Benefits and Pitfalls of Buying Property in Florida | Negotiators.tv (2022)

Florida is one of the most popular places in the US to move to. Many people look to Florida as a great place to move to because of the weather and lifestyle. However, many buyers are looking to Florida as a great place to purchase a vacation home or make a real estate investment. Between home buyers looking to settle down, retirees, real estate investors, and those looking to get out of their state, Florida has much more buyers than sellers. Buying a house in Florida has become fast-paced because of the competitive seller’s market. Yet, many people are still pursuing the idea of buying a house in Florida for the first time. If you are considering purchasing a house in Florida, it is important to be aware of the pros and cons. Here are the current benefits and pitfalls of buying property in Florida.

Buying a House in Florida For The First Time: The Pros & Cons

Benefits and Pitfalls of Buying Property in Florida | Negotiators.tv (1)

The Benefits of Buying Property in Florida

Just like with any decision, there are many pros and cons to buying a house in Florida. But, buying a house is a lot more costly and consequential of a decision to make than most others. While Florida has its fair share of negatives, there are also many positives about moving to the Sunshine State.

1. Mortgage Rates Are Low But Rising

Mortgage rates have been at historic lows for years now, but with inflation on the rise, it looks like mortgage interest rates will rise as well. The average rate for a 30-year fixed-rate mortgage across the nation is currently 5.42%. In Florida, the mortgage rate is at 5.125%, according to US Bank. Historically, the current mortgage rates are still lower than they ever have been but that might change in the future.

The Fed is raising its interest rates to combat inflation and as a result, experts predict that mortgage rates will increase alongside the Fed’s target rate. Mortgage rates are still low currently but there’s no telling how much The Fed will have to raise its rates to stop inflation.

2. Renting is Getting More and More Expensive

If you are looking to or already live in a rental in South Florida, then you know how expensive it can be. The prices of rentals has increased dramatically over the past year and has pushed many renters out of the area. Realtor.com released new data that revealed that the rent in South Florida increased by 50% in the last year. NBC Miami reported that a studio apartment priced at $1,500 a year ago is now $2,300 now. The reasoning behind these price hikes is still being debated but what is certain is that the extremely high demand has played a vital role.

Depending on your long-term plans, buying a property in Florida may be a better option than continuing to rent. Mortgage rates are still low and there are many perks to homeownership. However, rentals are flexible whereas mortgages aren’t so make sure to consider all your options before making a decision.

Read More: Pros and Cons of Renting A House vs Apartment

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3. Potential For Investment

The Florida Housing Market is one of the strongest markets in the country and has been for a few years now. The state’s population is constantly growing as more people move from all over the world. Many real estate investors are looking to Florida as a place to invest in property because of the potential for appreciation and the opportunity to rent out the properties for extra income. The prices for houses continue to rise which makes Florida a great place to buy a house and allow it to appreciate.

Benefits and Pitfalls of Buying Property in Florida | Negotiators.tv (2)

The Pitfalls of Buying Property in Florida

The Florida market in 2022 is a seller’s market which means that there is more demand for houses than there is supply. This gives the seller a lot of power in the negotiation process and often leads to an extremely competitive market for home buyers. Here are some more cons to keep in mind if you’re considering purchasing a house in Florida.

1. Home Buyers Are Paying More Than Needed

In a seller’s market, the market is extremely competitive and as a result, home buyers often end up paying more than they need to. Home buyers are known to bid over the asking price in a seller’s market by a substantial amount. In Florida, houses have been selling for thousands over asking price and sometimes over a hundred of thousand. Buying an overpriced house or being forced to bid too much over asking can pose a problem if the housing market were to ever change drastically or crash.

2. Experts Are Predicting a Recession Soon

Inflation has caused many prices to increase from gasoline to food. On top of that, the stock market has been on a downward spiral since the beginning of 2022. Both of these factors and more are leading economists to predict a recession in the near future. A recession would mean that people have less money to spend, jobs are lost, and the housing market would be greatly affected. Property values would likely decrease in Florida and selling a house during a recession for a profit is a lot more difficult.

3. Cash Buyers Are Getting Prioritized

Florida has had a boom of cash buyers that can close on a house faster than traditional types of buyers. Many home buyers have reported their experience of being a top-choice for a certain house on sale only for a buyer with cash to swoop in and purchase the property right before them. However, most home buyers don’t have cash on them to buy a house. If you’re not a cash buyer, you may find yourself at a disadvantage when trying to purchase property in Florida.

