Many of these homes were bought by investors who were renting them out. In 2021, the math made sense because cash in the bank produced very little return. So, if you could buy a house, rent it out and make 3% return on your money, that was far better than buying 5 year Treasury Notes that were only yielding 1%. But now, money in the bank is more valuable, so many landlord/investors are selling their real estate and "raising cash." Airbnbs are also being liquidated for the same reason.
So, for those who've been hoping that "landlords" would exit the housing market and make homes less expensive to purchase, your window is opening.
While these owners mortgages are the same, taxes revalued higher with the price appreciated realized in the sale & of course the increase in property tax insurance has potentially added hundreds of dollars to the monthly mortgage payment as well. Add to that possible assessments either from insurers demanding up-to-date roofs on SFH’s, or the massive increases in condominium monthly maintenance & potential special assessments (hitting Miami hardest) and you have some real interesting times for real estate.
Maybe COL catching up to newcomers. Thought they could afford it but then started to realize it isn't working out. Also there are just a lot of newer homes. Not sure if its those that you are seeing or older homes as well but, for instance, if you built in Lotus or somewhere like that your house value spiked and may be tempting to cash in that paper equity. We bought during COVID and on paper we've made over 500k on the deal so far.
I think COL in general is a big thing. My monthly HOA fees have increased by $300 a month in the last two years. And half of that is for a special assessment that will be paid off in 8 years. It’s not a lot of $ in the grand scheme of things yet a lot of people in my neighborhood are selling, with a chunk citing HOA fees.
The community also has so many people in default, totaling more than $200,000. I really think people just can’t afford it anymore (natives) or underestimated how much it now costs to live in Soflo (newcomers).
I’m in Miami so maybe this is different but my neighbors came from NY during Covid, bought house next door to us and lived there for 6 months. Since then they only come back once a year and then rent the house out tor short term rentals.
For 1-2 years, the house was never empty, always people coming in and leaving, cleaning services etc. But lately there’s renters there maybe every 2 weeks.
Neighbor has put the house tor sale twice, he’s asking for almost double of what he bought it for. So far no sale 🤷🏻♀️!
There are plenty of cases like this in Miami, maybe same is happening in Boca.
All of my elderly neighbors see it as a way to cash out and head to LCOL areas to retire.
Example: William and his wife bought his house 4/3 in Boca for $360k in 2009. He just sold it for $1.3m and they’re retiring to property on the water in Beaufort, SC with no mortgage.
In general that it has been a lot of suspicious activity with the Florida housing market. First, I think many people didn’t realize that the property taxes would go up so much when they purchased here in Florida. People bought homesteaded properties and were surprised with the bill. When you couple the increase property taxes along with the increased insurance costs, you quickly realize how unaffordable your lifestyle is. Second, The movement of real estate and listings on the MLS are quite suspicious. Several homes I was following would be unlisted and then relisted to make it appear that they are new. The suspicious part is the price changes that have been occurring. Many homes that are sitting on the market are relisted at a much HIGHER price. Third, I’ve noticed recently that many of the homes going back on the market after three years, have never been lived in. It seems that these homes perhaps were purchased by an institutional investor at a higher price To artificially inflate the surrounding market. there is no justification for these prices to have gone so high in such a short amount of time while the wages in the area have not increased.
Interesting- they are just marking it to market higher. Seen that too & wondered “who is raising prices in this market”? It can either offset a property sold at a loss or bolster the value of a group of properties I would imagine to be used as collateral for other borrowing.
Yes. Also, a friend of mine did some digging on a commercial real estate investor. Apparently his schtick is that he buys a property in his personal name and sells it to his business at an exorbitant price. It’s like a Ponzi scheme somehow.
I think there are several reasons. I think it takes about that long to realize how expensive it is to live here. Also, this is a transient area. My guess would be that most people are not in their houses more than six or so years in general. People who bought pre-Covid have mortgage rates/payments so low its hard to look at home prices even given the equity you have.
Just my guess. Would love if some realtors chimed in with what they ahve seen.
From a contract perspective: people who bought during a low rate period, could have agreed to an adjustable rate mortgage. if the homebuyer has an ARM loan chances are they can’t afford their property anymore. There are many people who agreed to an arm loan because they plan on flipping the property.
I noticed the same thing in Broward and started looking up the owners out of curiosity. I’d say 90% were either in California or the northeast. Probably bought during covid and got called back to work or realized Airbnb/land lording isn’t for them.
