Real estate has always been a great way to diversify your investments while also supplementing your income. However, a recent analysis from 2020 shows an even more impressive return. According to the U.S. Census Bureau, the average full-time worker earned about $50,000 before taxes. By comparison, the home value index climbed 19.6% in 2021 to $321,634, which is equivalent to a $52,667 year-over-year gain. In other words, the dollar growth for a typical home value surpassed the inflation-adjusted median pretax income!
Headwinds for first-time homebuyers
As has been well chronicled, many homes listed for sale in this market are selling in bidding wars. Needless to say, the majority of buyers that are winning these bidding wars typically are buyers with higher incomes or have the equity from their previous home that they’re able to put forward. Needless to say, this is creating significant challenges for first-time home buyers. Of course, the continued tight housing inventory is also driving up prices while making the market even more competitive. The National Association of Realtors® estimates that the inventory of listed homes hit a record low in January 2021; at the same time, Realtor.com calculates that the median listing price reached an all-time high of $392,000 in February.
Summary
This is the first time that the annual nationwide dollar growth for a typical home value surpassed the inflation-adjusted median pretax income. In hot markets such as South Florida, this continues to be the case. With a record number of Americans relocating to The Sunshine State, we expect the demand for housing to remain extremely strong. If you are considering a real estate investment property, South Florida should be on your short list.
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!
