I can’t speak for the rest of the country, but in South Florida only the wealthy are not priced out of the real estate market, and that includes rentals. If you are a middle class or lower financial classification then your chances of success in finding a suitable and reasonably priced home are pretty much zero, especially if you are financing or have a lower credit rating.
How did we come to this? How did South Florida’s real estate market become so volatile? There are actually several reasons and you may or may not agree with me, but I am basing my opinion on what I see and study every day. Once the market began its comeback after the recession and housing crash everything slowly went to hell. It started with sellers overpricing their homes and realtors going along with it just to get the listing.
Then there was the violence and economic uncertainty overseas that led to a massive influx of people parking their money here before a tyrant like Maduro seized it for the state. This in turn led to the all cash buyer.
And then came the pandemic where people could work from home so what better idea than to move somewhere sunny for work? This massive wave of people came from all over, but mostly the northern part of the country and to them the prices asked here were a bargain compared to say New York so they were more than willing to pony up the big bucks.
And finally, and there are some who will not like this, but unchecked immigration led to even more people moving here, not so much for the sun or even the prices, but because they felt at home amongst their peers who spoke the same language. I am not saying immigration is bad. It is just another factor in the pricing category. Since these people are new to the US they have no credit history so everything is cash. Middle class Americans cannot compete with cash, period. And what do low income folks do? They drudge along in low income housing forever or until gentrification takes hole, like in Wynwood.
The outcome? This has led to a shortage of housing, thus driving up prices significantly. And it affects new construction as well where developers have snapped up what is left of citrus groves and ranches in order to build new, state of the art homes. Take a drive through Broward county alone and all of the new developments start at one million dollars. Start. I am currently searching for a home of any kind for a young couple who make upwards of $200K a year and still can’t get them in anything. With that kind of income, and it’s nothing to sneeze at, they would be working night and day just to pay for the mortgage, high taxes, maintenance that never seems to go down and the ridiculously high insurance rates, if you can even get a policy!
I love the way realtors advertise on their listings that for only say $5K a month you can own this lovely home without disclosing that as soon as you buy that rate will skyrocket because your taxes will be reassessed and insurance rates will double. Why you ask? Because they can. That’s the excuse I get from every insurer. Yeah, the board just decided to raise rates twenty percent across the board. Never mind that you have never had a claim. I have been in my home for twenty five years and in that time my taxes have double even with homestead, my insurance has tripled and my maintenance has quadrupled. The excuse I constantly get is inflation. For instance, the lawn maintenance contract in my community is over one million dollars a year and that does not include my own yard. So now the landscapers want more because apparently it costs more to gas their equipment. Move elsewhere you say? I would have to leave the state to find something affordable.
So here is where I get back to my original thesis. You have to be rich to move to South Florida and that is the reality now. I wish I knew where all these millionaires get all this money because it feels as if the 6.7% that represent the country all live here. I can’t say if that will ever change either because we have had times of highs and lows, but this time it feels like it’s going to stay forever or until new arrivals wise up and figure out that we have forty nine other states. Better do your homework before you decide to move here because the reality of high prices will set in real fast and you’ll be broke and in the foreclosure line before you know it.
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