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 in probably the worst housing affordability crisis 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. Rental markets in Miami are roughly 22 percent above their long-term premium. That makes that the most overpriced market in the country.”
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 having those affordability issues. But the question for me as a real estate professional is, ‘How does that translate into the housing market?’” Alfonso said. “There still is such a massive demand for the very little inventory that we have that that inventory still is going to fetch premium.”
Added Johnson: “We have a population influx that is even greater than before, even greater than 12 years ago, and more importantly, we have a huge inventory shortage this time around.”
As more people from other states move here, they’re competing with locals for the relatively few houses up for sale.
“We had that period of two years (since 2020) when interest rates were so low, and you also had so many people that were able to refinance. So now there’s a bunch of people that are sitting with very low mortgage payments that are like, ‘Why am I gonna sell? Where am I going to go?’” said Alfonso.
Johnson said the high prices don’t seem to be coming down any time soon.
“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 Miami metro,” he said. “There’s not an easy way out of this other than to build units and build them as quickly as we can.”
Copyright 2022 by WPLG Local10.com – All rights reserved.