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Central Florida real estate prices are expected to continue to rise, but at rates lower than those seen in 2021, when the average price reached an all-time high of $330,000, with 20% valuation compared to last year. The slightly larger projected inventory, due to new construction in progress, should help. Experts predict that the new year will bring a robust and more contained housing market than what we experienced in 2021.
Sean Snaith, director of the Economic Forecasting Institute, University of Central Florida, told the Orlando Business Journal that the pace of new construction will increase, but not enough to offset the severe shortage of single-family homes in the near term . The initial total of 156,763 homes in 2020 will jump to 189,736 in 2021, then decline to 169,678 in 2022, 155,816 in 2023, and 149,360 in 2024. Housing price appreciation will slow during this period as supply meets strong demand.< /p>
Sean Sanith’s predictions, however, may suffer deviations due to the lack of materials and labor in the market. Several releases are being postponed by construction companies due to this situation.
Competition Between Buyers (Bidding War)
Another critical factor keeping Florida price forecasts high is competition among buyers, the so-called “Bidding War”. The bidding war creates a real auction between buyers. A property receives more than 5 proposals at the same time. The situation becomes even more critical when investors enter the auction, competing with residents.
The bidding war on the one hand is good, as it keeps the housing market buoyant and stimulates what is one of the main sectors of the economy. However, when it is too fierce, it creates insecurity in the local housing context, as the so-called “First Home Buyers” are left out of the market.
Fortunately, it seems that Bidding War is slowing down. A recent report released by the Redfin portal shows that the percentage of proposals that suffered competition in November 2021 dropped to below 60%. The number, although high, is lower than that seen in October (62%) and considerably lower than that reached at the peak of the pandemic (74%).
Although the percentage has fallen, however, it is still higher than in November 2020 (57.3%).
About AMG International Realty
AMG International Realty is a global real estate company specialized in Florida. If you want to know more about opportunities in Florida real estate, get in touch right now and chat with me on WhatsApp: +1 (305) 318 6968 (Heloisa Arazi).
