Disclosure: This article is not financial, real estate, legal or professional advice of any kind. If you want professional advice, you can get that by entering into an agreement with a qualified advisor.
Q) Is Now the Time to Buy Real Estate in Florida?
A) No, In My Opinion It is Not a Good Time to Buy a Home in Florida. Why?
- Because it’s still a seller’s market, so buyers are paying more than they need to.
- Prices may not be going much higher for much longer.
- Florida homes will likely be selling at a huge discount again in the not too distant future.
Allow me to explain these 3 reasons further…
#1) It’s Still a seller’s market in most of of Florida.
Buying a Home in Florida for far more than what it is listed for, or paying far more than what the appraisal says it’s worth, is never a good idea!
The only possible exception to that rule is…
1) If the home has exceptional, one of a kind views, water access, location or hopefully every one of those advantages.
and
2) You the buyer are only using a small fraction of your net worth to pay the $10,000,000 cost, it will be only be one of the five homes you own, and when the value drops 50% you can wait for years until the value rises again to sell it.
However, if the Florida home you are thinking of buying is similar to all the other homes in the neighborhood, parting with all your cash, or worse yet, going far into debt to overpay for a home in a hot sellers market in a transient state, is never a good thing.
Unless you’re a fan of buying high and selling low, I wouldn’t buy a home in Florida now or recommend that to any of my family or friends. Buying a home in seller’s market should be avoided if at all possible, even in non-transient states, but especially in transient Florida’s yoyo real estate market.
During the last recession Florida home values dropped as much as 60%. Did you buy a house in Florida during the last seller’s market in 2006 for $250,00? Congratulations, that home would only be worth about $100,00 in 2009, if you could find a buyer, but chances are you couldn’t. That’s why Florida became the foreclosure leader in the US for years.
Thousands of people quit Florida every week, and have for decades. After the last recession, prices dropped so far, sellers just moved out of Florida and left their impossible to sell, underwater home behind to go into foreclosure.
Buying a home in a seller’s market wouldn’t be the worst thing in the world to do in most other US states because home prices usually just stall or decrease slightly during troubled economic times.
However, in a highly transient state like Florida (where lots of people move in looking for paradise and then move out after the FL honeymoon is over) that has a real estate market that rises and falls like a yo-yo, it can cost you a lot of money if you buy in a seller’s market. Most people moving to Florida believe they will enjoy living in the state far longer than what actually happens, but studies show that for a high percentage of people, that’s not what happens.
Paying a high price for a home in a seller’s market, increases the odds that you will buy high and sell low. Over 10 million people (and growing every day) have moved to Florida only to move out later. If you buy an overpriced Florida home at the top of the market and then find you can no longer live in the state, and Florida home prices have tanked, you could end up like so many people have before, with a home worth far less than you payed.
Besides, if you’re going to buy a home in Florida, why not do it when it’s a buyer’s market. Why not buy when everyone is selling in Florida at reduced prices up to 50% off or more and there are tons of homes to chose from? That’s far different than what you see in the market today.
#2 At Some Point in the Not to Distant Future, Florida Home Prices will Stagnate Then Drop
I wouldn’t rush into buying a home out of fear that because someone trying to sell you something told you home prices will just be higher next year or in 5 years. This is what buyers were told in 2005 and 2006, right before the last time a real estate price bubble popped and home prices crashed in Florida.
Recent home buyers have been able to go far deeper in debt and buy far more expensive homes that ever before, with just the same income. This means that lenders, investors or someone is going to take a potentially larger loss on every home that goes into foreclosure. Black Knight, a premier provider of data and analytics to mortgage lenders said that another 723,000 more homeowners became delinquent on their mortgages in May 2020 alone. More homeowners are behind on payments now than at any time in the last 9 years. Guess which state is now in the top 5 with the highest delinquency rate?
#3 There Will be Another Fantastic Time to Buy a Home in Florida
Here’s Why it’s Still a Good Time to Sell, But Not a Good Time to Buy, and Why That’s Changing…
- During good economic times, lots of people move to Florida. All of that recent stimulus money pumped into the economy like never before, created good times and many moved to Florida as usual. However, those good times were like an artificially created sugar buzz that’s coming to an end and it doesn’t look like it will be repeated. On August 13, 2021, CNBC published a story about a consumer sentiment survey titled “Consumer sentiment measure falls to pandemic-era low, sees one of largest drops on record”. During challenging times, the number of people moving to Florida drops, but the number of people moving out increases.
- People moved to Florida because it was “open” when in many other states things were shut down. However, now things are generally open in most states and it’s hard to find a news outlet that doesn’t have a story or two about the high number of covid cases in Florida currently.
- Many visited Florida last winter when the weather in the state was fantastic, so they moved there. Now they’re learning that most of the time it’s not like that. And yea, now a hurricane hit another state, but it could have been Florida. So all those people who have moved to Florida because of a wonderful visit are starting to learn how different living there really is.
- Many companies allowed employees to work from anywhere if their job could be done remotely. So many moved to Florida. Now they’re learning they may have to return to the office in the future.
- Historically low interest rates allowed buyers to borrow more debt to pay higher prices. As the FED raises interest rates, which may happen sooner than we think, buyers will be approved for lower loan amounts, so they’ll have look at cheaper homes, not only in Florida but all states.
