Real Estate Market Forecast in South Florida for 2023
Changes in the processes in the real estate markets are associated with the influence of many factors.
If we make a forecast of the movement in the real estate market in the United States, then in 2023, in general, we can talk about a decrease in the number of transactions in areas with increased investment volumes resulting from the COVID-19 pandemic.
In locations where the tourism industry is historically developed and the population density is high, this slowdown will be less sensitive.
Speaking about Florida, namely, South Florida (Miami, Fort Lauderdale and others), in the near future, a drop in real estate prices is not expected, since over the past few years, 70% of transactions in South Florida were made by local residents, the rest fell to investors.
Conversely, on the west coast of Florida, a decrease in investment interests will affect a growth in the number of inventory and a slight decline in the cost of housing, since investors have traditionally been the main investors in the real estate sector in this area. This trend is observed in many places.
If we take megacities and such active cities as Los Angeles, Chicago, New York, Boston, then people constantly continue to buy or sell real estate.
However, changes are already being traced in those industries that support and influence the real estate market.
In the near future, those who want to change their housing will spend their main savings on an initial payment, because renovation or major repairs will require significant financial injections. In this regard, the trends of falling demand for construction services will be noticeable. In this situation, it becomes impractical to build new facilities. Obviously, only the advantageous location of the future object will be the reason for making a decision to start developing the project. Against this background, many sellers and investors of already built real estate have refocused on renting it out.
Vera Realty, having the above advantages, expects positive prospects associated with construction projects in the new 2023
As for the forecasts for 2023 in the financial sector, the shocks that are inevitable due to the dismissal of people in a number of industries, such as in the IT sector, will be accompanied by the appearance of real estate at auctions in some locations due to the inability to pay high loans.
There will also be a noticeable decrease in activity in the commercial real estate sector in remote areas where there is an outflow of investors and new commercial premises will not be required.
In the last days of December 2022, the Federal Reserve raised the rate by 0.5 percent, and in the new year, most likely, we can expect its further rise, which will affect the demand for real estate. Loans will approach 8%, which is quite high for the US.
A positive fact is that inflation should slow down, which will also affect the real estate market. There will be 'a waiting period', that is, in the first two quarters of 2023, changes in the market will be sluggish.
Further, everything will depend on political stability, changes in the economy and financial markets, possible outbreaks of epidemiological diseases, as these unpredictable factors can change the direction of development of real estate markets.
For example, companies that inflated their staff during the pandemic are already “shrinking”, or companies, that bought real estate at high prices and are now unable to cope with its maintenance, are going bankrupt.
The positive thing is that there are always segments of real estate that will be in price, such as “canal houses” in Florida and certain tourist areas in this state that people are eager to move to.
Falling interest in the stock market in a number of industries makes investing in real estate in 2023 more promising.
However, not any objects are profitable for investment. Good opportunities for objects with a subsequent increase in value. If you bought a house without repair, then by updating the object, you can always sell it profitably.