Slim Chance of South Florida Home Prices Falling
New data shows that South Florida homeowners are in a good position with little to worry about for any decrease in home values.
A recent report by Arch Mortgage Insurance Company states that the likelihood of prices declining in Palm Beach County in the next two years is only a 3% chance. Broward and Miami-Dade counties along with 22 other areas in Florida have a mere 2% chance of price declines. To put things into perspective, the national average is 5%.
“I’m bullish,” said Ralph DeFranco, chief economist for Arch. “I think it’s a good time to buy. Interest rates are low, so buyers should lock in while they can.”
Many things are taken into consideration with the forecast that the Arch risk index report creates. They analyze things including median home prices from the Federal Housing Finance Agency while factoring in regional unemployment rates, affordability, change in population, housing starts and delinquent mortgages.
Palm Beach County based chief economist for the Metrostudy research firm, Brad Hunter, states he is not concerned with any part of the market either.
“One could easily make a strong case that prices will keep moving up, albeit at a slower pace,” he said. “I think it’s a single-digit probability that we see a real decline in home prices.”
Jack McCabe, another analyst in Deerfield Beach states that the strong demand and lack of supply of homes in lower price ranges will continue to nudge values of the luxury homes and condominiums higher.
A recent report by Ten-X, an online real estate marketplace in Irvine California listed the top real estate markets for this spring of 2016. Two Florida markets were in the top 5 with Palm Beach County coming in at fourth and Broward county being fifth. Ten-X used similar reporting methods based on home price increases, affordability and future demand based on local economic conditions.
“Florida, in general, seems to be doing really well,” said Rick Sharga, executive vice president of Ten-X. “Of the states that were hit hardest during the crash, Florida still has the most room to grow to get back to peak housing prices.”