Anyone watching the Florida real estate market knows that demand is skyrocketing, but supply is dwindling. The lack of inventory has caused the prices of Florida Keys homes to increase accordingly and sending prices to record numbers, and this trend is being seen all throughout the state. According to Florida Realtors, in the month of July, the average Florida home cost was $360,000, a whopping 20% increase over the past year. Low mortgage rates, massive interest in Florida’s lifestyle driving demand, and the limited supply have all led to these raising prices.
Experts have been analyzing the market and its influencing factors and are reporting that things may be changing soon, and it all relates to covid. At the height of covid, the government stepped in to help homeowners having difficulty making their mortgage payments. Millions of Americans were able to put their mortgages into forbearance. In fact, four million homeowners across the country had put their mortgage into forbearance by May of 2020. The Mortgage Bankers Association has reported that as of August 2021 this number has dropped significantly to 1.6 million. Zillow has recently estimated that by the end of October 2021 another 850,000 homeowners will end their forbearance period. Also significant is the federal foreclosure moratorium that was lifted back in July.
So what does this have to do with housing supply in the Keys? As homeowners come out of forbearance, they will need to begin making payments on their mortgage. If they are unable to do so, they may be forced to sell their homes in the Keys. Since banks can now foreclose on properties, selling may be the only option left to struggling homeowners. This could lead to a great increase in homes for sale in the Fl Keys as a result. Market experts are tracking the correlation between forbearances ending and the supply of Florida real estate and we should soon be seeing the impact. It remains to be seen if this will stabilize the inflated prices.