MIAMI – Housing inventory in South Florida remains tight — and prices remain high — as 2023 closes out. A real estate expert says a key factor could re-ignite the market, however.
A streak of rising home prices and high interest rates have eroded buying power squeezed home sales. The Federal Reserve raised interest rates in an effort to combat inflation.
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“This is where this whole thing started,” Ron Shuffield, the president and CEO of Berkshire Hathaway HomeServices EWM Realty, told Local 10 News.
South Florida has also seen an influx of newcomers.
“(In) just a four year period, 2019 to 2023, we saw a 66% increase in value because COVID just created this huge value increase all at once because people were moving here,” Shuffield said. “We replaced the South American and international buyer for the moment with people from the Northeast, Midwest and California.”
Interest rates got all the way up to 7.79%.
“We were all getting a little bit anxious because people say ‘Well then I can’t borrow as much and so I can’t pay as much and I can’t buy a house right now,’” Shuffield said.
But those rates are now starting to go down, dropping one point over the past two months.
“What does that mean?” Shuffield said. “It means more people can afford more houses.”
That, Shuffield said, can help buyers.
“People have just been waiting, people have been shocked from going up from 3% so I would say, especially to young people, just get in the game, don’t sit on the sidelines,” Shuffield said. “You know, renting for five years, if you can afford to pay rent, you can probably afford to get a mortgage and when you rent, you always have the possibility that the landlord can raise your rent upwards of 30%, so as interest rates come down, get in the game to start building equity.”
Berkshire Hathaway is the parent company of WPLG, Inc.