Living in NW Florida – The Results of Recent Change

So, you're coming to visit or you're thinking about moving out here to Northwest Florida in our area, and you're wondering, what has changed in the last year? Is it still worth coming out this way? Are we still considered moving out? Well, in this video, we're going to cover what has changed, recent changes over the past year in 2021.

Alright. Let's talk about the recent changes here in Northwest Florida. So, what do we call Northwest Florida? Well, here the locals will call it the Emerald Coast because of that Emerald Water, that green water all throughout the coast, and of course, those beautiful, beautiful white sand beaches. The Emerald Coast consist of up here in Northwest Florida, anywhere from Pensacola to Panama City, Panama City Beach. So, why do people move to this area typically? Well, it's usually because of those beaches, because of the atmosphere. You just can't be having those pristine beaches without having condo city right there. It's flanked mostly by some forest and not a whole lot of stuff around it for the most part. Of course, the weather is not dreadfully hot, but it's not super cold either. We do have a couple of months that it does get a little bit chilly down to, like, the 40’s or 50’s. But for the most part, it's very very comfortable. Of course, the humidity does make a little bit warmer a little bit colder, but overall just wonderful. And of course, you have fantastic boating and fishing world class is what they call it here, and lots, lots of great opportunities for that. And of course, a great community. One thing I can't say enough about our community is we have just a good mix here in Northwest Florida. We've got four or five military installations just around our area. So, we get a lot of diverse people from all over the place. That's also mixed with the people from Georgia and Alabama, that kind of southern hospitality just seems to really encompass this area. And not only that, we're also Floridians, so we have that going for us as well. That mix in itself just, just as a great community overall.

So, let's talk about what changed. Hey Tim, what has changed? Well, let's talk about four things. One thing, number one is the Housing Market, two of course, COVID we can't not talk about that one. The Job Market has changed, and of course, Investments have as well.

1. HOUSING MARKET

So, let's get into number one, the housing market. So, Florida, in the entire state of Florida, our appreciation, now normal appreciation that we've seen across the board is typically 3 to 4% per year. So, if you bought a home and whatever you purchase that home at, then it should be worth 3 to 4% more the next year. That's appreciation. Well, it got a little crazy down here in Florida with everybody seeming to move into this area that it actually went up 20.84%. And, that's from neighborhoodscout, if you want to look up that data, neighborhoodscout.com, 20.84%. That's insanity, right? So, if you bought something in 2020, your value has already gone up 20.84%. It's insane. Now the national average over this past year was just shy of 12 about or 12%, which was 11.4% based on the statistics that we saw. So, we're supposed to start seeing appreciation slow down as the next few years go, probably somewhere between five nationally, somewhere between 5 to 8%, which is going to be a big slowdown. Here in Florida.,we're probably going to see a big dip for appreciation as well. But, I don't think it will be that much. But these are just based off of realtrends.com if you want to check them out. They have all the data that we've pulled. In any case, if you purchase something now this year, you're in the next five years, ten years, you're going to be looking back really glad that you did. The same way that somebody that purchased in 2012 is looking back right now.

Alright. So, let's talk about the housing market and what has changed. Now, over the past year, here's what we had single family homes. Our median price in Northwest Florida was around $375,000. That was a high all the way up to $16.9 mil, down over in 30A area, and our low is about $15,000. Man, I believe that was a mobile home somewhere. As we look for condos, our median price was about $435,000. Our high all the way up to $8.2 million and a low of $25,000 which approximately enough was in Miramar Beach. Now it wasn't looking over any body of water, but it was there. So what has changed in the housing market as far as deals going on. Winning deals has become a lot different. We, as real estate agents, had to change strategy for you, the buyer, or the investor to make sure that you could even get something. Now, of course, our job is normally to get you the lowest possible price with the best possible terms. But really because most of these homes were going into multiple offers, we had to be more strategic. A lot of people were putting in what we call escalation clauses where they would pay a thousand dollars over any competing offer, and then they would just go up to. It started at $300,000, up to $350,000. Right? We even got to point to where we know that the market wouldn't support it, right? The market wouldn't support that price because we were financing it. And the bank said that, hey, in this scenario, it's only work $310,000. Okay, well, if it only says that, then I'll pay an extra $7,000 over appraised value at closing. Like, then we have appraisal gaps that are going in. Like, it got pretty crazy. Now as I was advising my buyers and our buyers that work with everybody here on our team was not necessarily to go much higher than seven thousand above appraised value. Based on normal appreciation, it's going to take you about five and a half years for the value of that to catch up to what you paid for. For people going over that, I hope to goodness that, that is your forever home and you're holding onto it for quite some time, because this appreciation would'nt last forever. And in any case, we have to get continually getting more and more creative with our financing to make sure that you get the home or the condo or the investment that you're really looking for. One of the other things too that we've seen is, a slowdown on investors looking to flip properties. Now, is that not going on anymore? Absolutely not. It is absolutely still going on, right? So, the only thing is, is that, it's harder to find those specific type of properties. You're almost doing the job of a real estate agent, cold calling neighborhoods, sending out mailers, doing all the dirty work that we normally do in order to find clients. So, investors are doing that at this point to find those certain ones and to get that return on investment that they're really looking for. Or, they're just accepting a lower amount of return based on the time and materials and manpower that they're putting into it. However, we were also seeing an uptake in long term and short term rentals and it's mainly due to the fact that the interest rates are still low. And for those investors looking long term, that's pretty much free money. So it seems silly not to invest if you have the means to do so at this time with the market appreciation and the outlook the way that it is.

