As we enter 2019, Florida is benefiting from the Tax Cuts and Jobs Act of 2017. Residents of high-tax cities are increasingly drawn to South Florida after the tax law capped deductions. We are now seeing buyers from California, which in the past, was unusual. New York, Connecticut and Illinois buyers have been regulars to Singer Island, however, the numbers are increasing.
Other low-tax cities are also doing well. Las Vegas and Phoenix have slowed a bit recently but still have the fastest home-price growth among major metropolitan cities.
Let’s take a look at the results in condominium re-sales at the end of February 2019 on Singer Island:
- There were 15 condo re-sales on Singer Island in January and 9 in February of 2019; four of which were in the $1 million price range. The sold prices averaged 93% of list price.
- Only 22 percent of the re-sales in February were below $500K.
- There were no short sales in in the past 12 months.
- The highest re-sale in February was Ritz Carlton 2104B for $1,300,000; a Walker Real Estate Group listing.
- At the end of February, condo inventory stood at 189 units; about the same as this time last year.
- Price per square foot of the older condos (built 1969-1989) stands at $330 (12% increase from 12 months ago); and the price per square foot of the newer condos (built 2003-2008) at $569, a 9% increase from this time last year.
2019 Economic Forecast for Florida
At the 2019 Florida Real Estate Trends summit in Orlando, Florida Realtors Chief Economist Dr. Brad O’Connor discussed the outlook for Florida’s economy and housing market in the coming year. In terms of job growth, Florida has done better than the U.S. for the past few years (since 2013) and ended 2018 with an annual job growth rate of 3.3 percent compared to the U.S. figure of 1.9 percent, he said. The state’s population growth has not yet returned to the 2 percent annual growth rate it had before the downturn, but the latest Census figures show a 1.5 percent population growth rate from 2017-2018, ranking Florida No. 5 among states.
Looking at Florida’s price growth trends for single-family homes, the market diverged, he noted. “We’re finding that different price tiers are definitely appreciating at different rates,” O’Connor said. “The range up to $200,000 is up almost 12 percent (in price growth), while the range of $600,000 and over has less growth. There’s a lack of affordable housing supply in the lower price tier, while the upper levels are almost a balanced market.”
Lack of new housing supply is constraining the market and more construction is needed, he said. However, construction is hampered by a shortage of skilled construction workers, rising cost of materials, lack of land available and other factors.
In good news for Florida’s housing market, active inventory at the end of 2018 was up compared to the end of 2017.
With current data showing that Florida is outpacing the nation in terms of home sales and employment growth, O’Connor forecasts that 2019 should see about a 1 percent growth in home sales and maybe 3 to 4 percent price growth. That’s in contrast to the National Association of Realtors’ (NAR) forecast for national home and condo sales to remain relatively flat in 2019.We will see how well this holds true as the year progresses.
Over all, the general U.S. economy should experience modest growth, he said, while mortgage interest rates should gradually rise throughout the rest of the year and be somewhere around 5 percent by the end of the year – about a 1/2 percentage point rise from the current rate.
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2019 has all the indications of being an active year for the Walker Real Estate Group. As one of the top Luxury Sales Teams on Singer Island, providing our customers a true concierge experience has been a major factor in our success. Trust, integrity and knowledge of the market is our number one priority.