South Florida's Real Estate Market Red Hot A Year Into COVID Pandemic
MIAMI (CBSMiami) – South Florida is seeing a crush of new housing buyers. So much so, it has created a seller's market with many sellers getting top dollar. People from all over the Northeast in high-tax areas are making an effort to make South Florida their new home, but it's not easy.
"My wife and I both grew up in Florida," said Jonathan Ticknor, who is relocating from the Washington, DC-area in Virginia.
Tired of the cold weather, the snow and high taxes he and his family are ready to move south.
"The weather here has been in the 20s over the last week, barely scratching the mid-30s. So, yeah, seeing it's 75 in Florida," he said.
While the lush colors of sunny South Florida provide for a new landscape, Ticknor said it's the job opportunities in Miami Dade and Broward Counties that tipped the scale.
"The new tech scene and cybersecurity scene in South Florida, is something I work in, is definitely something I want to be a part of," Ticknor said. "And of course getting away from the state income tax will be very nice."
Ticknor pays 6% income tax to the state of Virginia on top of other local taxes. Other places in the Northeast, like New York, pay more than that. Throw in COVID shutting down northern economies and 1,000 people moving to Florida every day, Ticknor said it created a housing crunch.
"The competition is just as hot as it is in the DC area. You pretty much have to make a move the day of on a house you like," Ticknor said, adding that potential buyers will lose the deal if they don't.
Realtors have never been busier.
Jim Norton of Coldwell Banker Global Luxury, who represents properties from Brickell to South Miami and most of Broward, said the inventory of available homes is slim.
He said the real estate market is "crazy." He gets calls every day from potential home buyers and has to tell them inventory of available homes is super slim.
He gave CBSMiami an example, saying, "We listed a house on Saturday. We had over 80 showings, 80 showings, the same day we had half a dozen offers. Of those half a dozen, five of the six were for over asking list price."
Norton said it goes back to the simple metric of supply and demand. Low supply equals high demand. Couple that with so many people coming to Florida, specifically South Florida, and the inventory of available homes runs out.
While homebuyers are escaping high tax states, there's also an influx of European and South American buyers. They're all competing with local buyers who are moving from urban high rises to the suburbs.
Norton said, "You have people coming from out of state who have already sold their homes in New York and made $400,000 to $500,000 and they're paying cash. So there's that clash of locals versus the out-of-staters."
Since COVID hit, potential home buyers realized they don't need to go to the office building to work – they can do it from home. Realtors are now seeing those buyers looking for more house than they need. Those who were looking for four bedroom homes want homes with dens or a fifth bedroom they can convert to an office.
For families like the Ticknors, it's about moving quickly, and the ability and willingness to pay top dollar.
Ticknor said solidifying a deal was competitive and wasn't easy.
"I think we put in offers on three different houses until we finally got one," said Ticknor. "I think there were three or four (offers) at the time. And the other house had almost a dozen. For each of those we had to pay over asking to be competitive, yeah."
Hot selling neighborhoods will continue for the foreseeable future.
According Norton, many families will be looking for new homes in the spring wanting to get the kids settled before school starts in August. Stimulus checks are expected to start to dry up in September or October. Interest rates are expected to rise late this year. The housing inventory is expected to loosen up until late this year or early next year. So it would appear the top dollar selling will continue into early next year.