If you’re thinking of selling your Florida home now…
Sell while prices are still high and cash in your chips.
If I were one of the few brave souls who moved to Florida between 2008-2012 and bought when prices were 50% off (or more) in Florida, now would be a good time to sell and cash in your chips while you still can, if your honeymoon with living in Florida is over. Or maybe you’ve gone from loving Florida to being on the fence about staying or moving out. You’ll kick yourself if you wait until another major negative event pushes you (and everyone else) to sell, because it may be too late when Florida home prices drop like they have many times in the past.
Even people who moved to Florida only to realize it was a mistake and want to leave, find it hard to sell an asset (their home), when every day it’s worth more. So, what do they do? They wait until it becomes clear that prices have stopped going up. Unfortunately, by the time a sellers market ends in Florida and it hits the news, it’s already too late. Home prices start falling. And fast. And buyers don’t like to buy when prices are dropping every day because homes will likely be cheaper tomorrow.
When a change happens in the Florida market, sellers are often shocked they aren’t the only ones who want to sell at the top before price fall, as they see all the other homes in their neighborhood go up for sale too. This is when a flood of homes enters the market all at the same time, causing supply to balloon and prices to drop. When this happens, real estate agents start checking to see if their phones are still working because things get real quiet.
That’s when you want to be a buyer in Florida, when every day there’s more for-sale signs going up and desperate sellers drop prices constantly in an attempt to sell before all of that “bubble equity” dwindles to nothing.
If you wait to sell until the first “home prices in Florida are moderating” headline, you probably waited too long. When lots of homes start coming on the market, and price reductions become commonplace, buyers start to hold off on buying. Why? Because it’s hard to buy when there’s more new homes in their price range to look at every day, and new price reductions. Why buy today, when tomorrow it might be cheaper or a better home for less will appear?
If I was thinking of buying a home in Florida right now…
If I was someone with $100 million in cash just laying around and wanted to spend a few million of it in Florida to buy a home, I’d just do it, regardless of what market it is.
However, if my home was my greatest financial asset, or I needed a mortgage to buy, or I was retiring and was going to be living on a fixed income, should I buy at what could be the top of the market, maybe right before prices tank again? Or should I would wait for the next buyer’s market?
Of course, if you knew for sure that you were going to love living in Florida forever, you could just buy and let prices go up and down and it wouldn’t matter. Why? Because you won’t be selling your home. The only thing will matter is a higher real estate tax bill to pay when your home’s assessed value inflates along with higher insurance rates which can become a financial burden, especially if you’re on a fixed income as many retirees are.
The problem with that is everyone believes they’re going to love living in Florida forever. That’s the only reason they would take a course of action where they lose money selling their current home (real estate commission, repairs, closing costs, etc.), spend a fortune moving their stuff 1500 miles, and then spend more money including more closing costs to buy a home in Florida, somewhere they never lived before.
Unfortunately, many move to Florida only to eventually discover that it was a mistake, that requires going through the disruption and expense of yet another long distance move, to correct. This can be life altering if they bought at the top of a buyers market, and badly want to sell but it’s now a buyers market and the Florida home they no longer want is worth less that they paid.
Bottom line…
- The best time to buy a home in Florida (or anywhere) is during a buyer’s market when demand for homes is low and supply is plentiful so there’s lot of homes to choose from. It is not currently a buyer’s market in Florida.
- The best time to sell a home in Florida is when it’s a seller’s market because supply is low and prices are high, like now, and even the worst homes command top buck.
- Home prices in Florida could rise further before they fall.
- You could buy a home in Florida regardless of what prices were if it would only take a small fraction of your net worth to do so, or if you knew for sure you’ll live in Florida forever and would never want/need to sell, so price drops wouldn’t matter. However, everyone moving to Florida believes they’ll love it forever, but a higher percentage than what you’d think eventually learn it was a mistake and move out
- You could get a much better idea if living in Florida will be right for you or not by reading the Florida Move Guide. I guarantee it.
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Ron Stack “That Best Places Guy” of Zeus Press Inc.
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- Want to be certain if moving to Florida is right for you or your family? You’ll know after reading the Florida Move Guide.
I absolutely agree. I am a mortgage underwriter in the industry for 20 + years, recently relo’d here for a job. And even with rents being as outrageous as they are I can’t ignore what I am seeing and my peers agree. It’s 2005 again…so I’m renting.
Besides… I’ve no doubt of a mass layoff once things slow down even more. That’s how this lender rolls.
Great article. Refreshing. Most people do not want to hear the truth let alone speak it.
This info is so great! In looking at houses online I couldn’t figure out why there were so many foreclosures and why people bought their homes so cheap but have them listed for so much more. We could possibly be relocating due to job transfer at Cecil Field. Can you update on the market and thoughts on that area of town? Thank!
Hi, Ron,
Happy Memorial Day 2019! I see you’ve updated your “Is Now a Good Time to Buy” page for May. We’ve exchanged messages several times in the past few years, and I’ve always appreciated your advice and suggestions to wait and buy low/sell high. Also enjoyed your 2 books, too.
