The total number of market listings in the US rose 8% year-over-year in May, the first increase since June 2019, according to a report released Thursday by Realtor.com.
The increase could be a sign of the gradual return of the US housing market to equilibrium, as in recent years there has been excess demand and lack of inventory, pushing real estate prices to all-time highs.
High prices and interest rates impact demand
High prices coupled with an anti-inflationary policy of rising interest rates may have finally cooled the demand side.
Owners feel safer to offer properties
At the same time, with the return to normality, homeowners are more encouraged to put their properties up for sale and receive visitors, something perceived as risky in the critical times of the pandemic.
However, this movement is still timid. Is the market really returning to equilibrium?
Is the market returning to equilibrium?
It is still too early to understand whether the increase in the number of listings is a temporary and temporary result or, in fact, a sign of the market returning to equilibrium.
Florida prices remain high and the trend continues. Some factors consolidate the trend, such as the continuous demand for residents coming from other states and the delay in supplying the market with new properties.
Official studies project that Florida will receive 849 new residents a day by 2026. If the number is confirmed, it will be practically impossible to serve all these new residents with new housing. Florida construction companies are trying to accelerate projects and take advantage of historic demand, but there is a lack of land, shortages of labor and materials.
Low inventory makes it difficult to find ideal property
In addition, the increase in the number of listings encounters another barrier. “People offer their properties for sale because they want to buy another one”, says Heloisa Arazi, broker and owner of AMG International Realty, a real estate company specializing in Florida. “In an extremely heated market with low inventory, the owner may even be tempted to sell, but he often gives up because he will face difficulties to buy another one”, explains Heloisa.
“In addition to the difficulty in finding another property, the interest rates are also higher”, she adds. “During the pandemic, interest rates were pushed down to historic levels. Many chose to refinance their own property and lower the mortgage installment,” she explains. “By exchanging properties now, they can lose the interest rate advantage they have obtained”, warns Heoisa.
Is it a good time to buy?
Everything indicates that prices will continue to rise. In this context, waiting is not a good strategy. Buy now and take advantage of the very high potential for real estate appreciation in Florida.
When buying vacation homes in Orlando you can still earn in return on rent, in addition to the appreciation of the property. The expected return on renting in Orlando is one of the highest in the world.
About AMG International Realty
AMG International Realty is a global real estate company specialized in Florida. If you want to know about the opportunities in the Orlando, Tampa and Miami markets, contact me right now and chat with me by WhatsApp: +1 305 318 69685 (Heloisa Arazi).