The past two years have been anything but the usual. Thankfully, the return to normal started in 2021–and the hope is that trend continues into this year. According to Morgan Stanley’s 2022 Economic Forecast, “2022 will be a critical year in which the imbalances wrought by the pandemic will likely begin to resolve and the business cycle normalizes.”
While the Boca Raton real estate market has been particularly “hot” recently, it has been stable over the last quarter. Both single-family homes for sale and single-family homes sold in Palm Beach county have remained at steady levels. The average sales-price to list-price ratio for Q4 2021 was 97%, which means that market demand in the area is steadily supporting the home price increases we have seen over the past two years.
Now, we know these price escalations have left homeowners and potential buyers nervous. Looking purely at supply-demand ratios, under-building of millions of homes across the U.S. combined with the massive increase in wealth amongst the wealthy should support this pricing for some time. Even more so in markets like Boca Raton where many of the buyers are brand new to Florida in the past two years.
A vast majority of these buyers are relocating from higher cost states where Florida’s pricing appears relatively affordable and there is no state income tax. With higher incomes and home price expectations, these buyers are willing and able to pay up. South Florida had not planned increased supply for this new demand.
In 2022, there are various new communities coming to market in the Boca Raton and greater Palm Beach County area, and interest rates are expected to rise. Both of these factors should further stabilize the real estate market. However, Florida remains very desirable to both out-of-state and international buyers looking for warm weather and lower taxes.
What are your real estate goals for 2022? The Pam & Toni Team is here to help. Contact them today to talk about this historic and unprecedented market. If you’d like to see more blog posts about Boca’s real estate market, you can check out their website here.
The Pam & Toni Team
Pam Thomes, Toni Valentino and Teri Jacobsen
This post is sponsored by the Pam & Toni Team.