In addition, we’ve followed your formula to check weekly for those indicative numbers of days on market and number of listings for the area we’d like to buy and retire in 2020. I must say, those stats confirm that it’s still a sellers’ market in FL. I must admit to getting a little frustrated, due in large part to this unheard-of economic expansion. However, I’m also seeing signs of the economy slowing, despite the cheerleading from the prez and media. That makes me a bit concerned that the FED will cave and actually cut rates (although there’s not much room to do so when rates are already artificially low at 2-2.5%), and inflate this bubble even more. As you once said, all bubbles pop, and I know this one will, too, but I hope “just around the corner” means sooner than later. It’s not “different this time”, right? Thanks, Steve
Dear sir,
I run a international livery firm HQ in Chicago with offices across the globe. For some time I have been keen on moving to FL and yet have been asking real estate agents “why are their so many homes for sale?” Every one has been reluctant in answering my #1 question.
I look forward to reading your posts!
Greatly appreciated!
Foreclosures are up 23% in FL since same time last year (see here https://www.chronicleonline.com/news/state/florida-is-bucking-trend-by-seeing-foreclosure-increases/article_e3d05fec-e673-501b-91b5-3d37cf2d1448.html). So even with interest rates low, the decline appears to have begun
Wow, I’m glad I found your article. I started to consider buying a condo in Jacksonville Florida for the purposes of housing for my college age student that’s going to JU. I see lots of condo on the market and many being sold in days. In one case we bid on one that was just listed and was only hours old, in fact our offer was rejected for another offer. Your article has made me think its better to pay rent now and see how things play out in Florida in the next couple years. Id be interested in anyone comment on this and if they have the same feeling about Jacksonville Florida.
You may also want to quickly check how Jacksonville rates on crime and other factors in this article
Ron, I have to say you have the patience of a saint, taking the time to explain (over and over, again) the housing situation in Florida. You are providing a great service to those who have not experienced what you have. I totally agree with you about the boom and bust cycles in Florida. I’ve seen it first-hand myself. Thanks for all your insight! – Monni
Hi Ron,
I’ve been reading your blogs on July 24th 2019 and enjoy your brutally honest opinion.Thank you!
I purchased 1 condo built in 2003 5 minutes away from Fort Myers Beach as an annual rental and
Purchased 3 single family homes in Southwest Cape, 2000 sqft +also as annual rentals, all purchased from 2009 -2013. I have 1 mortgage out of the four properties.
I’m looking for long term investing and don’t mind the roller coaster market as this will be part of my retirement fund. If you were me,
1.Would this sound like a good idea keeping them as long term rentals and buy another 1 or 2 homes in the same area in a buyers market?
2. Sell in a sellers market and buy property somewhere else? Outside FL? ( I like Florida because it’s landlord friendly)
Anything else you would consider doing or not doing as a small time investor if you were me?
Thank you,
Rich M
Hello Rich,
I do answer questions readers have about my what I write if the question is one that many other readers may have also. Unfortunately, the questions posed above have to do with a specific investment situation likely unique to just one individual. Besides, what I would tell you would probably be so shocking and totally different than anything else you’ve heard that it would require pages of explanation, much of which would prompt additional questions.
Regardless, I do appreciate you reading the post and taking the time to comment. Thank you.
I can’t get a real honest answer from realtors as they are looking out for their best interest. How about this, do you think Florida real estate is a good investment for long term, mainly SWFL?
Some areas yes, many areas no, compared to some other parts of the country.
And now the foreign money is leaving Florida – Palm Beach Post says “total sales of Florida homes to foreigners down 50% since 2017”
Not so much foreign money leaving as less of it moving moving in. Weaker economy overseas, stronger dollar here plus prices in Florida that remain inflated after almost 10 years of rapid increases are probably the main reasons. Not only are FL prices higher than 2017, it takes more foreign currency for each dollar paid.
Hello Ron,
Thanks for you honesty! I have purchased both of your books and currently reading them. I live in NJ and am looking to buy in FL when it is a buyer’s market.
How can I keep track of your updates to different articles on this website? Do you send out email updates, social media etc when you publish or revise any article? I’d like to stay informed. Thanks a lot for what you do!
Hello Samuel,
I’ve been thinking of putting out a monthly email newsletter with info on the real estate market and issues that make FL a better or worse place to live. I would put a small sign-up box on every page on the site, perhaps starting July 2020. Thanks for the question.
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Ron Stack “That Best Places Guy” of Zeus Press Inc
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Ron,
Just a quick note that a monthly email newsletter would be a great idea. I’d subscribe, that’s for sure!
Steve
I currently live in St. Petersburg and have since I was 9 1969. I have family in land o lakes, Orlando, Indian rocks beach. My husband and I want out of St. Pete. I would love to move out of Florida all together but just can’t due to ageing parent in there 80″s and three amazing grandchildren that I don’t want to be too horrible far away from. We would love to be in a smaller town and would like to have 2 – 5 acres of land. Any suggestions?
Thanks
Hello Ron, thank you for the article! Me and my husband are in the very beginning of the home buying process. We have VA loan and great interest rate lower than 3%. After 2 our offers being rejected we were lucky (we thought so) to finally proceed with old but still nice house in South Tampa. On cons side in addition to $184 per SqFt – flood zone that requires flood insurance plus HOI also being twice higher than what we expected. Before I read your article I had doubts about the sellers market situation but since we were lucky to negotiate some of the closing costs we thought it still would be a good decision. Now I think it might be not a smart choice at all. It probably worth to wait a few years especially since we can be PCS in a year. What do you think about South Tampa area? Does it ever worth to buy a house here? Thank you!
