The Truth About the Southwest Florida Housing Market: Why a Correction is Good for Homebuyers

Posted by Jordan Smith on July 23, 2022

Congratulations, you were a recipient of our nation’s historically low interest rates

What's your prize? A spectacular mortgage, property you can call your own, and passive wealth generation (home equity).

The housing craze surrounding our Southwest Florida market is fresh in our minds, but the never-ending party is beginning to settle down. Each week the music is becoming softer, and with it, the partygoers (buyers) diminishing.

I’m a talking about a crash!

Just kidding 😉 but if even if I’m wrong… The only thing that changes after you own your home is the way you feel.

You’ll have a sense of pride and ownership that you never knew was possible. You’ll have a home that’s yours and yours alone, with no one to answer to except for yourself. You’ll be able to make all the decisions about how it looks and feels, from what color paint goes on the walls (and where) to whether you want a dog (and if so, how many).

And then there’s all of the other stuff—the stuff that really doesn’t change at all.

Your payment is not going to change (unless you decide to refinance), which means the insurance, PMI, taxes—everything stays exactly the same. Your neighbors won’t change either—after all, it’s still the same house, in the same location, in the same school district, in the same neighborhood that you fell in love with!

What’s actually happening?

What’s actually happening is a correction, and it should be seen as a positive thing. It will result in a more sustainable community by reducing speculation, which has been driving up prices and making it difficult for many families to afford homes.

A housing market correction (in this instance) is when there are more houses for sale than there are buyers, which results in a decline in prices. When this happens, you may feel like all hope is lost because your house isn’t selling, or its equity is decreasing. But it’s actually good news!

Why?

Because it means there are fewer people buying homes simply to flip them, or to rent them out at inflated prices. When you’re buying a house just because you think you can make money off it quickly (rather than because it meets your needs), massive bubbles can form—and when those bubbles burst, they can cause serious damage.

Investor pressure is exacerbated by another trend: the phenomenon known as “excess inventory,” or houses sitting empty because they’re too expensive for most people to buy or rent. This means that many people who would like to live in these houses are priced out of the market entirely—and even those who do manage to buy are often paying far more than they can afford.

The real estate market in our city has been on a tear for years, and it’s had some negative effects. We need to shift toward a more sustainable community where people live where they want to, not where they have to!

Thank you for reading. I hope you enjoyed it 😀

Home ownership is a part of the American dream, and i'm honored to be a part of it.

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