In the spirit of full disclosure, this has been our market forecast for 2015 – 2016 – 2017 and now 2018.
The only revision is the final 3 major risk factors we identify.
Conventional wisdom states 3 key metrics drive housing prices:
- Consumer Confidence
- Interest Rates
The US economy is in good shape, but further improvement would be welcomed.
Consumer confidence is also good, but somewhat fragile, and further improvement would be welcomed here as well.
Long term 30 year fixed rates are great.
5% mortgages are hard to beat.
But one factor at play in Florida probably outweighs them all: DEMOGRAPHICS.
The demographic outlook for Florida is exceptional.
10,000 people retire everyday in the USA and will do so for the next 15 years.
Many of these retirees will make their way to the Sunshine State.
Approximately 1,000 people a day move to Florida !
And the vast majority of these Baby Boomer homebuyers pay cash when the buy a home.
We have had only 3 clients in the past 3 years who required mortgages, all the rest paid cash.
The robust real estate market currently underway in Florida is not stopping anytime soon.
The solid price increases of the past few years will moderate, and that is a good thing for the markets’ long term health.
Simply put, the demographics are so powerful, so overwhelming, we doubt even the Government could mess this up, and believe me, that is saying something !
The 3 biggest risk factors to our real estate market are:
- Extreme skilled labour shortages.
- Raw land price increases.
- Raw materials costs that keep rising.
The National Association of Home Builders, recently stated that the current tariffs imposed on Canadian lumber imports, have increased the cost of the average home $9,000, and the NAHB vehemently oppose these tariffs, because they harm ordinary Americans the most, especially first time home buyers.
All the best and much success in 2018.