Hello Anastasia,
I do not give personal, individual or professional advice on this website. I do respond to comments and point to where to find information, if it may help many other readers who have similar questions. That said, here are a few thoughts…
Tampa is not on any of my best places to live lists on this website or any any other site of mine because it doesn’t meet our crime rate requirement, which is the first thing we consider.
My Florida Move Guide, which can help prevent people from making potentially expensive mistakes, warns about some of the things mentioned in your comment.
Personally, I feel people should learn as much as possible about where they are thinking about moving to, or buying a home in, before committing in order to reduce the chances of costly mistakes that can cause buyer remorse. Here’s an example of some of the things I’d like to know about the Tampa Bay area before committing… What is “sink hole alley”? What’s different about Tampa Bay and hurricanes? From the Tampa Bay Times
In most cases, it’s far easier to buy a home than it is to sell one if you’re unhappy with it or can’t afford it. If I’m an approved buyer or have the cash, can I go out and buy a home today? Most likely yes. If I want to sell today, especially if I just bought a home using borrowed money resulting in a large lien against the property, can I go out and sell it today? Probably not.
Thank you for your service to this country and I wish you the best with the decisions you are facing,
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Ron Stack “That Best Places Guy”
Im from South Tampa. Home prices are the highest Ive ever seen it!!
I’m looking to build a home in northern Florida within the year. Will the cost to build a custom home change significantly if I was to wait for a buyers market?
Thank you!
Great article by the way.
Hello Allison,
In general, the busier a builder is, the more a home will cost you per square foot. Right now (9/19/20), builder sentiment is at an all time high and lumber prices are through the roof. So…
Below is a link to confirm what I just stated from CNBC.
Many potential sellers aren’t listing because they are concerened about lots of people walking through their home in this age of covid. Builders always do better when the inventory of resale homes is low, like it is now.
https://www.cnbc.com/2020/08/17/homebuilder-sentiment-jumps-to-record-high.html
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Ron Stack “That Best Places Guy”
Hi Ron,
I am so thankful that I found your article today. After reading the article and read all the comments, I have decided to put my home search on HOLD. As your article pointed out-I purchased a condo in 2006 (High); however, this week I sold it a loss after 8 months on the market. The only people who made a profit off the sale was the realtors. I walked away with $0.00.
Thank you so much for taking your time to inform consumers like myself.
Me too
Hi Ron,
Considering buying a vacation home in Davenport to rent out most of the year and stay a few times a year. With interest rates so low seems like it makes sense. But after seeing you article on FL being a seller’s market back in June, just wondering how long to hold off on the search or even if Davenport should be a consideration.
Thanks,
Brian
Hello Brian,
There are better places, and worse places than Davenport FL to invest. Crime rates are currently low. Are you aware of what the vacation/seasonal rental market is like in Davenport, or do you plan to rent to only people friends, relatives and other from where you live?
A sellers market can last for years, just as a buyers markets can. The economy is in recession due to the response to covid, which would normally mean prices sinking like a rock in Florida, but that hasn’t happened (at least not yet). People aren’t listing their homes like they normally would in downturns, (no job but laws say you can’t be evicted/foreclosed?) which is keeping the supply low and there is high demand from people fleeing certain cities and states due to worsening conditions there (covid, crime, etc., taxes, etc.)
All bubbles have popped since even before the Dutch tulip one hundreds of years ago. The Florida real estate bubble and current stock market bubble will burst too, but when that will happen has become increasingly difficult to predict.
If it were me, I would be less concerned with when to buy, if the place is to be a vacation/rental as opposed to where I would be relocating to live full-time. I would be very concerned with location, because I feel the value of many places in FL and nationwide could be much lower in the not too distant future. It took multiple chapters in soon to be published books to explain the reasons why.
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Ron Stack “That Best Places Guy”
We just purchased cash for a home in Venice, Fla. New Build HOA community. We want to sell and now is a seller’s market. However we haven’t found a replacement home elsewhere in New England. Can we wait to sell or should we get on the market now for best results?
Hello Ron i am Canadian and considering buying a mobile in a park near or in Naples
I have done my research and have been to Florida many times as far as area
My question is should I wait till all the covid ramifications
wind there way through the economy ???
Like by spring do you see major drops coming?
I just spent 4 months in Florida, renting and looking at properties to buy. We didnt find what we wanted but i would say this: I agree prices will fall – a lot of people are fleeing other places due to taxes and riots and whatever. But FL is a tricky place: lower than average wages, all the lakes have gators in them, too hot in the summer etc. People underestimate the culture shock and missing their home towns. Many will go back. That said if you can afford the mobile and mentally accept a ‘paper loss’ of 25%+ you should go for it. Forget calling an investment, its a life change and you only have so many years to live. Otherwise just rent for a year. Make sure you like the area, the people and the climate. Its quite a bit hotter below Sarasota than above – Citrus trees stop growing north of there. The beach/tourist areas are great but crowded as hell in the winter… you have to live there to see all the things you might like or hate.
