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Housing Inventory EXPLODING IN FLORIDA!

Mar 01, 2024
When all the real estate markets in the United States and actually around the world started to explode, it became clear after about a year that Florida was the clear winner when it came to how high

housing

prices were and it seems that They never decrease. In fact, there are still many areas in Florida where home prices continue to increase by even double-digit percentages; However,

inventory

throughout the state of Florida is absolutely

exploding

when you look at a map of the United States and

inventory

levels on the Reventure app that you don't see anywhere else and that even comes close to the state of Florida in terms of how much inventory has been added to the market year over year and right now Florida has seen a 35% increase in its overall inventory in just one year and that is far beyond even the distant seconds of Louisiana and Mississippi where they have about 28 and 26% year-over-year inventory growth, so it's not even close.
housing inventory exploding in florida
I'll explain some reasons later as to why I think this is happening, but Florida is clearly showing signs that things will probably go down as fast as they went up, but if you really want to know which areas of Florida will see the biggest price drops, you have to be more attentive. granular you have to break things down even further and the first thing I'm looking at is where in Florida is inventory increasing the most, so when we break it down into different metropolitan areas in the state of Florida we can see that there are no metropolitan areas in Florida that are shaded blue, unlike other areas of the country where inventory continues to decrease year after year.
housing inventory exploding in florida

More Interesting Facts About,

housing inventory exploding in florida...

You can clearly see on the map here that there are places across the country that still have inventory shortages. is still going down in terms of how many available listings are on the market, but when we look at the state of Florida, there is not a single Metro in Florida that meets those criteria everywhere today has more inventory than it did a year ago and so what The map it shows is that there are actually different shades of red and what this red represents is that the redder it is, the greater the inventory growth has been year over year and the lighter it is, the lower the inventory growth has been, but What's with all this inventory growth? it was actually done with home prices here in Florida because one thing we have been continually told is that the reason home prices are so high is because there is a shortage of inventory and while that is true, there is a shortage of listings, not actual homes.
housing inventory exploding in florida
There is a shortage of available listings in the country right now that is starting to reverse here in the state of Florida, so how does that affect prices here? Believe it or not, it hasn't been affecting prices much yet, it's the big keyword. here because while there are areas that are seeing price drops where inventory is shooting up more, there haven't been any major drops as many people probably expected and I think that's mainly due to the fact that the sellers are always behind. the curve when it comes to the real estate market it doesn't matter what is happening, whether the market is going up or down it doesn't matter, sellers are always the last to realize what is happening in their local market, that's fine, and they What I think we're seeing now is a lot of sellers are pricing their homes as if there's still a shortage of inventory, especially in these areas where there's no shortage of inventory, what this is going to do is you're going to start to see it continue to pile up. more and more inventory due to so many sellers not really following the schedule or properly pricing these properties to sell them and as more inventory builds up more pressure will be put on the pricing of existing inventory to drive prices down even further. more and ultimately what will happen is there will be a wait.
housing inventory exploding in florida
In the game you are going to have a group of sellers sitting in the market and thinking well, you know I can keep my price high. I can only wait for a buyer to come along, so whoever can essentially afford to waste and lose the most money is the one who can keep their price higher for the longest, but that high price really doesn't do you any good if you don't You can get that price, if the comparisons in your neighborhood are now selling for less than what you're asking, it's a losing battle, it doesn't matter.
How much money do you have to sit and wait? Well let's do some research with the pricing and see what's going on here so let's zoom in on the Miami Metro because obviously I live here and we talk a lot about Miami because I'm here and what you can see is that even though inventory has increased by Miami, has not yet increased enough to affect prices, especially since Miami is probably the most popular place in Florida where people from all over the world move. So here we are, we're still seeing a 6 1/2% increase in prices year over year; however, if we go to the west side of the state and we go to southwest Florida, where inventories are shooting up more in some cases.
Over 100% year-over-year inventory growth, we can see that is starting to have an impact on pricing in places like Sarasota and Bradington, in Northport, in Cape Coral and Fort Meyers, these areas are starting to see pricing They're down between 1 and 3.% right now and I know most of you will say that's not enough, Michael, and I agree that it's not enough, but what you're seeing is that things are starting to move in the direction we have been talking about for a long time. now once the market starts to return to an equilibrium where we start to see a regular amount of inventory on the market this will have an impact on pricing and these southwest

