The Honest Broker: Population Growth Affecting Current Housing Prices
BY: DIANE LOTT, BROKER
PARADISE FOUND REALTY
Florida’s population has continued to grow, but the rate of that growth has slowed modestly as deaths outpace births and the rush of people moving from other states during the pandemic subsides. According to a recent state report, with an estimated 22.25 million residents as of April 1, 2022, Florida continues to see population increases roughly equivalent to adding a city the size of Orlando each year.
For the past two years, Florida saw an increased number of people moving from states that maintained lockdown and health-safety measures longer than that of Florida because of the COVID-19 pandemic. However, the pandemic-driven migration from other states has slowed slightly, and according to the forecast, less people are moving out of the state than moving into the state. The resulting spike has been noted for the past two years. The new estimates put the state on pace to annually add 294,756 net new residents in the next five years, or 808 a day.
Therefore, the population growth has most certainly affected Florida’s housing prices due to the increased demand. The law of “Supply and Demand” is on full display. For the past couple of years, inventory has been low. Sellers have not been inclined to sell and were staying in their homes. The lack of homes on the market, the “supply”, had fallen behind the “demand”. The demand of new buyers and the competition among them for the same home, drove prices up. In some cases, tens of thousands of dollars above the original asking price. This propelled sellers to increase their asking prices higher and higher to take advantage of the demand.
However, the trends show that there are more homes hitting the market than in the past few years, the supply is going up. With the increase of supply, we have noted a stabilization of pricing. Although, home prices are still high, we are getting a glimpse of more price adjustments “downward”. Buyers are now experiencing less bidding wars. Unfortunately, they are now confronted by higher mortgage rates which are affecting their ability to afford the home they desire.
Diane Lott, Broker
Owner: Paradise Found Realty
Paradise Found Realty, Inc. of Palm City
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