After a year of price growth and record low inventory in the South Florida housing market, experts predict that home prices will continue to increase, but not at the pace they did over the last 18 months, according to a press release.
“We don’t expect to see the same price appreciation we had last year, though we don’t expect to see a decline in pricing,” said Eli Beracha, director of the Hollo School of Real Estate at Florida International University.
A Realtor.com forecast predicts that South Florida housing prices may rise almost 6% in 2022, while a Zillow forecast predicts real estate market list prices could shoot up by 15%.
Factors contributing to slower price growth include higher mortgage interest rates, new developments hitting the market and higher housing inventory as sellers try to capitalize on the hot market.
Experts say South Florida will remain a seller’s market and bidding wars and multiple-offer homes will still be commonplace for home buyers over the next year.
Another factor in pricing for condos and single-family homes will be supply-chain issues and labor shortages, which will lead to increased construction costs from homebuilders, according to Brett Forman, executive managing director at Trez Capital.
“Construction is more expensive, and the labor and supplies are more expensive. So, naturally, this will lead to price increases from top to bottom, making it far more difficult to deliver an affordable product,” Forman said.