fits their budget due to its expanding population.
In the past year, South Florida has seen some of the most dramatic rent increases in the country. According to the latest data from realtor.com, the median rent in the tri-county area skyrocketed an incredible 57% from March 2022 to March 2023. That’s the highest rent increase out of the 50 metro areas analysts studied, making South Florida’s median rent even pricier than New York City! Wow! Fortunately, many ways exist to find the best rental deals in South Florida.
Pros and Cons of Renting in South Florida
Renting in South Florida has its advantages and disadvantages. On the plus side, you’ll enjoy the beautiful weather, nightlife, beaches, and various cultural activities and attractions. Even though renting can still be expensive, there are still some things to consider, like the cost of utilities possibly being covered by a renter or the HOA. This could be a great benefit when it comes to renting.
Plus, when renting anywhere, it is nice to take into consideration that if you do decide to move in the future, it’s much easier to do so when you’re renting than as opposed to planting roots somewhere. On the other hand, unfortunately, the cost of living is higher in South Florida than in other parts of the country, and the prices of rental properties have skyrocketed lately.
Tips for Finding the Best Rental Deals
If you’re looking for the best rental deals in South Florida, there are a few tips to remember. First, you have to start your search early. Being quick to start looking, you’ll have a much better chance of finding the gem you’re looking for. If you use a local realtor, part of their expertise is to help you stay on top of the market and what is available.
You should also research the market to understand better what’s available and the price you should expect to pay; of course, contacting a local realtor is always helpful. A realtor has experiential knowledge that can be very helpful.
Consider looking for rental properties in areas that are less popular. Not every rental is listed on a website, so I don’t think cruising around South Florida wastes time. These areas may not be as glamorous, but they can often offer better deals. Finally, be open to finding the right realtor to negotiate and find the best home for you. Don’t be intimidated to ask for a better price or other concessions from the landlord.
Researching the Market and Finding the Best Deals
Research is an advantage when searching for the best rental deals in South Florida. Start by looking online for rental listings. This will prepare you and help you determine and get a feel for the market and how much you should expect to pay. You can also use websites like Zillow, Realtor.com, and Trulia to compare rental prices in different areas.
You can check out local newspapers and classifieds for listings. Don’t forget to ask around for a local rental agent. Word of mouth is a smart way to discover amazing agents and deals that aren’t advertised.
Rentals in the market would be a wonderful home for you and your family. Finding a local rental agency is a great way to get trusted information about the area of South Florida. They can help make this work a lot easier for you.
Negotiating Rental Prices to Receive the Best Deal
Once you’ve found a rental property you’re interested in, it’s time to negotiate. Don’t hesitate to ask for a lower price or other concessions from the landlord. Be prepared to make a case (or your realtor can help you with this) for why you should have a better deal. It’s wise to know exactly what you’ll be renting and the market conditions at that time.
If the landlord is unwilling to change the price, see if they’ll give you a better deal on security deposits or pet fees. You can even negotiate nonmonetary concessions if they don’t want to discount the price. Negotiation can also take place a few months after renting.
Making Sure the Rental Agreement is Fair and Thorough
Once you’ve agreed on a price, make sure the rental agreement is fair and includes all amenities, terms, or even concessions that have been agreed upon. Be sure to read through the lease carefully and be sure you understand all of it. Pay special attention to any wording that could be used to raise the rent or evict you.
Don’t hesitate to ask your realtor or the landlord if you see something that raises questions or concerns. That is part of your realtor’s or lawyer’s job to help you understand important paperwork while searching and applying for rentals.
It could be wise to have a lawyer review the rental agreement. Finding the best rental in South Florida that fits your budget could be challenging, but it shouldn’t be impossible. With diligent research and negotiation skills, you can find a suitable place for rent that matches your budget.
How To Get The Best Rent During Booming Florida Housing Market
Just remember to start your search early, research the market (know the area), and be open to looking for deals in less popular and familiar areas, and if the opportunity presents itself, don’t be afraid to negotiate. Ensure the rental agreement is fair and thorough before signing anything. Lastly, I believe it’s necessary to add that there are wonderful experienced realtors in the rental market who would love to help you with all of these steps discussed in this article.
Gustan Cho Associates: One-Stop Mortgage Lending Shop
Gustan Cho Associates is known for its no-lender overlays on government and conventional loan business models. The great news is Gustan Cho Associates is living up to its reputation as a one-stop mortgage lending shop. Gustan Cho Associates has dually licensed realtor and loan officer associates to help homebuyers and renters get the best deal and realize a net tangible benefit on their home purchase or rental, advises Ronda Butts:
Over 80% of our borrowers at Gustan Cho Associates could not qualify at other mortgage companies due to lender overlays, last-minute loan denial, or the other lender not offering a loan program the borrower needs.
Gustan Cho Associates has dozens of lending partnerships with wholesale non-QM and alternative specialty financial institutions. Some of our non-QM specialty mortgage loan programs are no-doc mortgages, 12-month bank statements mortgages for self-employed borrowers, 90% LTV jumbo loans, non-QM jumbo loans with credit scores down to 500 FICO, P and L stated income mortgage loans, asset-depletion mortgages, and dozens of other mortgage loan programs for owner-occupant home mortgages, second homes, and investment properties.
FAQ: Florida Housing Market For Homebuyers and Renters
1. What is the expected growth trend for the Florida housing market in 2023? The Florida housing market is forecasted to be bullish in 2023, with double-digit appreciation expected due to high demand and limited inventory.
2. Why are many Americans moving to Florida? Thousands of Americans moved to Florida in 2021. The trend continues due to the state’s lenient COVID-19 restrictions, lack of state income tax, and a booming economy, among other benefits.
3. What challenges are homebuyers facing in Florida? Despite the appeal, homebuyers are encountering high competition with homes selling above list price, skyrocketing home prices, and rent, making it difficult for many to afford housing.
4. How are home prices compared to other states? Florida home prices are increasing significantly faster than in many other states, with some areas seeing monthly appreciation rates as high as 2%.
5. What are the current trends in rent prices in Florida? Rising rental rates are becoming a significant concern, particularly in South Florida, where they are among the highest in the country. As a result, finding affordable rental options has become increasingly difficult for tenants.
6. How have loan limits changed due to rising home prices? Agencies like FHFA and HUD have consecutively raised the FHA and conformed loan limits for several consecutive years to accommodate the higher home prices in Florida and other regions.
7. What are the implications of high mortgage rates for Florida’s housing market? The Florida market is still a seller’s market, even though mortgage rates are rising and nearing 7%. Properties are receiving multiple offers and are being sold above the asking price.
8. What historical trends influence the current Florida housing market? The market has seen rapid growth since recovering from a significant crash in 2008, with no signs of a forthcoming correction despite the high rates and inflation.
9. How is the Florida economy impacting the housing market? The strong state economy and job opportunities continue to attract new residents, fueling demand for housing and further driving up prices.
10. What mortgage options are available for prospective homebuyers in Florida? Gustan Cho Associates offers various mortgage programs, including no-doc home loans and non-QM loan options, to help more buyers enter the market.
11. How can renters find affordable housing in Florida’s competitive market? Renters are advised to start their search early, consider less popular areas for better deals, and negotiate terms with landlords to secure affordable housing.
12. What should potential movers know about the current state of Florida’s housing market? Movers should know the high demand and competition, especially in popular areas like South Florida. They may need to explore various financing options to compete effectively.