4. There Are a TON of Investment Properties in Florida

Florida is a very popular place for vacationers and snowbirds. As a result, there are a lot of investment properties in Florida that people purchase for the sole purpose of renting it out. Part of the expectation of being a homeowner is living in a a quiet neighborhood. Homeowners have had unpleasant experiences living next to Airbnbs where people are constantly coming and going at all hours of the night.

There is also a problem where investment firms from out of state are purchasing properties in Florida at an increased rate. Home buyers may experience a problem bidding against firms and hedge funds that have more money and can pay in cash.

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Consider The Location and Your Reasoning For Moving To Florida

Florida has a lot of properties all throughout the state. It’s important to pick a location that you see yourself being content with for a while. South Florida may be a popular destination for buyers, but there are many other locations that may better fit your needs such as Central Florida or North West Florida. Picking the right city or neighborhood is especially important if you have a family. The school system, the crime rate, and other demographics should all be taken deeply into consideration.

The reasoning for your move to Florida is also important. Many people move to Florida because they enjoyed their vacation in the Sunshine state or they believe they will enjoy the ideal Florida lifestyle. However, many homeowners are surprised to learn about the reality of living in Florida when it comes to the weather, the cost of living, HOAs, and other things.

It’s important to move to Florida for the right reasons so you’re not caught off guard or disappointed with your decision later on down the road. You are the only person who can properly assess your reasoning and circumstances to determine if moving to Florida is right for you.

A Great Real Estate Agent Makes Buying a Home in Florida Easier

In the fast-paced and turbulent housing market like Florida’s, finding a house and closing on it quickly is difficult. There are already a lot of things to consider before buying a house (closing costs, the neighborhood, the state of the property, etc.) without even thinking about the challenges that come from buying a house in a quick and competitive market like Florida.

A great real estate agent that has the expertise to navigate the local market can help buyers immensely by doing a lot of the work for them. A great agent will also have a large network of other agents, know about houses before they are even listed on the market, and understand all of the ins-and-outs of buying a house in Florida.

However, not all real estate agents are great. Many agents are simply average or even bad at their jobs. Luckily, we have created a real estate organization that streamlines your search for a high-quality real estate agent otherwise known as a Negotiator. Negotiators are real estate agents that have all proven themselves to be top performers in their local real estate markets. By hiring a Negotiator, you’ll have someone on your side who has a wealth of experience, real estate expertise, and an unrivaled work ethic working to get you the best deal possible.

Contact your local Negotiator if you want to work with a great real estate agent.

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FAQs

Is buying investment property in Florida a good idea? ›

In fact, the Florida real estate market is one of the most profitable investment markets to date. There are many factors to suggest that purchasing Florida investment properties is a rewarding experience. For example, the state offers people with a lucrative return on investment on their properties.

What are the 3 most important things when looking to buy real estate? ›

We asked five real estate and housing experts what's most important to look for when buying a house.
...
They agreed on eight key factors to keep in mind:
  • Location.
  • Price.
  • Home style and size.
  • Home amenities.
  • Quality of schools.
  • Taxes and cost of living.
  • Size of the property.
  • Homeowners association (if applicable)
3 Jan 2022

What does a recession mean for the housing market? ›

A housing market recession occurs when home sales decline for six months straight, which officially happened in July 2022. The National Association of Realtors (NAR) just published new data stating that existing home sales were down 5.9% for July 2022 and 20.2% from one year ago.

Is it a good time to buy a house in Florida 2022? ›

Overall, the Florida housing market is still pretty hot and is expected to stay that way throughout 2022. This is great if you're a seller because it means home prices are going up and there isn't much selling competition—so you get the luxury of choosing from the best offers on your timeline.

Will house prices go down in 2023? ›

Our new, higher, interest rate forecasts mean that we now expect house prices to fall marginally in 2023 and 2024. While there are risks on both sides, our base case is that prices drop by 5% overall, reversing a fifth of the surge in house prices since the pandemic began.

How long can I stay in Florida if I own a property? ›

4. How long can you stay in Florida if you own a property? This is one of the key things to consider before moving abroad. Legally, you can spend up to six months in any 12-month period in the USA on a typical B2 visa, which works well if you're planning on renting your property for the other half of the year.

Is the real estate market cooling off in Florida? ›

The Florida Market Will Cool Down by 2022

The housing market in Florida was growing at a record rate in the early stages of the coronavirus outbreak in February 2020. Sellers were retaining their advantage, and buyers were taking advantage of reduced mortgage rates.

Is buying a Florida condo a good investment? ›

An oceanfront condominium is always a great investment because it will appreciate over time. Vacation rentals, short-term rentals, and second homes are always more beneficial when an oceanfront property, beachfront, or waterfront condo is the investment.