Any thoughts on the Miami market specifically Coconut Grove? would you advise a wait approach as prices keep climbing? Rents are over the roof but so home prices…
Hello, thank you for this article! It’s been a few months since this article was written. Are there any updates to the housing market? Does it still look like the Florida/Brevard County housing bubble is going to pop in the near future?
Hello Ashley,
I will write a quick update today 11/21/2020 to this article that should answer your questions about where the Florida housing market is heading.
I’m looking to buy a house with cash now. I just retired and want to move closer to family in Florida. This market stinks. Sure I can sell my starter house for an outrageous price now but it won’t make up for what I would have to pay. I’m about to give up and wait another year.
This is great information. My wife and I are about 10 years out from retirement. We are currently using VRBO for a short term rental in Naples, FL. We fell in love with the area at first sight. We looked at homes last week with a realtor and felt that the homes were a bit over priced. Thank you for confirming our hunch. We will wait until the next buyer’s market to jump in.
I fully agree!!
Tim,
My husband and I are going to look in the Fort Myers and Naples area in a few months, with a possible relocation in one year. We are following homes/condos we love, they are selling fast. It feels a lot like 2005 in Florida again, where there is
too much pressure to act quick. We were looking in Tampa back in those days and the frenzy was too much. We might rent next year and ride it out. This is a big decision for us – our first home at age 51. We have to get it right!! Nice to read you are enjoying Naples. The videos of Delnor-Wiggins State Park and the main street restaurants look amazing. I am also going to order this book, I assume the info in is timeless.
Florida Properties will continue to rise as long as people move to Florida from California, New York, New Jersey, Connecticut and other expensive states to live in. People from these states do not bat an eye at spending $650,000 for a 4-5 bedroom, 4,000 square foot home because they are already paying more than that for much smaller homes.
Hello Joe,
True, home price increases or decreases are a result of supply verses demand. Here’s a few things to think about…
1) People have been selling in other, mostly northern states, to move to Florida to buy cheaper houses since the middle of the last century. So that’s nothing new.
2) With every home price increase in Florida real estate prices, there are fewer people from other states who can afford to sell in their current neighborhood, then move and buy in Florida. You mentioned a few states, but there are far more states now where buyers would have to spend more for a much smaller place, just to move to Florida.
3) With far more people leaving those higher cost states, than moving in, whose going to continue to buy those overpriced homes so the seller can move to Florida? When supply exceeds demand, prices stagnate or drop.
4) If a new administration and a majority in the House and Senate do away with the recently enacted $10,000 SALT cap, that will remove a big incentive for people in high tax states to move to Florida.
5) Some people love Florida forever, but many people who have moved the Florida over the last few years will discover they do not like living in the state for all the reasons covered in the Florida Move Guide (after the honeymoon period ends) and will move out, putting their home up for sale and increasing supply sometime in the future. People start thinking about moving out, but many don’t act until a catalyst causes them to. This could be a recession, a bad hurricane year with multiple landfalls, etc. that causes a buyers market in which home prices start to drop. Then all of those people who discover Florida was a mistake will try to sell at the same time before prices drop too much. This causes further declines. It will happen again. The wolves that snatch homes up at $.25 on the $1 at foreclosure sales in Florida are salivating…
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Ron Stack “That Best Places Guy”
Thank you for the information – very insightful!
Just wanted to get your thoughts…I had purchased a beautiful home in Flagler Beach right on the ocean. The property did not appraise and we decided to let the deal go. The difference between the appraisal and purchase price was approx 20%. Recently someone else bought the property I am assuming all cash Reading this article makes me feel it probably was a blessing in disguise pass on the deal. How will we know when to jump back in the market and do you have a sense when that will be? Do you feel oceanfront properties will also drop as they are unique? In your mind what are pros and cons with oceanfront properties?
Some of my thoughts…..I thought the drop would happen sometime near the end of the Republican second term 2024. Now that is upended. So it could be soon. I don’t know. So much money exist now days. Population has exploded. Easier for an economy to cushion a downturn. Florida is changing. They are learning how to build hurricane proof and they are learning how to recover faster. This COVID thing forces everyone to reconsider their priorities. Just how important is it to continue to work when you already have plenty of money. Life is short. Time is valuable. Lets go down to Florida and live where we want to. These prices are crazy. 2010 these small houses were going for 30K 40K. Now they sell for 150K. Few years ago a 2x4x8 piece of lumber was about $2.50. Today it is $4.75 in home depot. But I have to agree with Ron NOW. I did not for several years. I say NO WAY do we not see a severe recession that topples the stock market and the housing market. No way can you shut down an entire economy and then keep many parts shut down and destroying many businesses without a severe hit to the long term economy and markets. It is coming. I don’t know how long they think they can keep this all afloat but it isn’t much longer.
I am very happy to come across this information very informative, brutally honest, knowledgeable and helpful. I just retire and really wanted to buy a place in Florida. I have no one to guide me so I will be reading more and follow your updates until I decide what to do. Thank you
Well, they are determined to make your prediction come true. Raising insurance prices like crazy and understand it will continue for several years. So yea, people can only take so much and then they have to get out. And in middle of a pandemic.
