Now may not be the time to buy a home in South Florida, new data suggests.
Homes are getting more overpriced, and buyers might pay more than they can recover for years, according to Eli Beracha, professor of real estate and director of the Tibor and Sheila Hollo School of Real Estate at Florida International University.
“In some markets, recent buyers could be stuck for several years if prices level off or fall,” Beracha said. “If they’re buying at near peak prices and the market fizzles, they may have to stay in the homes a lot longer than planned in order to see even reasonable returns.”
Homes in South Florida were selling for 14.29% above their long-term pricing trends in August, according to an assessment released Tuesday by FIU and Florida Atlantic University. That was more than last month, when homes were overpriced by 13%.
The data indicates that prices are still rising, said Ken H. Johnson, real estate economist at FAU. But real estate agents say that’s precisely why people should buy now, with interest rates likely to rise and rents continuing to skyrocket in South Florida.
“If you wait to buy a home until prices come down, you could be waiting for three to five years paying higher rents than a potential mortgage would be,” said Brian Pearl, principal agent with the Pearl Antonacci Group in Boca Raton.
FAU looked at the largest 100 metro areas in the country to track their long-term price increases using data from Zillow, an online listing service, dating back to January 1996. Researchers studied single-family homes, townhomes and condos.
Surprisingly, 71 other metros were more overpriced than South Florida. Boise, Idaho, and Austin, Texas, took the top spots, with homes 80.66% and 55.26% higher than long-term norms.
Tampa, at 33.29%, and Fort Myers, 27.34%, also were more overpriced than South Florilda.
The situation still hasn’t reached levels of the 2008 housing crash, when homes were overpriced by at least 60%.
“We are nearing the peak of the housing cycle, though it could be six months from now; it could be a year from now,” Johnson said
