After a year of momentous developments, the Florida real estate market is back to full capacity. In many cases, it’s even better than before due to the market fervor surrounding increased seller activity and buyer interest. This has reached the point where sellers are receiving multiple daily offers that often go beyond the asking price.
Potential buyers, active sellers, and experienced agents in the Florida housing market have firsthand experience of this phenomenon. But due to its staggering effects on local real estate, it has also captivated the attention of out-of-state markets.
To help you understand why Florida is enjoying this market boon, here’s a lowdown of the reasons behind this development.
Low Mortgage Rates Are Driving the Market
When the coronavirus (COVID-19) pandemic hit the U.S. a year ago, it had significant effects on the local economy. Among many other developments, one of the steps for recovery included the Federal Reserve cutting its benchmark interest rate.
With the move’s ability to indirectly affect mortgage rates, it triggered home loan interest rates to drop considerably. The overall market sentiment also played a part, and caused mortgage rates to break various records of all-time low figures.
A year later, mortgage rates are slowly rising all over the country. But they are still quite affordable compared to a year ago. In January 2020, the 30-year fixed mortgage stood at the rate of 3.51 percent. In January 2021, the rate went to 2.73 percent. When looking at March 2021, the rate has reached the figure of 3.17 percent.
In turn, those who want to find affordable homes have continued finding listings in the Florida real estate market. This is one of the main reasons that are driving the boost in the Florida housing market.
Need for Larger Spaces is Motivating Buyers
This has also motivated a large number of existing homeowners to sell off their smaller units and find bigger homes. Those who rent a smaller space also want to benefit from lower mortgage rates, and end up selecting larger homes.
With the Florida real estate market being no stranger to spacious homes with multifunctional architecture, it welcomes these homebuyers openly. As a result, this has also contributed to the increase in buyer activity around the Sunshine State.
Increasing Prices and Short Inventory is Encouraging Sellers
For instance, in January 2020, the median sales price for a single-family home in Pinellas stood at $265,000. But in January 2021, the same location posted these figures at an elevated rate of $309,450. This is just one area. However, the same phenomenon can be seen throughout the state.
This consistent increase in price is also encouraging buyers to place offerings on homes before they grow even more expensive. Due to this reason, the Florida real estate market is seeing a boost in activity from sellers and buyers alike.
From where things stand, low mortgage rates, inventory shortage and price increases still serve as motivational calls to homebuyers. If the market continues at this pace, it is easy to assume that Florida may have an enthralling year ahead. If you want to find a home in the Sunshine State, this is the time to act on your plans.
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