Vacation homes have been one of the hottest sectors in the real estate market for the past several years throughout the pandemic. Of course, there is no better example of a red-hot vacation home market than here in South Florida. As we have discussed in various articles, perhaps the biggest factor in this market has been the popularity of the virtual workspace. With many Americans working virtually from home, a vacation home has become more of a reasonable option for many working-aged Americans. No longer is it merely retirees purchasing seasonal or vacation homes in South Florida. Is this market beginning to cool off though?
Two in a row
For starters, sales of vacation homes are still 13% higher than they were before the pandemic. With this said, the demand for vacation homes has dropped considerably for two straight months. In addition to higher sale prices, rising mortgage rates and and an increase in loan fees for second homes are prompting a slowdown in the sector. With regards to increased loan fees for second homes, buyers obtaining a loan can expect to pay 1% – 4% more as of April 1, 2022. For example, if buying a $400,000 home this change could result in paying approximately $13,500 more than before.
Although we are starting to see a slowdown in the vacation home market, most economists expect demand to remain higher than pre-pandemic levels. A major reason for this is the continual growth of remote work. Throughout South Florida we are seeing many buyers finding their slice of paradise to work from remotely for part of the year, at least. We have discussed the many reasons to move to South Florida in previous articles and these should continue to apply moving forward. Are you considering a vacation home in South Florida? We have helped many buyers realize their dreams and can do the same for you.
At Live South Florida Realty, Inc. we have assisted many clients with their real estate needs. Are you looking to buy or sell a property in South Florida? Now more than ever, it is critical to have a qualified real estate team and the proper search tools behind you. Live South Florida Realty, Inc., has been a leader in the South Florida market for many years. Let our team of professionals assist you with buying or selling your piece of paradise today! In addition, our recently launched “Florida Home Search” app is now available on the Apple App Store and Google Play Store. With real-time MLS feeds, this app lets you set your own alerts to notify you as soon as a property meeting your needs hits the market. Furthermore, it will also let you know of recent closed sales in your area so that you may be even more educated on the market. Be sure to download this app for your smartphone or tablet today!