There will always be periods of time when markets correct, re-adjust and re-balance. As we enter into a new year, we are in the midst of one of these moments right now. These corrections are a certainty of economic cycles and are often triggered by shocks (which we’ve had enough of in the past few years).
While market corrections are certain, how long they last is uncertain.
Uncertainty is scary for most, but it doesn’t have to be! Heading into 2023, we are keeping our eyes on these 7 long-term trends through this market correction:
1. Underbuilding. The US has under-built for a decade. Now as rates rise, builders are cutting production when they should be increasing it.
2. Next Generation Buyers. 130 million Millennials and Gen-Z-ers are just entering or have already entered household formation age.
3. Wealth Transfer. Over $10 trillion of wealth will be transferred in the next decade in the US alone.
4. Inflation. Even if inflation was at 2%, building new homes would still be more expensive.
5. More Buyers. Wealthier Baby Boomers are buying multiple homes, and private equity players are buying up homes traditionally bought by individuals.
6. Replacement. Repairing and replacing existing homes due to extreme weather and an aging housing stock are bound to use up lots of resources for building new homes.
7. Migration. Florida is the fastest growing state in the nation as many move here for better weather and tax advantages.
We know market corrections can be unnerving at times. During these times, steadfast resolve along with fast and decisive actions are required. Remember, markets are cyclical! Keep the focus on long-term investing rather than short-term trading.
If you haven’t started planning your 2023 real estate goals, now is the time to start. From country club communities to beachfront properties, South Florida real estate provides something for everyone. With over 50 years of combined experience, the Pam & Toni Team have navigated through various market cycles and have the expertise to guide you home. Whether you are looking to buy or sell in the New Year, reach out to us today to start the conversation!
To learn more about the local real estate market, the Pam & Toni Team and Compass, visit their website here.
This post is sponsored by the Pam & Toni Team.