Rising insurance rates in Florida would not surprise those who read the Florida Move Guide before relocating. Unfortunately, I’ve had to sell plenty of homes for people who retired to Florida on a fixed income, but because insurance rates and costs rose far faster than their income, they couldn’t hold on. Some did something they thought they would never have to. They went back to work, often at low wage jobs but that only proved to be a temporary fix.
It’s a thrill to know your Florida home is worth more every day, until the yearly real estate tax bill arrives. But don’t worry, the taxes on your home will go down after the bubble bursts and prices come back down to earth. Can’t say the same about insurance rates, especially after the next active hurricane season.
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Ron Stack
Florida is a homestead state and after one year, you can apply for a homestead exemption and your real estate taxes can only go up very little no matter what the value goes to. You need to get all your facts straight.
Hello Jon,
Florida real estate taxes, with very few exceptions, are adjusted upon ownership change. If you own on January 1st and apply by March 1st, you can get the exemption for that years tax bill due later in the year. After that, taxes will be capped at a 3% increase per year once homesteaded. The tax increase can be far more than a household’s income. For example, Social Security increases have been lower than 3% for the last decade. The Social Security COLA increase in 2015 was 0, and it was only 0.3 in 2016. Homeowners insurance is not capped and to remain “properly” protected, paying an increase far more than 3% more per year may be required if you have a mortgage. Bottom line: I’ve sold many homes in Florida for people (in homesteaded properties) that mentioned the increase in taxes as being part of the reason they had to sell because they couldn’t afford their home anymore. Moving becomes more difficult the older we get, particularly if it’s something we must do instead of what we want to do. One can experience more unexpected ongoing change in “popular right now high-growth states” compared to the state they lived in most of their lives that had slower more stable growth.
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Ron Stack “That Best Places Guy” of Zeus Press Inc
I’m looking to buy an investment property in Orlando, more specific (Davenport, Clermont, Kissimmee area) but the prices are almost like where I live here in New Jersey. I put in an offer on a house but the estimate mortgage monthly payments are ridiculously high something I was not expecting. Houses are going for over 10k to 25k above asking price. After reading your article I’m debating whether or not to purchase something in Orlando at the moment.I feel like it is not worth it because I won’t be making any profit out of it. What months do you think/suggest is a buyer’s market?
Hello Erica,
Generally speaking, buyers and sellers markets in Florida (or anywhere) are not affected by what month or season it is. However, there can be times of the year that are normally better to be a buyer or seller in different parts of the country. For instance, it normally is tougher to be a seller in northern states during the winter because people don’t want to move in the middle of a snowstorm and the market is driven by families with kids, and they want to move during the summer when the youngsters aren’t in school.
However, the changes brought about by covid and the different government responses to it such as lock downs here, but not there, massive stimulus combined with low interest rates, etc. has temporally changed what normally happens. Homes are selling fast in the middle winter, in the middle of nowhere in “cold” states all across the country.
As the Florida Move Guide explains, snowbirds generally buy different properties and in winter, than families with kids who buy in the summer after they sell “up north”. Normally, as a buyer, it would be best to do the opposite of the rest of the buyers, but this market is so one sided right now, it temporally doesn’t matter.
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Ron Stack “That Best Places Guy” of Zeus Press Inc
I would love to get your updates. I am looking to buy but am skeptical of how high the prices are. Your article has me re-thinking about buying now.
Please , how can I get your updated information ?
Thank you
Will the bubble burst? Maybe. But I don’t think prices will fall as dramatically as in the past. We have to remember that COVID-19 was a big cause of the big exodus to Florida. That in itself is a new scenario which is doing weird things to the economy. So we can’t make the best predictions in that regard. Then there are many white-collar New Yorkers (and others) making the big bucks working from home. So they are going to buy the hell out of everything. Also, the political climate has caused many people to leave places like New York, California and such. Other states that were once dirt cheap are starting to get pricey as well.
I do think that things will slow down. But I get the feeling that Florida is on its way to becoming one of the “either you’re loaded or broke” states (like California has become).
Sergio,
Two points…
1) It’s only been a year since covid, and already all the changes it brought are being pronounced as permanent. I don’t buy that. I believe covid will come to an end or we’ll learn how to live with it and many of the changes it brought will go away too.
2) Right before the 2008 “great recession”, the newspapers reported a prominent economist predicted all homes in Florida would soon sell for at least a million dollars. Shortly after that, the Florida housing bubble burst and prices dropped up to 60% and more in some areas. When the “value” of Florida homes sunk below what the owner owed on their mortgage, many people stopped paying which resulted in foreclosures everywhere. Seems people have a problem paying a $500,000 mortgage, when the same exact home across the street is now for sale for $250,000, and no one is buying it.
It seems to me, that what is happening in the Florida real estate market today (Feb 2021) is eerily similar to what happened right before the bottom dropped out the last time.
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Ron Stack “That Best Places Guy” of Zeus Press Inc
I disagree with you about people leaving NY or CA due to politics. NY and CA are very expensive states to live in and most..not all are not Cibservatives or Republicans. People moving to Florida from NY are looking for nicer weather (NY winters are brutal) and if you are retired or can work from home, Florida WAS a great option. With ridiculous housing costs and Ron DeSantis as a governor, many NY and CA residents might buy a vacation home in Florida before making a permanent move.