What should you avoid when buying a house? ›

7 Things you should never do before buying a house
  • Don't finance a car or another big item before buying. ...
  • Don't max out credit card debt. ...
  • Don't quit your job or change careers before buying. ...
  • Don't assume you need 20% down. ...
  • Don't shop for houses without getting preapproved. ...
  • Don't go with the first mortgage lender you talk to.
14 Sept 2021

What is the 5 rule in real estate investing? ›

Multiply the value of the home by 5%, then divide that number by 12 to get your breakeven point. If the monthly rent on a comparable home is below the breakeven point, it makes financial sense to rent. If the monthly rent is higher than the breakeven point, it makes financial sense to buy.

What to check before buying a property? ›

Factors to Consider Before Buying the Right Property in India
  1. The Requirements Before Buying the Right Property.
  2. Financial Status of The Buyer.
  3. Check Developers Reputation & Goodwill Before Buying Right Property.
  4. Construction Quality of the Property.
  5. Carpet Area of the Property.
  6. Location & Neighbourhood of the Property.

Is 2022 a recession? ›

According to the general definition—two consecutive quarters of negative gross domestic product (GDP)—the U.S. entered a recession in the summer of 2022. The organization that defines U.S. business cycles, the National Bureau of Economic Research (NBER), takes a different view.

Is it good to buy a house right now? ›

As for the buyers who can afford it, the crisis became a good opportunity to upgrade into a bigger space or diversify their investment portfolio by buying real estate at much affordable prices.

Is it a good idea to buy a house now? ›

Based on data, now is a good time to buy a house — and first-time buyers agree. According to Fannie Mae's National Housing Survey, more than 60% of renters would buy a home if their lease ended. Most expect rents to rise sharply in the next 12 months. The housing market may favor Fall home buyers.

Will Florida real estate prices go down in 2023? ›

Depending on who you ask, the forecast for 2023 is mixed. Most experts in the housing industry predict fewer buyer demand, lower prices, and higher borrowing rates. Rate increases, along with a shortage of availability, have pushed many purchasers to the sidelines.

Are Florida house prices dropping? ›

Home prices in South Florida are finally falling. Last month prices fell in Miami-Dade for the first time since 2021, and prices in Broward have dipped for the first time in months. For those who have been waiting for the market to cool down, this is great news.

Will 2023 be a good time to buy a house? ›

Now, as demand slows, an economist says US home prices could fall as much as 20% in 2023. In addition, a slowing economy overall could bring 30-year mortgage rates back down.

Will house prices fall when interest rates rise 2022? ›

Further rate rises are expected throughout 2022, which could dampen the housing market because it means mortgage repayments will increase. The cost of living crisis is likely to be the biggest cause of a slowdown in the housing market.

What will house prices do in 2023? ›

Would falling house prices improve affordability for prospective buyers? Economic consultancy Centre for Economics and Business Research (Cebr) said it expects house prices to fall by 4.5% on average next year, with a peak annual contraction of 6.2% expected in Q3 2023.

What will mortgage interest rates be in 2023? ›

Our baseline forecast is for the Fed Funds rate to top out at the 3.50-3.75 percent range in early 2023, but we see upside risk to this terminal rate.

How long do you have to live in Florida to be a resident for tax purposes? ›

183 Day Rule for State Residency in Florida

Under the rule, the taxing states require that a person looking to declare residency in Florida must reside in Florida for at least 183 days (in other words, one day more than six months).

Can you buy a house in Florida without being a resident? ›

Yes. Because the US has no citizenship requirement for real estate sales, non-US citizens can buy property in the US. In fact, foreigners can even qualify for a mortgage if they meet certain requirements. However, foreign property owners do face a more challenging tax situation than US citizens.

Is it a good time to buy house in Florida? ›

Invest in the Hot Florida Housing Market

Not only are jobs hot on the market in the Sunshine State, but buying a house in Florida is also trending – and for good reason! Right now, fixed mortgage rates in Florida fall between 1.99% and 2.99%.

What is the hottest real estate market in Florida? ›

Jacksonville

"One of the hottest real estate markets for sellers in Florida is in the Jacksonville area. They have seen steady home appreciation and job growth in the past couple of years with people moving here for the jobs, the proximity to the ocean and the mild winters.” Jacksonville is on a tear.

Is real estate slowing down in Florida? ›

Year-on-year however, Florida Realtors have noted that there were fewer sales in 2022 compared to 2021, which indicates the slowing of the housing market frenzy.