florida

markets are the first ones seeing this now same here.
We have a beachfront rental home that can be yours for just $24,000 a month and it is another hot property that has sold three times in the last 6 years for 1.1 million, then 2.6 million, then almost 2, 8 million and then most recently they put it up for sale. I rented just a few days ago for $20,000 and I thought, hey, it's not rent, let's raise the price $4,000, that must be a great idea, in the meantime, you have a property tax bill, a payment of $345,000 per year, another notable area of price drops when you look at the map. from Florida, here are the Villages right now.
The Villages is seeing a 3.2% year-over-year price decline due to all the additional inventory on the market, which will be great for any retirees moving to this area since then. It's a great retirement destination in Florida, but like I said, guys, it's not about big price drops, you know, we're talking like The Villages, for example, going from $47,000 for a mid-priced home to $394,000. Another example is, you know, going down from $361,000 to $350,000, so these prices are still very high and when combined with a 7% mortgage rate, no matter which way you split it, it's unaffordable and that's why which is why these prices will continue to drop as more and more inventory is accumulated.
Because people can't keep empty real estate forever, even if they live in the house, if they've put it up for sale, there's a good chance there's a strong reason why they need to sell. Most people don't sell just to sell. A reason behind it, whether it's a job, a divorce, a birth, some kind of life event is usually the main reason someone puts their house on the market, so even if you still live in the house, There is usually a sense of urgency. Hey, we have to sell this house in a few months, but you have to understand that people can't afford to stay in empty houses forever.
Now, obviously, if someone has enough money to own a couple of empty houses, then they can probably afford to leave. It goes on like this for quite a while in the hope of trying to get the price they want, but if they actually have any real motivation to get rid of the property, they will lower the price to the appropriate number when the time comes, but some sellers know that they just take longer, Unfortunately, some people just don't get the picture fast enough, so it's good news that we're seeing prices come down in areas where inventory is skyrocketing and I think we'll be on this trajectory in a couple more years.
From now on, you will be able to see a lot more inventory in Florida and you will reach points where you know prices will drop 10% to 15%, maybe more by then depending on the conditions of the general economy, but also you should consider why are all these houses for sale? Guys, I can guarantee you that the number one reason so many of these homes are for sale is because of massive increases in homeowners insurance, something we've talked about dozens of times here. The channel, this is seriously impacting the cost of ownership here in Florida, but it gets worse because when you combine it with high property taxes due to these high real estate assessments and if you live in an HOA community, those fees skyrocket as well, It is simply unaffordable. you know people can't afford to keep houses at these prices anymore, so you have to look at it that way, as if it's not just the fact that inventory is skyrocketing that will have downward pressure on prices , but also the cost of ownership of these homes has increased. has gone up so much that it will also have to influence the future price because we know that a lot of people simply can't afford houses at current prices, but even if they could, guys, even if let's say everyone had the income to buy at current prices, There is a high probability that many of those people still cannot afford to pay for the maintenance, bills, insurance, and taxes on these homes once they purchase them. the down payment and the initial monthly payment on the house without taking into account any of these explosive increases in anything else, so you have to understand that those increases will definitely play a role in what prices are going to have to be in the future, but I think So overall this will be good news for people who have given up on the dream of owning property in Florida and it's not going to change overnight and I think there's a good chance we'll still never see the prices. .
They get to where they were before the pandemic, but they will probably be much more affordable in the coming years. You have to be prepared to say: Okay, I'm fine paying 20% ‚Äč‚Äčless than what the house costs today. but recognizing that your expenses to maintain the home will be very high in the future due to higher insurance property taxes and HOA fees, but you can get even more granular with this data, such as breaking it down into zip codes of a certain Metro and we will return to Miami, where I live here. You can see that inland areas like Hiia and Little Havana and Little Haiti, all of these places are still seeing a huge price increase year over year, about 10 or 12% in some cases, because the houses in those areas are still very affordable compared to the rest of Miami, so there is still a lot of room for growth in those areas, compared to if you look at the beach where I live, home prices have essentially stagnated.
