NH couple head for Key West haven amid rising rates, rising inflation
On 'American Dream Home,' one couple buy a home in Key West, Florida, amid rising inflation, low inventory and rising rates
'American Dream Home': Key West, Florida
Fox Business host Cheryl Casone joins Doug and Teresa on their quest to find their dream home in Key West, Florida.
Right now the front pages of newspapers and kitchen-table discussions across America are focused on real estate.
Similar to what occurs in the stock market, real estate prices vary — and many agents, brokers and investors are seeing the writing on the wall.
The markets are changing.
Let’s take a look at Florida, where we took our viewers this week as we followed one couple, Doug and Teresa, as they left chilly New Hampshire for sunny Key West.
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The Florida Realtors Association (FRA) notes that rising inflation, low inventory and rising rates are having an impact.
Christina Pappas, the president of FRA, said, "Households everywhere are feeling the pinch of high inflation."
In Florida, the median time to get to contract for a single-family existing home last month was nine days — same as May 2021. (iStock / iStock)
"Homebuyers are also facing the challenges of rising interest rates and tight inventory of for-sale homes, causing some to hit the pause button on their plans," she added.
Still, she pointed out, the median time to contract for a single-family existing home last month was nine days, the same as May 2021.
The real estate market is cooling, but not collapsing, said one real-estate insider.
Condos and townhomes are at 10 days, compared to 19 days in 2021.
Last month, closed sales of single-family homes statewide totaled 28,861, down 6.9% year over year, while existing condo-townhouse sales totaled 13,265, down 14.4% from May 2021, according to data from Florida Realtors Research Department in partnership with local Realtor boards and associations.
Ryan Payne of Payne Capital Management said the real estate market is cooling, but not collapsing.
This aerial drone photo shows a scenic view of Key West, Florida.
"Mortgage payments have jumped by about 50%, with interest rates up around 6% from only 3% just 12 months ago," he said.
"Given the substantial rise in carrying cost for home buyers, realistically we have most likely seen peak real estate prices. Housing price growth rates should slow considerably," he added.
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Payne also addressed the low inventory issue.
"The combination of low new construction and strong millennial demand will keep home prices firm," he said.
"We will most likely see a softening in home values during the second half of the year — that is, only a minor correction in residential real estate prices."
Cheryl Casone is host of "American Dream Home," where airs every Wednesday evening at 9 p.m. ET on FOX Business Network (Fox News / Fox News)
Karen Sharpe of the Florida Bankers Association told me that "the [Florida] market remains strong. However, the inventory is low — so there is not as much activity as there had been."
"If a property is priced right and is in good shape," she said, "it is moving quickly and at full list price. Many of the purchases are cash closings … Some of them are subsequently getting financing as they feel rates are still relatively low."
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"American Dream Home" airs Wednesday evenings at 9 p.m. ET on FOX Business Network.