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This time of the year we get a lot of people asking, “What do you see for the real estate market in 2022?” The answer is UP! Here are 10 reasons why.
10. The Wild Southeast is Settled
From 1980-2020 the population in Palm Beach County according to the US Census rose from 576,578 to 1,492,191. It basically tripled. Jupiter increased 7-fold from 9,868 to 61,047. Everyone who came was a pioneer and while there was peace and quiet, they sacrificed lots in culture, restaurants, shopping, and for those that worked here, job opportunities. Most of the area today east of I95/Turnpike is now settled. There is no land left. Alton and Artistry are the only big parcels left to finish building. There hasn’t been a country club start since 2006 and Jupiter Country Club finished off its last new construction in 2019. There will be more available west of the I95/Turnpike, Martin County, and small pocket developments. However, the Wild Southeast Settlement is over.
9. Baby Boomers
Boomers Range from 57-75. There still is plenty of supply of Boomers to come down. As they do, they introduce more of their family and friends to the area. As a sidenote, much of Gen X and Millennials are now purchasing earlier in South Florida.
8. Supply & Demand
Inventory coming into season is insane. Single family home inventory stood at 1,083 in the Northern Palm Beaches as of 12-1-21. That’s a 48.5% drop from 2101 homes a year earlier. And inventory is less than a third today of where it was at when 3444 SFH were on the market in 12-1-19. The townhouse and condo market is even crazier. 881 units today versus 2,680 units a year ago. The medium price of a SFH in $367,500 versus $559,500 from 12-1-19 to 12-1-21. But it goes back to the population demand and no supply of new homes. We are entering season with virtually no inventory.
7. Low Interest Rates
While many of the transactions are cash, low rates are still keeping the financing portion of the demand affordable and moving. Plus, inflation is going up at a higher rate than interest rate jumps making it even more appealing.
Inflation moved up 6.8% in November 2021. Housing prices should naturally move up the same amount even if supply and demand equaled each other out. Meaning inflation will naturally carry some rise in prices.
From the Maltz Theatre to Trader Joes to Whole Foods to Starbucks on every corner. 20 years ago, the Northern Palm Beaches was missing shopping, dining, and the some of the arts. With the great population growth, that has changed, and it makes it more comfortable for people from cities to move here.
4. Infrastructure of family and friends
Today, most people have a relative or friend in the area versus 20-40 years ago, when they were the pioneer. It’s easier to move if Mom and Dad or friends are already based here. More family and friends based here equals a direct jump of more population to the region.
Dreaming of South Florida has become more of a reality to most because of Covid. The ability to work out of the house with Zoom and life surroundings have more importance has led many to making decisions that were only dreamed of years down the line. Its not just the computer programmer entrepreneur who can live where they want today.
2. Wall Street South
Hedge fund and other financial entities are moving to South Florida. This means more jobs. 0% taxes and the Florida sunny lifestyle are draws and younger people are wanting to take advantage of now rather than wait. Many company owners have moved here. Watch a lot of employees to follow.
1. The Canadians
Our region is a big draw for folks from Montreal and Toronto. That mixed with movement from South Americans moving north from Miami is another piece of demand we didn’t have last year since they missed the season.
1. Under Pricing and Under Marketing
The absolute worst thing a Seller can do right now is sell privately. Could you imagine selling a piece of artwork privately to a neighbor? You get the best price by letting the world know and creating a bidding war at auction. Sellers are getting lazy. Slow the process down. Stage it, market it, work it. We’ve seen Sellers sell it as a pocket listing and sometimes leave 15-20% on the table.
We train our buyers to act with urgency. Offers need to be made immediately and with short acceptance periods. You have to be paranoid that someone is going to come in behind your back and outbid you. If you see a home at 11am, make the offer good until 5pm. Oftentimes, Buyer agents give 24 hours. If you are using the AS IS contract, it gives you a free right to cancel at your sole discretion and all deposits returned. A buyer not understanding the power of the AS-IS as a free option to cancel is a serious mistake.
Sellers don’t want to stage because it takes work. However, it can increase the value over 10%. Some are small things like a ratty doormat or plain doorbell. Others are strategic placement of furniture so one can visualize the view and space when coming in from the front door. Landscaping, an organized master closet, and less is more are key concepts.
Both Buyer and Seller should always demand a written inventory of what is included in the sale. We always have our Sellers do this when we take the listing. It can be a pain to do but more deals are lost while tracking someone down when the Buyer is in love. It’s best for Sellers to always add a cost to the purpose price for furniture in case the buyer doesn’t want it . Last, there is no misconceptions at the closing tale with a written inventory.
Sellers should always do this. A buyer is going to get a 100-page boilerplate inspection report and that causes anxiety immediately. There almost always are GFC outlets that aren’t working properly, AC differential and sliding doors that don’t close properly. Then you have surprises like mold or unbonded floor tile. The more you can make a Buyer feel like they are buying new construction with less on the inspection list, the better the chance of offers coming in higher, less cancellation risk, and less demand to fix something with the most expensive contractor under the sun.
Jeff Lichtenstein is the president and owner of Echo Fine Properties, a luxury real estate brokerage selling real estate in Jupiter and homes in Palm Beach Gardens, Florida. He has 20 years of real estate experience, has closed over a 1,000 transactions, and manages over 50 agents in a non-traditional model of real estate that mimics a traditional business model. Some publications he has been quoted in.
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Echo Fine Properties, winner of Best Brokerage of the Palm Beaches in both 2020 and 2021, is located in Palm Beach Gardens, Florida. We are a family-owned local brokerage that prides itself on having the finest full time luxury real estate agents who know the area backward and forward. Each agent is hand selected to join us for their knowledge of the area including golf club communities, gated communities, equestrian and ranch estates, condominiums, and waterfront and boating estates. Echo is unique in real estate in that our company pays for all marketing, advertising, and all support which is handled in-house. WE PAY, which lets the agent concentrate on our customers. Unlike other firms, agents never have to compromise the marketing budget. Our Home ECHOnomics Guarantee offers an unheard of 57-promises. This website consists of 5 separate MLS feeds, giving 100% accuracy ranging from Miami to Fort Lauderdale to Palm Beach to Martin County.
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