They're actually not going up at all anymore because it's already gone up so much here that it's like hitting the ceiling. There's really no more room for growth at this point, so we won't see much appreciation moving forward. ahead is my opinion and what's going to happen with that and then if you go and get closer to an area like southwest Florida in the Sarasota Brenon area for example, you'll see price drops in almost every county there, but there are still a There are a few areas that are holding out and they are still in the orange area, where you see prices continue to go up and they are usually the most affordable areas, guys, the places that are going down right now They are the places that have just come this far.
Wow the price is sustainable now, another factor that will have downward pressure on prices for the state of Florida is the price of rent because in fact Florida is also the state that has experienced the largest drop in rental prices Year over year in 2023, compared to other states, we saw a whopping 9.21% decrease in rental prices on average. Statewide, that's pretty big, so like I said, things went up really fast here and they're starting to go down just as fast, but there's no question that it's still high. Like home prices, the average rent in Florida is still about $2,100 a month and the national average is about $1,964, so it's still more expensive than you might expect to pay on average in different parts of the country. country and in places like Jacksonville, for example, rentals. they are actually still going up, there is a 7.62% increase in rents last year compared to here in Miami where rents literally doubled or even tripled in some cases for somepeople.
I've seen absolutely crazy things happen here, rental prices here are low on average. about 7.67% and I noticed it, guys, I see it a lot here. I show them all these listings that I find, they know houses, places for rent and they know that many times they have to lower the rent. to where it was in 2021 just to rent the place or even 2020 prices, you know, forget about 2022 and 2023 rental prices. Those days are in Tampa and they have seen a 22% decrease in rental prices year after year. Again, that's enough to rock the boat, not yet guys, but things are going in the right direction, but Florida is also benefiting from this huge multifamily rental construction boom that we're seeing.
Nationwide, around 1 million new units are being delivered. between last year and the next 12 to 18 months, you're going to see a lot of those units here in the state of Florida and I mentioned a little bit about homeowners insurance earlier and the impact I think this is going to have on house prices. homes here and this is just another data point to support my claim because in Florida, if you have Citizens homeowners insurance as of January 1 of this year, you are required to have flood insurance if the cost of home replacement is 600 $100,000 or more, but they have a tiered system where every year in the future they will continue to force more and more people to have flood insurance whether they are on a flood plane or not, Even if this house here is, you know, 30 feet above sea level, they don't care if you have a citizen policy, you have to get flood insurance, so starting in 2025, the cost of the value of replacement is reduced to 500,000 starting in 2026. up to 400,000 and starting 20 27 will be reduced to all insured properties and citizens will be forced to have flood insurance.
Now I assume they are just referring to single family homes here, it doesn't say, but no. It doesn't make any sense for it to apply to condos because condos will already have their own flood insurance anyway with the Master insurance policy in many cases, so it probably won't apply to individual condo unit owners, but will apply to the condominium. Association as a whole, that if your condo doesn't have it now, the HOA fees will increase even more in the future, but here's the problem guys, not only does this make owning the house more expensive, but in In the mortgage world, what this does is increases the buyer's debt-to-income ratio, making the home less affordable.
This can basically take someone from being approved to being rejected if they are already on the brink of bankruptcy to begin with. affordability and honestly, as a resident here, I think this is all a good thing in terms of things are going to have to come back to reality. I don't think it's a good thing that we're seeing all these major increases in insurance and all this because you know I think all of this is However, a scam because of that will force prices back down to Earth because people will just You won't be able to continue paying all these expenses indefinitely and keep home prices where they are and you're starting to see like me. showed you different pockets where prices are starting to fall due to the explosion in inventory and when you combine this explosion in inventory with all of these increased expenses, you can expect more of the same in the coming years if you bought a house in Florida at any time . in 2023 and it is your primary residence, in case you haven't already you only have until March 1st which is just a few more days to apply for your homestead exemption and the reason you want to do this is because it saves Your money on your property taxes is not as much as you would like to have saved.
I did a whole video on this a couple of weeks ago showing you that even with a homestead exemption, your property taxes can still go up by a pretty large amount and I'll give a quick refresher on that in a moment, but keep in mind that just You have until March 1 to apply for your homestead exemption. Okay, if you bought a house last year, the other caveat is that you must have lived in it. on the property as of January 1, so if you bought a property, say in February of this year, you won't be able to apply for the homestead exemption until next year and basically what the homestead exemption does is cause the taxable value of your property to decrease. will be reduced by $50,000, so if the assessed value of your house is $200,000, it will reduce it to 150,000 and you will be taxed on that $150,000 value instead of 2,200,000 and I know that probably no one has a $200,000 house here in Florida, just an example for mathematical reasons here is my problem with Florida's homeownership exemption types, while it saves you money it is better than not having it at all.
