June 2016 H OUSING N EWS R EPORT
MY TAKE By Alex Villacorta, Ph.D. Vice President, Research & Analytics, Clear Capital
Baby Boomers and Florida Real Estate: Why Understanding Local Market Nuances is the Key to the Future of the Housing Industry
point of this regionalized analysis is emerging in Florida. While much of the market recovery news has focused on the West as markets like Seattle, Denver, and San Francisco continue to reach all-time market highs, Florida has emerged as a southeastern hotspot for market recovery. The Sunshine State was one of the markets hit hardest during the crash, with prices in Miami and Orlando eventually falling upwards of 65 percent below the market peak of 2006 (See Graph 1). But today, the state’s largest housing markets — Miami, Orlando, Tampa, and Jacksonville — are four of the top 15 highest performing metro markets in the nation, all reporting at least 1.6 to 2.0 percent price growth over the last quarter. The spring 2016 market trends in the state are a definite cause for optimism in the region, in an otherwise tepid national spring home buying season. Continuing a trend that has brought each market price increases of at least 9.5 percent over the last year, these most recent growth figures fit into a longer term pattern of recovery for the state’s major markets. Both Tampa and Miami are now reporting home values at least 55 percent higher than the lows of 2011, while the Jacksonville and Orlando metro areas are each reporting price increases of
With a national housing market still trying to find its identity in a post-crash climate, one constant in all this uncertainty has been that local housing markets are exhibiting a degree of uniqueness not seen in the pre-boom days. The new “normal” is a market that truly cannot be generalized across the entire nation, but rather is largely defined by the local
inventory and economic environments. The interaction of market drivers for price growth, or decline, are increasingly unique to local areas in a manner that is very different than in housing market history. Of course, practitioners will say that real estate has always been local, after all the three main tenets of real estate emphasize this very point. While this is certainly a true statement, the assessment of market health for lenders, investors, and consumers is a key activity that has historically relied on gross generalizations of home prices at large scales. In reality, today’s market drivers are a nuanced mix of macro-, micro-, and hyper local-economic factors. Understanding of these factors is key to successfully measuring and planning for the future of the housing market. A very interesting case-in-
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SOURCE: Clear Capital
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