Any thoughts on buying in Jupiter, FL? We have been looking for several years, in a few different areas of FL. We have come to love Jupiter. Our ideal place is a townhome on the intracoastal. Now that we are finally serious and ready to buy, it’s the worst time to do so. Of course there is very little available and all offerings are at the highest of price points. We are in our early 60s and not getting any younger. Thanks for any feedback!
Jupiter Florida currently offers a higher quality of life than most other places in Florida. It’s not on any of my best places lists because it’s too close to one of these. At a minimum, I would also read this article before moving there. And yes, it’s one of the best times to be a home seller and one of the worst times to be a buyer in Florida, in part because of covid, artificially low interest rates and huge government spending packages that keeps inflating the bubbles. All of these factors will end at some point, possibly sooner than what most think. Good luck.
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Ron Stack “That Best Places Guy” of Zeus Press Inc
I live in Jupiter and the prices right now are insane. if your not in a rush I would say hold off or rent until the market cools down. Even the rental market is out of control. Before I bought my home I was paying $1500 for a 2/2… now that same unit is going for $2200 a month. INSANE!
I am also looking to buy (or was) and I’m a real estate agent.
Where I live in aventura a 2/2 condo used to rent for $1800-$2000 now it rents for $2800-$3400!!’n
A small 2 beds would sell just an year ago for 35% less!!! I’m definitely waiting to buy.
Hi Ron,
Can you please help me with your opinion. I recently got approved for only 120k loan for a second home mortgage, I currently lived in Southern California and I’m looking at buying a smallhouse in Daytona somewhere near the beach, but most of the homes I’m finding gets sold within few days, seller wanted cash, very bad condition, overpriced homes, most of them are also flipper home.
Is Daytona will be a good area near the beach to buy a home? I would like an area, that is accessible everywhere and walking distance to places. From my price range that I got approved, which area do you recommend? Can you please give me a suggestion which other beach cities area, preferably in the Atlantic Ocean side to avoid the hurricane prone that is affordable, if I can still find one within my budget. I did before but they just get sell right away. I also looked at Jacksonville area but the crime rate there is high.
Thank you for this article, I’m flying this month to look for homes, but now I’m kind of hesitant because the homes I’m finding are not worth the price. Thank you so much for your help.
Grace, I hope you find the following helpful…
You wrote:
1) “I’m looking at buying a smallhouse in Daytona somewhere near the beach, but most of the homes I’m finding gets sold within few days, seller wanted cash, very bad condition, overpriced homes, most of them are also flipper home.”
That’s why the article says it’s not a good time to be a buyer in the Florida real estate market right now.
2) “I also looked at Jacksonville area but the crime rate there is high.”
Perhaps you didn’t check Daytona’s crime rate? Daytona Beach’s crime rate is worse than Jacksonville. The violent crime rate there is close to triple the national average according to the most recent FBI reporting.
3) “I recently got approved for only 120k loan for a second home mortgage” and Can you please give me a suggestion which other beach cities area, preferably in the Atlantic Ocean side to avoid the hurricane prone that is affordable”
So you want to know which beach cities (plural) you can find a home for $120,000 or less in a nice safe beach town in Florida, during one of the worst times to be a buyer? Here’s the list…
–end of list–
Did an agent who sells homes on the east coast of Florida tell you it’s safe from hurricanes there? Here’s an image of some of the past hurricane tracks…
If you want to be safe from hurricanes in Florida, this article may help
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Ron Stack “That Best Places Guy” of Zeus Press Inc
Everywhere in florida is the same. Unless you are willing to pay about 30k more to get a house? This is a sellers market. We have been looking for a house in lakeland for over a year and houses sell within hours over here. We liked at a home for 199k and we bid for 210k and still may need to go up another 10 k. So make sure you find a home about 30 k below your budget so you can bid up to your budget. Best time to buy a house in florida was in the 80’s. It is like the gold rush right now and houses are the gold. It is crazy out there. Florida is booming with people moving here and finding affordable housing is impossible. Good time to be a realtor though. lol
Daytona is not great
What are your thoughts on the best time to sell a vacant lot in a gated community in Ocala, Florida?
There has probably never been a better time to sell a home or lot in Florida, than the last 6 months. This won’t last much longer.
Thanks so much for this timely update. It is really encouraging to read just after signing a lease in Miami. I have a new job there and though I went down to look for houses, I just could not get myself to pay these ridiculous price. A lovely house that went for 1.4 million on 2016 was asking 2.7 now!! I made an offer of 2 million and they told me, nope, because I had financing and appraisal contingencies. The listing agent actually said they only wanted a cash sale because an appraiser “could not understand the true value” of the home. How unbelievable is that?!!?
Its been a sellers market for close to 10 years! When will the tide shift? It seems like never!
“Its been a sellers market for close to 10 years!”
You can thank the FED for record low mortgage rates for a decade for that.
When will the tide shift?
1) When the Fed starts to raise interest rates (not just talk about it) and/or 2) home prices over-inflate to the point where people can’t afford to buy them even though mortgage rates are historically low (are we there yet?).
