Why Now Is the Time To Buy Property in Florida
Buying a home is tough right now. With home prices still inflated, inventory still low and mortgage rates near 8%, housing affordability is the lowest it has been in decades.
But there are also some opportunities for buying a great deal — if you look in the right places.
We asked real estate agents about the Florida housing market and whether they thought buying right now is a good idea. Their responses were a resounding “yes.” Here are a few of their top reasons to buy property in Florida right now.
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No State Income Tax
Florida is one of nine states in the U.S. that don’t have state income taxes, making it an attractive place to live and invest in real estate.
Alex Coffman, real estate agent and co-owner at Teifke Real Estate, sees Florida’s taxes as a major upside. “Florida does not levy a state income tax on individuals,” Coffman said. “Florida has a state sales tax rate of 6%, a maximum local sales tax rate of 2% and a combined state and local sales tax rate of 7.02%. Its government derives the majority of its tax revenue from consumption taxes such as the sales tax and the property tax. This tax-friendly environment makes it an attractive location for both investors and potential homeowners.”
Florida Has a Great Economy
Despite big layoffs in tech-heavy states, Florida still has a strong economy. With better-than-average growth in private sector jobs and low taxes, it’s an attractive place.
Josh Steppling, a real estate agent, thinks it is a great place for long-term investors.
“The Florida economy is thriving,” Steppling said. “The job market has been consistently growing and, with no state income tax, it’s a magnet for professionals seeking financial stability. The influx of residents has kept demand for housing more stable than other areas of the country, but a softening market makes it an excellent time to invest for those looking for a long-term holding.”
Alex Locklear, founding member and owner of NC Cash Homebuyers, also sees Florida’s economy as an upside in today’s market.
“Florida’s economy has been growing steadily over the past few years, with low unemployment rates and a strong job market,” Locklear said. “This means that there is a high demand for housing, making it a good time to invest in real estate. You can also expect to see an increase in property values as the economy continues to thrive.”
High Interest Rates Are Lowering Sales Prices
Yes, high rates make monthly payments worse. But they also are dropping housing prices across Florida.
Pam Orzan, real estate broker at Coastal Living South Florida Real Estate, sees a lot of opportunity with high mortgage rates.
“People ask me every day about the rising interest rates, but I still say it’s a good time to buy here in Florida,” she said. “Rates fluctuate, and we may even get another raise in rates before year end. However, higher rates slow the rise in demand and in turn slow fast-rising prices. Hey, I would rather buy at a lower sale price and a higher rate than buy at an inflated sale price with a lower rate. That’s because you can always refinance, but you can’t always get back the high price you’ve paid for your home.”
Cash Buyers Have More Leverage
If you’re an investor or buyer who can make a cash offer, you can get deep discounts in today’s Florida real estate market.
Andrew Salamone, real estate agent at The Salamone Group, is seeing a lot of opportunity for cash buyers, specifically in the condo market.
“People are running scared from condos, not only because of the amount of the upcoming assessments necessary to meet the state’s requirements but because of the unknown nature of potential future repairs,” Salamone said. “Because of this unknown factor, condos are selling for deeply discounted prices that are likely to recover the moment that the final assessments are known.
“In some places, you can find units with sweeping water views selling at 60% of what they were just a short time ago, and likely even further below where they’ll be in the future. The caveat is that the deepest discounts are available in the buildings that are currently non-financeable, so the purchase will have to be with cash or with an alternative loan product.”
Builders Are Offering Massive Incentives
In light of slowing demand and high interest rates, builders are offering huge incentives to buyers for new home builds. In some markets, this includes rate buydowns, getting mortgages under 5% (compared to nearly 8% today).
While Edward Zoller II, Realtor with Villa Realty Group, is a bit pessimistic about today’s market in Florida, he said getting builder incentives might be a good deal.
“[The] only reason anyone should go out and buy today is out of necessity,” Zoller said. “Most sellers sell because of three reasons: the house is too small, too big or falling apart. To those sellers, now is a good time to buy, because the home they are in has overinflated equity still, and the new home will fit their lifestyle.
“If a builder is offering over $50,000 of incentives, then a buyer should look at that and see if they are comfortable with the 30-year fixed payment.”
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This article originally appeared on GOBankingRates.com: Real Estate Agents: Why Now Is the Time To Buy Property in Florida