2021 South Florida Housing Market Predictions
So the 2020 housing market was absolutely bananas! And the 2021 housing market is looking like it's going to be the same, if not even better. In this video, we're gonna go over our 2021 housing market predictions for South Florida.
Prediction number one, we're gonna continue to have low interest rates almost all year. So one of the main drivers in buyer demand last year, was extremely low interest rates. Almost everyone who had a house refinanced, if you didn't, please tell me, let me refer you to a good lender, you can save tons of money, but the low interest rates also helped spur a ton of buyer demand. If you can buy a house with an interest rate less than 3%, historically speaking, that's almost like free money and a lot of buyers are able to buy a ton more houses and keep their mortgage payment much, much lower, compared to just a year ago when interest rates were above 4%. So we're gonna see low interest rates for almost the entire year. The Federal Reserve said that they're not planning on raising interest rates until at least 2024, unless anything crazy changes in the economy. So we're gonna be in a low interest rate environment for a very long time. That's gonna continue to spur buyer demand and keep mortgage payments affordable for buyers.
Prediction number two, we're gonna have an increasing amount of first-time home buyers. Millennials have now overtaken baby boomers as the largest generation in America. So what does that mean? Well, millennials are getting towards the age, just like me, where you're getting engaged, they're getting married, they're starting families, all of those things are a little bit delayed for millennials compared to previous generations. But now that they're starting to do that there's going to be that natural increase for housing that happens when people combine households, they have children, all of those things require more space and it's gonna spur buyer demand. So we're going to see an increase in the number of first-time home buyers, just naturally, with the largest generation in America, getting to the age where they're starting families.
Prediction number three, we're gonna see continued demand from out-of-state buyers moving to Florida. So what we saw in the pandemic was that people realized that they don't have to live, you know, close to their office 'cause they can work remote. For whatever reason whether it's political, taxes, weather, you name it, people started moving from all across the country down here to South Florida and I see that trend continuing. There are going to be people who are continuing to move to South Florida from all across the country. So we're getting a lot of demand, not just from the people who already live here, but from people across the country. So we're gonna see an increase in the demand for homes in South Florida.
Prediction number four, we're going to continue to see multiple offer situations on almost every house here in South Florida because of all the factors that we just talked about. Low interest rates, millennials buying houses for the first time, and buyers move from all across the country, we're gonna continue to see the multiple offer situation. So it's extremely important that you're prepared when you're buying in this market and know how to make a very strong offer.
Lastly prediction number five, housing prices are going to continue to increase, but I predict, not as strong as they were in 2020. So if you look at the average from all the economists, the National Association of Realtors, the National Mortgage Bankers Association and all the big data firms that track the housing market, on average, across the country, they're predicting a 5.7% increase in home prices in 2021. My prediction would be that in South Florida, that's a little higher. I would not be surprised if it hits 7%, maybe a little bit higher in 2021 because of all the buyers who are moving to this area 5.7% is an average, but you got to take into consideration if everyone's moving to Florida, they're moving out of certain areas. So I think you're gonna see not as strong of an increase in price in maybe the Northeast, New York City area, and a stronger increase down here in South Florida. But on average, across the country, all the top economists are expecting on average a 5.7% increase. That's less than what it was in 2020. Down here in 2020, it was about 11%, slightly higher than 11% on the year in increase in prices. So I think we're gonna be about half that, but still, that is a really strong demand and a really strong price increase. So if you're thinking about getting into the South Florida market and you wanna take advantage of these increasing prices and extremely low interest rates, I would love to be the realtor of choice. Give me a call, shoot me a text, send me an email, let me know how we can help.