In recent years, Florida has gained an impressive across-the-board reputation. It now leads the way in attracting new residents from all over the country. The United States Census Bureau noted this in its 2020 census when it designated Florida as the third fastest-growing state in the union. Since then, the influx of people wanting to enjoy Florida's beautiful shorelines, its magnificent tropical vegetation, and other attractions across the state has only increased.
What this means for Florida's housing sector is that it remains one of the country's hottest in buying/selling activity. With no signs of letting up anytime soon, it's safe to say real estate is booming in Florida. The reasons for this continuing trend are many. Floridians love that their home state doesn't collect a state income tax. This money-saving benefit, along with a robust economy and continually expanding job sectors, mean residents have more disposable income to enjoy all the features their state offers.
It's a daunting task to list all of Florida's amenities. Everyone enjoys the state's year-round sunshine and warm temperatures. People who love an active lifestyle flock to the region for its many beaches, water adventures, and other outdoor activities such as golf, tennis, pickleball, and more. Investors love the state as well. They know any capital they put into the region will likely reap a substantive return on their investment.
With its sugar-sand beaches, breathtaking sunrises, and highly desirable Palm Beach County location, Boca Raton is one of the premier jewels inhabiting Florida's east coast. Boca Raton offers the quintessential upscale beach lifestyle, artfully blending blissful relaxation with sophistication. Trendy restaurants and urbane designer shops are located across the area. One notable location is the renowned Mizner Park. This beautiful landmark featuring Mediterranean architecture is also home to the Boca Raton Museum of Art and an outdoor amphitheater known for its fabulous summer concerts.
Sun lovers bestow plenty of accolades on the city. Boca Raton is known for its sun-drenched Red Reef Park. The beach park encompasses 67 acres of sparkling coastline and is sometimes called the area's best-kept secret. Locals rave about the park's surf fishing and snorkeling, and it's an easy swim to the nearby reef.
As might be expected, the estates in Boca Raton are truly remarkable. With beautifully manicured lawns featuring a stunning array of tropical vegetation, each luxury residence is a masterpiece in its own right. Various architectural styles are well represented throughout the locale, including contemporary, Italian, Mediterranean, mid-century modern, and more.
Boca Raton housing market forecast in 2023
As of early fall, compared to many other parts of the nation, the residential housing sector in Boca Raton remains a net positive overall. The area is continuing to enjoy encouraging signs in the job market as well as growth in the population. The one uncertain factor that may come into play as 2023 advances is mortgage interest rates. While pundits speculate the Fed will opt not to raise rates in the current season, whether they hold that position for the rest of the year remains uncertain.
According to the National Association of REALTORS®, in Palm Beach County, the median home value was $524,918 in the first quarter of 2023. This figure is shared by only 10.4% of the counties in the nation. The overwhelming majority in the country, approximately 85.7%, have a home value of less than $350,000. This leaves only 4% with a property value of more than $550,000.
It's difficult to create a fair portrait of real estate trends when comparing 2023’s property values to the prior year. While the market has moderated somewhat, mainly because of the increase in financing costs, the frenetic pace in the industry before 2023 was not necessarily an accurate reflection of "normal" trends in home values. Boca Raton homeowners may not see as rapid an increase in the value of their residence as they did in recent years. However, they can still expect to experience higher-than-average increases that have since faded in many other parts of the country.
For those interested in selling a property, the numbers are encouraging. The residential median list price is currently $1,299,999, representing a 4.0% increase from last month. The median list price for those interested in selling land is only $2,872,500. This represents an increase of 4.45% from the previous month.
Interest rates have been rising
Financing costs have been rising for quite some time. Currently, the average mortgage lending rate is around 7.2%. Just two years ago, the average for a 30-year mortgage was a negligible 3.168%. The near doubling of the percentage in such a short period is likely the only factor that will have a moderating influence on the Boca Raton real estate market. Even so, other significant parts of the country are experiencing declining populations in terms of residents and businesses, adversely affecting the housing industry. Overall, in comparison, homeowners in Boca Raton can expect to be one of the groups least affected by rising interest rates.
From an unconventional point of view, certain buyers can see some benefit from higher financing costs. In general, rising mortgage rates tend to create a buyer's market even as the climate becomes more challenging for sellers. The exception to this is first-time homebuyers. It's very challenging for many first-time buyers to afford the much larger mortgage payments that go hand-in-hand with high rates. However, second- and third-time owners typically have a much larger down payment. Their substantial down payment greatly decreases the amount they need to borrow, making rising financing costs less of an issue for them. People with a large down payment will likely appreciate the greater selection of houses available for sale and the less frenetic pace of the bidding wars that occurred in the not-too-recent past.
Investing indicators will favor landlords
Due to the immense popularity of the area and the continuing demand for housing, landlords can expect favorable conditions to remain for some time. Indirectly, rising interest rates also benefit landlords, mainly due to first-time homebuyers, who find the combination of increased financing costs and rising property values too challenging.
Investors who can pay cash for properties have a clear path ahead as changes in mortgage rates don't affect them, except in an indirect way as home prices moderate. In addition, they should be able to command higher-than-average monthly rental fees compared to other parts of the country experiencing population declines.
The premier experts in the Boca Raton real estate market
Locating or selling a beautiful property is all about connecting with the right professionals. Only premier real estate agents, such as the team members of George Khoury, know how to ask the right questions to deliver extraordinary results.
The George Khoury Luxury Real Estate team expertly handles all the many details associated with complex real estate transactions. This frees buyers and sellers to focus on the next chapter of their lives, whether moving into their new dream home or their next adventure.
When you're ready to learn more about one of the hottest markets in the country, get in touch with the George Khoury team of professionals.