The real estate market on the Treasure Coast is set for an exciting year ahead. With declining interest rates, the demand for homes is expected to rise, making it a favorable time for potential buyers. In this article, we will explore the factors contributing to this outlook and what it means for the region.
South Florida Residents Flocking to the Treasure Coast
One significant driver of the high demand for homes on the Treasure Coast is the influx of people from South Florida. Many individuals are seeking the relative affordability and quieter lifestyle offered in this region. This surge in demand, however, puts additional pressure on an already limited inventory. Even with the increase in new home constructions, it is unlikely to fully meet the growing demand.
"The inventory problem is not going to get much better in 2024. If you're a homeowner with a 3.5% mortgage and you sell your house and buy another one for the same price, you've just basically doubled your monthly mortgage payments," explains Rick Sharga, a real estate analyst. This situation poses challenges for homeowners looking to upsize or find a new property.
Declining Interest Rates and Improved Affordability
The Federal Reserve's decision to lower interest rates is expected to have a positive impact on the affordability of homes. After multiple interest rate hikes in previous years, the 30-year fixed-rate mortgage has declined from its peak of 7.5% in October 2023 to 6.62% as of Jan 2, 2024. This reduction is likely to continue, with the Fed expected to cut rates three times this year.
"We do expect affordability to start to improve in 2024. We're not going to see a big turnaround, but I do think we're going to see a baby step in the right direction," says Lawrence Yun, the chief economist for the National Association of Realtors.
This improved affordability is already attracting potential buyers who had previously put their search on hold due to high interest rates. Kristi Stewart, a broker for Coastal Home Real Estate, notes, "Now that they are getting it, everybody's back out and we're showing homes like crazy."
Predictions for the Year Ahead
The real estate market on the Treasure Coast typically experiences an upswing at the start of the year and into spring. With the current increase in interest from buyers, this trend is likely to continue. However, the limited inventory remains a challenge that cannot be easily overcome.
Julia Kocovski, a Realtor with Baron Real Estate, explains, "Existing homes are seeing a hit on that end because there is so much construction of new homes. And builders are also offering incentives that regular homeowners cannot offer." This competition between resales and new constructions is expected to prevent a significant increase in home prices.
Sally Daley, broker and owner of The Daley Group at Douglas Elliman, predicts that prices will either remain flat or experience a modest 2% increase throughout the year. While there may not be any drastic changes, the steady growth ensures a stable market.
In conclusion, the Treasure Coast real estate market is poised for an eventful year. With declining interest rates and an increase in demand driven by South Florida residents, the stage is set for exciting opportunities for buyers. While the limited inventory may pose challenges, the market's steady growth and improved affordability make it an appealing prospect for those looking to purchase a home on the Treasure Coast.
Ananya Tiwari is TCPalm's business reporter. You can contact her at ananya.tiwari@tcpalm.com.