Florida Market Crash!?

[Frank Mongiello]

Hey Bigger Pockets community!

I'm an agent in South Florida servicing Jupiter, West Palm, Taquesta, Abacoa, Lake Worth, Boynton, as well as some surrounding areas. One thing I hear from buyers all the time is "I'm going to wait for the market to drop" or "I'm waiting for the correction" or "the recession/depression is coming" or "it's a sellers market, there's no way prices can stay so high"

In my opinion we aren't due for a correction in this market given the large influx of people coming from out of state and the extremely high amount of interested buyers we have down here. A lot of people make the comparison of this market to 2008 but I don't see the connection. Interest rates in 08 were at 6-7% and mortgages were being handed out like candy leading to a large number of foreclosures. I don't see the same story playing out!

That being said I do think we are due for things to slow down in the next 6 months and for the market to stabilize but not necessarily drop given demand is still very high. Even an influx of foreclosures may not be enough to shake the market because of how many potential buyers there are. 

I wanted to get everyones thoughts on this topic and where they see prices going moving forward! Also whether you think now is a good time to buy or if you're waiting for the unknown to happen. 

[Kristin Kiddy]

@Frank Mongiello I whole heartedly agree.  Our inventory is so low right now that it is going to take some time just to get back to a normal seller's market.  And we need that desperately!  Most of the sellers in my area who want to make a local move are holding off because there is nothing for them to buy!  The only new listings coming on are from people who have to move out of the area or, sadly, inherited/probate properties.  

As for a correction, I don't see it happening as well.  Appraisals are keeping the loan amounts from going too crazy.   Properties selling for more than list are being funded by people's savings accounts, not the lenders, through appraisal gap addendums.  So even if appreciation were slow significantly, A. the loan amounts are still not upside down and B.the buyers have a lot more skin in the game from their savings so they are going to be more motivated to not just walk away (like what happened in 2008).