I hear lots of predictions and opinions about what is happening or going to happen in the housing market, but seen very little evidence to support those claims. Changes in the housing market are very subtle. Trends occur over multiple months or even years and need to be looked at in a historical context. Here in Pinellas County, our local multiple listing service provides us trend data on every aspect of the real estate market and while there are sometimes minor adjustments, usually changes in the housing market are very gradual.
Aren’t home prices really high? Home prices are definitely strong – a great thing for sellers. Are they going to dramatically drop in the near future? No, this is highly unlikely. In fact, because interest rates are at near historic lows, waiting for prices to drop is probably not a good plan.
Case in point – A home price today at $400,000 is purchased by a conventional homebuyer that puts 20% down ($80,000) and obtains a loan at a rate of 4.5% will have a payment of roughly $1,621. That same home, if it were to drop $40,000 and the buyer still puts 20% down ($72,000) with a loan rate of 6% will have a monthly payment of roughly $1,726.
Pinellas county is an extremely attractive place to vacation and live. Florida continues to be one of the nation’s fastest growing states and we continue to outpace the nation in economic growth.