There is a big misconception that your property tax bill can't increase more than 3% per year if you have a homestead exemption due to the Save Our Homes Act, but that's actually not true because there's a misunderstanding here. that many people do not realize and the misunderstanding is how the law works when the Save Our Homes Act basically what it does is it makes the assessed value of your property cannot increase more than 3% per year. This has nothing to do with how much your tax bill may increase because, first of all, the school portion of your property tax bill is completely exempt from the homestead exemption, so you are always taxed on the value. total appraised when it comes to schools, whether you have kids or not, they basically say the value of the house increases by 20%, which we won't see anymore, but many people saw this during the big rise in prices, so if someone had a homestead exemption during this time, then they would have only seen their assessed value increase by 3%, not 20%.
Which, you know, saves them from having a giant tax increase. However, like I said, it only prevents your appraised value from increasing, it has nothing to do with the mileage rate. Okay, the millage rate is basically the percentage of taxes that your local county and governments charge against the assessed value of your property and there is no limit or limits on those and those can be changed at any time by the school district by your county by your local city and from my personal experience like I shared with you in that previous video I saw a 133% increase in my property tax bill Just because of that, just because of the fact that the mileage rates increased so much for the county, the city and the school district, it was enough to increase my overall tax bill by 133%, so don't be fooled by this narrative that, oh, if you have a homestead exemption, your property tax bill can't go up more than 3% because that's not true, just your assessed value can't go up more than 3%, so going back to our previous example, you know if you have an assessment of $200,000 and the the homestead exemption reduces it to 1 15 valuation of $50,000, the maximum assessed value your property could increase for next year is an additional 3% of 150,000, which would be an additional 4,500, so now you're talking about that your new assessed value couldn't be more than $154,500 and the same would be valid for the following year and the year after that as long as you have the homestead exemption, but that doesn't stop your local municipality from charging you a much higher mileage rate , which can have a much bigger impact on your property tax bill, guys, go watch that video.
I'll link it here so you can see which one I'm talking about. I go into more depth in this video, but the bottom line is that if you haven't applied for the homestead exemption yet and you are eligible for it, make sure you do anything that will help you save some money right now, it's a good thing and you can just go to your county website, whatever county you live in in the state of Florida, use that. website to file your homestead exemption and there is a chance you could file late. You know that you could technically be considered for a homestead exemption until the cut notices go out in August, but there is a chance that you will not be granted the homestead exemption.
You might not get those savings, so you better do it now, guys, and if you don't, your property will be treated like any other property where there is still a limit on how much your assessed value can increase each year, even if you don't have a homestead exemption, so if we go back to the same house, let's say there's no homestead exemption, okay, assessed value of $200,000 and each year it's limit to increase 10%, okay, it can't increase more than 10 % so next year that house can't appraise above an appraised value of $220,000, that's fine, but you'll find that having that homeownership exemption at least prevents your appraised value from being too high, so I would never tell anyone that it's not worth doing, obviously.
I just dedicated an entire segment to this video telling you that if you qualify you should do it because it will save you guys money, but don't think that when you hear that you know a lot of things, not even real estate agents understand this well. because they don't know how this works a lot of times is that just because you have this doesn't mean your actual bill can't go up more than 3%, that's absolutely false, but having the exemption will at least keep your bill from going up. increase as much as possible, that's fine, but there are other factors out of your control, like what your county, city and school district decide to do with millage rates, which is completely out of your control, so, To begin with, this entire system is corrupt. with the right, we vote these people into office, they are in control of how much they tax us and we have no say in the matter, just pay up or we will seize your property, that's how it works, so if you enjoyed this. video, make sure to subscribe to the channel and if you don't want to wait for my next video to come out, watch this one on the screen here and I'll see you in the next one.

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