The market slowed a bit nationally, but not in S. Fla., which is seeing slower, yet positive home value gains. About 2 out of 3 homeowners (65.3%) are “equity rich.”
MIAMI – Homeowners across South Florida are seeing equity gains in their homes, despite the national housing market slowing down.
About 65.3% of residential properties with a mortgage in South Florida are considered “equity rich,” in the first quarter of this year, according to a report from ATTOM Data, a provider of nationwide property data.
To find how many properties were still building equity, researchers looked at mortgaged residential properties in the area with different levels of loan-to-value ratios. For a property to be “equity rich,” the combined estimated loan amount was no more than 50% of their estimated market value, meaning that the owner had at least 50% equity.
The data shows a steady uptick from the prior two quarters in the tri-county area: For the fourth quarter of 2022, about 64.5% of homes were equity rich, and in the third quarter of 2022, about 63% of homes were equity rich.
Here is a breakdown by county:
South Florida’s continued rise in equity can be attributed to its population growth, as out-of-state buyers have flocked to the area, fleeing larger metropolitan areas with higher housing costs.
“Our population growth is keeping our real estate values up because people are just eating through whatever limited amount of inventory we have left,” said Whitney Dutton with the Dutton Group in downtown Fort Lauderdale. “When they sell their house for a million and see what they can get down here for a million, they say, ‘I’ll take it, since it’s more house than what I am used to. They bump up the resale value of homes.”
On a national level, however, there were small decreases in the amount of homes that could be considered “equity-rich,” the report noted. In the first quarter of 2023, about 47.2% of homes with a mortgage were equity-rich, a slight decrease from the previous quarter when about 48% were equity-rich.
“The equity downturn, small as it was, stood as the latest indicator of how a decline in home prices across much of the country has started to affect homeowners following a decade-long market boom. It comes as home-seller profits have slid to their lowest point in two years,” the report noted.
For South Florida, it’s unlikely that equity gains will decrease as the market is still projected to see increases over the next year.
“We may see a 3-5% bump in property values in the next year, so that will affect equity. We won’t see the double digits we saw over the past few years, but price increases will be more stabilized,” added Dutton. “The southeast of the country is projected to be one of the hottest places in terms of population growth, and people need a place to live. They are going to continue to buy real estate here.”
© 2023 South Florida Sun-Sentinel. Distributed by Tribune Content Agency, LLC.
©Florida Realtors®
Source link