2. COVID

Okay, let's talk about COVID restrictions. Now one thing about Florida and especially Northwest Florida is they really did not enforce much of anything, and they weren't really required to, thanks to governor DeSantis. The mask mandates, it did go on for some time, and then it kind of dwindled out. It became more optional, it wasn't required. Our governor also, in certain counties, specifically here was taking away public funding for those that had mandates in certain schools, depending upon where you are in those on that line. It's either good or bad. But either way, you'll be walking around the street, you'll be in stores, you'll be in restaurants, they're at full capacity, no mask mandates. The people that still feel and want to protect themselves are still wearing that, no harm, no foul. There's no local restrictions. We did have something at some point where certain businesses would require it but not here in Northwest Florida, not anymore. As far as the vaccination requirements, the state of Florida is dry and it's best not to have to enforce anything coming down from the federal that they can. Right? So, there's a big push here in the state of Florida that's trying not to have restrictions or requirements for certain things. Now, obviously, federal jobs like the US military, things like that, they require to do it. But of course, even at the date of this video, there's cases and things going to the Supreme Court that are changing this all the time. So, take this for, with a grain of salt, so to speak, and know that at least here, there's not a big reaction even to the omicron virus at this time. And of course, travel restrictions, there hasn't been much, at least coming in, of course, coming out of Florida going into certain States like maybe New York or California, they may have some restrictions, but coming into the state,still really nothing.

3. JOB MARKET

Okay.Number three, we have the job market. The job market interestingly enough has grown and it's not because the jobs are coming here. What do you mean? Well, the job market has changed. And has change since COVID came in, where everybody started to go teleworking. So, one of the great things about teleworking is, if you can do your job teleworking 99% of the time, there's been a lot of people that have negotiated with their boss, with their company that they could work anywhere. And, just telework for their entire job, maybe come in once a month, once every other month or something like that. So, there's a lack of necessity to work in a geolocation and just telework half the time. This is phenomenal if you want to move and work in the place that you vacation, mainly because you will qualify for a loan because you're not changing jobs. Most of the time when people relocate and they want to get a loan, be like, do you already have a job lined up? Do you have an offer letter? Do you have all this other stuff? If you're keeping the same job and you're just picking up a computer and moving it to another place, that makes it super easy. So, we've seen a lot of people figuring this out, and have have moved to this area and just continued life as normal, except they wake up and they're 15 minutes from the gorgeous beaches.

4. INVESTMENTS

Alright. Number four that we do have for you is the investments for short term rentals and a boost for ROI, they're boosting the ROI on this. Why? Because more people are vacationing. If you look at the rents since COVID hit, obviously, in the first three, four months, they took a big dip during some of the highest income months back when, in 2020. But because all the other states have had such high restrictions, everybody's just trying to escape it. So when they come down here, they come to northwest Florida, they come to our Panama City, Destin, Pensacola Beach, these areas to come vacation. There's more and more people just trying to away from it and a big vacation just from COVID altogether, at least seemingly. So, with that being said, the amount that they've been able to rent these, these condos have been significantly higher. So, the same return on investment or cash flow numbers that we calculate for our investors have gone up significantly, so you'll be making more money and be able to do that. Now, don't get me wrong, the people selling these condos realize that too. So, they have been pricing it competitively. But, good news is, with the interest rates being as low as they have been and the long term appreciation and the, just continuous demand for rentals and more people vacationing in this area per year, you're going to see a much more stable and a much better return on investment cash flow, depending upon your goals.

Alright. Well, that's all that we have for you for living in Northwest Florida and the results of recent change, yes, back from 2021. If you have any questions about anything I mentioned here, please feel free to call/text us at 850.320.7757 or email us at Admin@WhittemoreGroupRE.com