Real estate experts explain why housing hot spots are still scorching
FL, TX, AZ real estate experts detail strong markets despite inventory, rate concerns
Real estate agents advise homebuyers, sellers ‘strike while the iron is hot’
Texas REALTORS Chairman Marcus Phipps and Arizona REALTORS Vice President Sindy Ready speak with FOX News Digital about hot trends in their housing markets and share their best advice for Americans who may want to buy or sell a home.
If you’ve been considering making a move to popular Sun Belt states like Florida, Texas and Arizona, you’re certainly not alone.
Real estate industry leaders from those three markets report that business has not slowed down for their firms, pushing back against analysts who warn there’s a U.S. housing stalemate.
"Only California has more residents than Texas does at this point, and we're the second state to have over 30 million residents. Certainly in the last three years, we've seen more and more sales in each of those last three years, with a slight decline in 2022. But even despite that, Texas real estate market remains incredibly strong, especially compared to pre-pandemic numbers," Texas broker and National Association of Realtors member Marcus Phipps told FOX News Digital.
"High tech has really found Arizona and the value of our market," Phoenix and Scottsdale generational realtor Sindy Ready also told Digital. "We have a Taiwanese chip plant going in up in the north end of town. Intel is adding two plants down in the southeast end of our valley. There's Amazon, Google and just all kinds of support companies that are helping these chip plants build their products. And so the demand for people moving into the market just in the business segment has been huge."
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Founder of Lucas Realty Group in St. Petersburg, Florida, Karen Lucas, added that she sees a constant flow of new residents coming from states like New York, Massachusetts and California.
Three real estate agents in Texas, Arizona and Florida, respectively, talked to FOX News Digital about similar trends they’re seeing across their markets that continue to boom amid a pricey economy. (Fox News)
"They all just wanted to get out of the misery of what they were going to during COVID there, and saw that even though we were abiding by rules, the weather was nicer, you could be in the outdoors more. It was just an easier lifestyle," Lucas said. "Why be in miserable weather if you don't need to be? And such an influx of people, it's pretty amazing."
Data last month from Zillow revealed that Florida became the second-most-valuable residential real estate market in the country, behind California. Texas came in at fourth place, and Zillow data separately ranks Phoenix, Arizona, ninth across America for new home listings in August.
Additionally, four out of the top six city markets that gained the most value since the start of the pandemic are in Florida: Tampa, Miami, Jacksonville and Orlando.
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While all three agents mentioned more residents moving to their states for better cost and quality of living, there’s still a widespread lack of inventory that’s squeezing prices.
"Buyers are looking for quality in a property and great value for their dollars, and they are willing to pay for that quality. Flippers are still looking for the deals, of course, but most buyers who are going to live in that house, they want that house ready to go," Phipps said.
"Other people that may come from other states are a little shellshocked as the prices have gone up pretty dramatically in the last few years. We had 30% increase for two years in a row, which is highly unusual," Florida-based Lucas noted. "Now the pricing has calmed down a little bit, we're getting back to our average 3% a year increase, but it's still a healthy market, just so low inventory here. So when people start looking, they realize that there's not that much out there to choose from… But the properties that are really looking pristine are the ones that go very quickly."
A view of downtown Fort Worth, Texas. | iStock
"Many just want to buy and get into the market early on. The difficulty there is the inventory. So in that market segment, people are coming in and looking for a basic home for themselves or their family. Those houses, the supply and demand on that has been really limited," Ready said. "And just like you would in Florida, we have a huge demand for second homeownership or third homeownership of people that want a resort-style area to live in."
While clients in all three markets do voice concerns about high interest and mortgage rates, the respective agents all encouraged getting a "little creative" and being open to refinancing in the future.
Mortgage rates are hovering around 8%.
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"Prices are gonna keep going up and you can refinance later. Yes, those interest payments are a little strong right now. You can look at doing a buy-down on your interest rate to make that payment a little more affordable. But because the Texas real estate market is so strong because people continue to move to Texas, prices are going to continue to go up," Phipps pointed out. "So you need to strike while the iron is hot. Take that opportunity to buy. When you ask a real estate broker, any relator, the best time to buy is today, or three years ago. But we're going to say today because tomorrow the price is going to be even higher."
"I will tell you that my first house was 14% interest and the builder brought it down, because it was a newbuild, to 12%. And we were all excited when we got to refinance to 10%. So people still buy in these markets," Ready argued. "We can always ask the seller to pay some of the fees to buy down their interest rate for them. And so I recommend to my sellers to be prepared for that, that they may have to pay one-and-a-half to 2% of the purchase price toward the buyer's closing costs to help them buy down their interest rate so that they're more interested in buying that house versus another home on the market."
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"Between the mortgage, the taxes and the insurance, it becomes a lot more expensive monthly to live on. So some people have had to go down a little in price range... And it's a little bit of a struggle for them because they felt they could afford this much a year ago and now they're seeing the same houses are almost $100,000 more now," Lucas said. "We try to tell them and we're trying to educate them, buy it at the rate it is now, they feel the rates could go down, and then when the rates start going down, refinance it then… I think nowadays buyers are so, I want to say the word spoiled, that interest rates are 4 to 5%. When I bought my first house, of course it's a long time ago, but my rate, I think I paid 12%."
Despite inventory and rate pressures, all three agents feel like the American homeowner’s dream still lives on in their individual markets.
"It's a hunt and you just have to be willing to go to battle on it and have the right support around you with a good team," Ready encouraged. "Be patient and don't give up. That's the biggest piece of advice for the buyers. And then from the seller [perspective], it's just to really be proud of your home and set yourself up by success. You don't have to spend a lot of money to prep your house, but if it's not looking clean or it has too much clutter and people can't really see the floor plan, or the landscaping needs to be trimmed, people start whacking off tens of thousands of dollars because they then perceive they have to do a lot of work in a home."
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"I do see that as prices have gone up, they are struggling to try and save enough for down payments and things like that. But I do know that American dream is still achievable," Phipps said. "People work hard, they earn their money, they save their money, they get out there and they can buy. But those struggles have become real, especially for those younger, first time buyers who don't have that cash equity coming out of another property to buy something that's going to work for them as they look forward."
"So many [clients] come down and they're worried about mold and they're worried about termites. And I really want to explain all that to them, things like that are something to be concerned about… And some of it is true, but it's exaggerated or it's not exactly facts," Lucas noted. "I just try to give them as much information as I can or give them someone to talk to about that, that's an expert in that area that can help them ease their minds or at least give them the right information so that they can make a better decision for themselves. So it's not just about real estate. It's got a lot more to do with just their whole lifestyle and what to expect here when you live here."
