MIAMI – The housing and rental market has been hit extremely hard as inflation concerns rise across the nation.
Real estate economist Ken H. Johnson says South Florida homes are overvalued.
“We are definitely and probably the worst housing affordability prices that we’ve seen in Miami in the last 40 years,” said Johnson. “Miami metro, which is all the way up through Palm Beach County, is pricing out at roughly 30 percent above this long-term pricing trip, so that’s a rather large number but not as big as it was back in 2007, we reach the peak of the last time I was in cycle when that number came in and around 79 percent.
“Rental markets in Miami are roughly 22 percent above their long-term premium, and that’s not 22 versus 30 percent is not the real comparison, but that makes that the most overpriced market in the country at this point in time.”
Couple that with the price of just about everything going up.
“Inflation, higher gas prices, higher food prices, higher materials labor, all these are putting a crunch on the individual family budget,” Johnson said.
Jonathan Alfonso runs Portal Real Estate and his own YouTube channel, doling out advice to his online viewers.
“A lot of people are being pushed to the brink right and they are definitely having affordability issues, but the question for me as a real estate professional is how does that translate into the housing market because at the end of the day, they still have such a massive demand for the very little inventory that we have that that inventory still going to fetch premium,” Alfonso said. “Somebody from New York who is used to paying $6000 for a studio, come down here and I have a two bedroom with a water view and I have like all this nightlife near me where I get to party and hang out and shorts? I’ll take that!”
Added Johnson: “This time around we have a population influx even greater than or even greater than 12 years ago and more importantly we have a huge inventory shortage This time around.”
There is an influx of people moving in, competing with locals for the relatively few houses up for sale.
“We had that period of two years when interest rates are so low, and you also had so many people that were able to refinance our properties are very historic closed, so now there’s a bunch of people that are sitting with very low mortgage payments are like why am I gonna sell where am I going to go,” said Alfonso.
Said Johnson: “So what looks more likely is that we’re going to go into a prolonged period of unaffordable housing either to own or rent in the in Miami metro, Miami-Dade, Broward and Palm Beach County. So there’s not much easy way out of this other than to build units and do that as quickly as we can.”
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