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Ron Stack “That Best Places Guy” of Zeus Press Inc
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I would love to believe that the regret of moving to FL will set in and current buyers will double back on their decision. This will probably only happen in certain inland areas that let’s face it, are not appealing.
I work in the golf industry in Naples (which is also experiencing its own rise with undoubtedly a fall on the horizon) so I deal with a population of a higher income bracket on a daily basis. These are the people that have the play money and can afford to drop $500,000 on a 1,000 sq foot home. And pay cash. And man, the more you spend time with them, the more you think you’re one of them! They make it look so easy.
Maybe I am in my own bubble, but it seems as though these are the majority of the type of people buying homes in FL right now. (Again, I can only speak for Naples since that is my experience)
These people are not picking up and moving there. They are buying second and third homes so they can keep the “honeymoon” going for years. This is probably happening in all other desirable parts of Florida. Desirable is the key word! They will probably keep these homes for years. I just don’t see the regret happening anytime soon or a mass exodus in this area.
In my industry, we need these people because they’re the reason we have a job. But they’re also the reason for the market being so high. I am trying to buy my first home and settle in Naples but I’m finding it very difficult to break in. “Affordable” places are tiny condos in 50+ communities (which excludes me) or condos with $500 monthly HOA fees on top of the mortgage, or condos that require golf membership with $60,000 initiation fees and dues on top of mortgages! It’s just not smart or affordable for me with my income as it stands.
Everything that has a beginning, has an end, and a rise and fall. I am trying to stay positive and wait this out. Hindsight is literally 20/20 and I wish I had been decisive and made the decision to buy in 2019-20. I have never been there for a summer and was weary of making the leap. Anyway, hoping you’re right about all this, Ron! Thank you for your analysis and research.
Hello Sam,
You wrote: “I would love to believe that the regret of moving to FL will set in and current buyers will double back on their decision. This will probably only happen in certain inland areas that let’s face it, are not appealing.”
A high percentage of people who move to Florida will start moving back after the honeymoon period ends (3-7 years). This is not unproven theory. Population researchers at the fine University of Florida have studied people moving into and out of Florida for decades. As a real estate broker, I spent part of my time helping people buy homes that were happy as pie to be moving to “paradise”, and the other part selling homes for people after the honeymoon who couldn’t get out fast enough.
Most people moving to Florida don’t move inland except to the Orlando area and along the I-4 corridor. Most of the people living in Florida’s interior are generational Floridians, they tend to love it and rarely move out of their home state. It’s the people moving in from other states for the beach and theme parks and “warm and sunny weather all the time” that eventually move out.
You are right about wealthier areas where a high percentage of the homes are owned by people who only spend the winter in Florida. They often own 2-4 homes in different parts of the country and overseas. When you have a net worth of 50 million and it gets knocked down to only 25 million during a recession, it usually doesn’t change your lifestyle.
However, most of the people who buy in Florida are retirees who have sold a home elsewhere that they’ve owned for 30 years and often pay cash in FL. Many others moving in are people who still need to work and require a mortgage to buy. It’s people in these two categories that, unlike the wealthy multi-home owners, live in Florida full-time because they only have 1 home. Full-time transplant residents are the people who learn more of Florida’s negatives they longer they stay, and are negatively affected when economic times sour. People lose their jobs that they need to pay their bills and mortgage of 400,000, on a home that has dropped in value to $275,000. Retirees living on a fixed income who experience a big loss in home value and investments often start to struggle financially too. When times are good, homes sales, tourism and jobs all increase faster than anywhere else. When times change, they sink faster too.
I know this is hard for many to believe, because since 2008 the Fed has kept interest rates lower that they have ever been, tons of money has been printed and given directly to every adult (never happened before) and therefore we haven’t experienced a real recession. We had regularly had recessions every 7 years on average since the country was founded, that re-balanced things and popped bubbles before they got too large. But due to intervention since 2008, we are in the midst of the mother of all bubbles. It will be interesting to see if the FED can slowly let air out of the housing, stock and other bubbles without causing a recession.
Anyway, bottom line, many of the truly best places to live have (almost) always been where only the wealthy could afford to live comfortably (now Naples too?). People who work for a living in these areas usually struggle financially, or have long daily commutes from where the cost of living is more reasonable.
Enjoy Naples and I hope this work out for you.
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Ron Stack “That Best Places Guy” of Zeus Press Inc
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Hello,
The rental price is also increasing crazily. Currently, I rent a 800sqft 1bd1ba condo with 1225/month at west palm beach. Have been living there for 4 years but have to move out next month since the owner doesn’t want to renew the lease. Then I find out the rentals now are 1600 for 1bd, some even 1800 for 800sqft. Ridiculous. I am thinking of buying a small condo also, a 900sqft listing price 199k, but listing agent told my agent that no showing until after the offer accepted. That condo is tenant occupied now and without any pictures at all. How I make an offer for a condo that i dont even know its condition.
For this, I stop buying. Willing to pay crazily high rent, at least not as crazy as buying a condo without even know its condition. If more and more buyers stop buying, housing market would be cool down soon.. it’s just a house/ condo, it’s not like that without a house I would die … but a house with poor condition and higher than value listing price still get multiple offers… lots of buyers just lose their mind and doesn’t realize they do sellers a big favor.