WESTON, Fla. – Condos, apartments and single family homes: Demand for every kind of housing in South Florida has been soaring, but some experts see signs of a shift.
Last month, property sales in Miami-Dade, Broward and Palm Beach counties dropped compared to July 2020.
“I see that there’s a correction coming. The question is, is it going to be a correction like what we saw in ‘08 where there’s a bubble that just deflates, or is it going to be something that’s a bit more gradual?” said Weston real estate attorney Roy Oppenheim.
Dr. Ken Johnson, a real estate economist with Florida Atlantic University’s College of Business, said we may be at the peak of a current housing cycle, but he believes we’re far from the crash of 2006 because demand still outpaces supply.
“So our inventory shortage is a problem we’re not going to solve in the next year or two. It’s going to take a while to catch up,” Johnson said.
While there are signs that interest rates may start to tick up, Johnson doesn’t think the increase would be enough to cause a major correction in pricing.
“We think we’re going to have a real estate event and this time it will be, we think, it’ll be more like 1989 where prices will go flat for some number of years and will catch back up,” he said.
Oppenheim is concerned about an potential increase in foreclosures as lenders lift pandemic prompted moratoriums on mortgages
“The foreclosure mills, the people that brought you foreclosure fraud 10 years ago, are ramping back up as we speak,” he said.
But Johnson said people won’t simply walk away from their homes this time around.
“In the last year, they might have stopped or slowed their mortgage payments, but the value of their home has gone up so dramatically, they’re not walking on the value of that home. They’ll sell it,” he said.
As long as Florida remains a tax friendly place to live, for individuals and businesses, market experts believe demand to live here will remain strong.