Is the Florida housing market still hot? ›

Florida's housing market, which contended with an influx of residents from other parts of the country, ran hotter than most (Chart 1). Home prices in the Sunshine State are up 58% from the start of 2020 – the second strongest showing behind Arizona, leaving the national gains (+40%) in the dust.

What is the average HOA fee in Florida? ›

The average HOA membership fee for a single-family home is $250 per month. So, if you move to an HOA community in Florida, you could end up paying significantly more. Some communities may charge under $100 while others charge rates in the $1000s.

Do you pay property tax on a condo in Florida? ›

Yes, condos have property taxes assessed on them the same as townhouses and single-family houses do.

Do condos go up in value? ›

Do Condos Appreciate In Value? Although properties can appreciate in value faster if they're in a desirable location, the fact remains that most condos appreciate in value at a slower rate than single-family homes.

Is it a good time to buy a house in Florida right now? ›

Not only are jobs hot on the market in the Sunshine State, but buying a house in Florida is also trending – and for good reason! Right now, fixed mortgage rates in Florida fall between 1.99% and 2.99%.

Is it smart to buy a house right now? ›

Based on data, now is a good time to buy a house — and first-time buyers agree. According to Fannie Mae's National Housing Survey, more than 60% of renters would buy a home if their lease ended. Most expect rents to rise sharply in the next 12 months. The housing market may favor Fall home buyers.

Is it a buyers or sellers market in Florida? ›

Is it a buyer's or seller's market in Florida? It is currently a seller's market in Florida, and high demand is causing properties to sell quickly and for more money.

Should I build a house now or wait until 2022? ›

Our outlook continues to be that if you are ready and able to build then now is the best time to do it. It is anticipated that interest rates will be on a rising trend throughout 2022 and costs will continue to increase, although the cost increases will be at a more normalized rate.

Are Florida house prices dropping? ›

Home prices in South Florida are finally falling. Last month prices fell in Miami-Dade for the first time since 2021, and prices in Broward have dipped for the first time in months. For those who have been waiting for the market to cool down, this is great news.

What is the hottest real estate market in Florida? ›

Jacksonville

"One of the hottest real estate markets for sellers in Florida is in the Jacksonville area. They have seen steady home appreciation and job growth in the past couple of years with people moving here for the jobs, the proximity to the ocean and the mild winters.” Jacksonville is on a tear.

Will home prices continue to rise in Florida? ›

Instead, a less severe recession could happen in 2023 as the demand for new houses is expected to continue to be high. Home prices are predicted to carry on rising, but this is happening at a slower pace now, as the increase in mortgage rates puts a dampener on house price growth.

Will 2023 be a good time to buy a house? ›

Now, as demand slows, an economist says US home prices could fall as much as 20% in 2023. In addition, a slowing economy overall could bring 30-year mortgage rates back down.

Will property prices fall? ›

House prices in the UK are likely to fall by at least 10% next year as mortgage providers pull deals and raise interest payments to levels not seen since before the 2008 financial crisis, property experts have predicted.

What are the pros and cons of buying a house? ›

Pros and Cons of Buying a House
ProCon
Mortgage interest and property taxes may be tax deductibleProperty taxes and HOA fees are the buyer's responsibility
Buyer has full control over home improvements and upgradesBuyer incurs any maintenance and repair cost
3 more rows
18 Apr 2022

Where is Florida's real estate Booming? ›

Several cities in Florida - including Spring Hill near Tampa, Lehigh Acres near Fort Myers, and Palm Bay in Brevard County - are listed as some of the best cities to invest in real estate in 2022, according to Policygenius.

Is the housing market still strong in Florida? ›

Overall, the Florida housing market is strong and is predicted to remain so in the next five years. If you're a seller, this is wonderful news since it implies property values are rising and there isn't much selling competition, giving you the luxury of selecting from the best offers on your schedule.

Is the real estate market slowing down in Florida? ›

The July sales report is the latest evidence that the housing market is slowing as homebuyers are hit with sharply higher mortgage rates than a year ago. Home prices have also continued to rise.

Is building a house cheaper than buying in 2022? ›

Is it cheaper to build or buy a house? As a rule of thumb, it's cheaper to buy a house than to build one. Building a new home costs $34,000 more, on average, than purchasing an existing home. The median cost of new construction was $449,000 in May 2022.

Are lumber prices coming down in 2022? ›

As a result of this and other factors, Fastmarkets RISI predicts U.S. softwood lumber consumption will drop 1.4% year over year in 2022.

Will construction costs go down in 2022? ›

Will construction costs go down in 2022? The short answer is that it's not likely to happen. It was predicted by many economists in 2021 that the overall economy would have a slow recovery and that a housing crash could occur.

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