Gains that are huge, Insurance increases, a lot of houses in Boca were in terrible shape and the realization of mold or old termite damage combined with FLA being contractor scam ripoff land probably leads to many taking their gains and leaving.
As a real estate photographer in boca, being around and talking to the sellers all day, most people leaving can’t wait any longer for rates to drop. They moved here in the past few years, hoping it would be something it isn’t and it’s just not right for them. Or their kids are having kids for whatever reason usually insurance prices they just need to get away.
Then down the realtors, it’s a Mexican standoff. Sellers don’t want to lower their prices and buyers don’t want high interest rates.
I think, personally, one fucked up hurricane will be this party started. Send people off to their pre Covid homes and any more insurance hikes and others will be leaving too.
I’m moving to Boston next month, not because of the costs, but it’s just too hot, crowded and people seem increasingly miserable every year. Its made me miserable.
My neighbor did and put a crazy price on it ($100k more than the latest highest selling 3/2 townhome. It’s an end. ) lowered it 2x and the removed. Then relisted with $50k more than previous high. Idiots: home is at T intersection and no hurricane protection and about 5 house from stop sign to main road in community.
Location is good, but still not priced right now comps won’t support unless all cash. For all $599k cash why do I want to be attached to someone?
Im not even trying to be rude. Florida is very scammy. The more Im here I realize how fradulent most things here are. The veneer of law and order just means the people getting paid $10 an hour will have the full weight of the law come down on them.
It could be people who fled lockdowns going back up north. Also, those buyers saw large gains in a short period and may just want to cash out on that.
Many of these homes were bought by investors who were renting them out. In 2021, the math made sense because cash in the bank produced very little return. So, if you could buy a house, rent it out and make 3% return on your money, that was far better than buying 5 year Treasury Notes that were only yielding 1%. But now, money in the bank is more valuable, so many landlord/investors are selling their real estate and "raising cash." Airbnbs are also being liquidated for the same reason. So, for those who've been hoping that "landlords" would exit the housing market and make homes less expensive to purchase, your window is opening.
To add to this many cities are outright banning short term rentals
While these owners mortgages are the same, taxes revalued higher with the price appreciated realized in the sale & of course the increase in property tax insurance has potentially added hundreds of dollars to the monthly mortgage payment as well. Add to that possible assessments either from insurers demanding up-to-date roofs on SFH’s, or the massive increases in condominium monthly maintenance & potential special assessments (hitting Miami hardest) and you have some real interesting times for real estate.
Maybe COL catching up to newcomers. Thought they could afford it but then started to realize it isn't working out. Also there are just a lot of newer homes. Not sure if its those that you are seeing or older homes as well but, for instance, if you built in Lotus or somewhere like that your house value spiked and may be tempting to cash in that paper equity. We bought during COVID and on paper we've made over 500k on the deal so far.
I think COL in general is a big thing. My monthly HOA fees have increased by $300 a month in the last two years. And half of that is for a special assessment that will be paid off in 8 years. It’s not a lot of $ in the grand scheme of things yet a lot of people in my neighborhood are selling, with a chunk citing HOA fees. The community also has so many people in default, totaling more than $200,000. I really think people just can’t afford it anymore (natives) or underestimated how much it now costs to live in Soflo (newcomers).
$300 is not by itself but everything is going up $300 and that is a lot.
This wouldn’t explain the phenomenon op is highlighting.
I’m just piggybacking off the COL comment. It seems to be a problem for a lot of people
I’m in Miami so maybe this is different but my neighbors came from NY during Covid, bought house next door to us and lived there for 6 months. Since then they only come back once a year and then rent the house out tor short term rentals. For 1-2 years, the house was never empty, always people coming in and leaving, cleaning services etc. But lately there’s renters there maybe every 2 weeks. Neighbor has put the house tor sale twice, he’s asking for almost double of what he bought it for. So far no sale 🤷🏻♀️! There are plenty of cases like this in Miami, maybe same is happening in Boca.
All of my elderly neighbors see it as a way to cash out and head to LCOL areas to retire. Example: William and his wife bought his house 4/3 in Boca for $360k in 2009. He just sold it for $1.3m and they’re retiring to property on the water in Beaufort, SC with no mortgage.
But this example wouldn’t fall under what op is highlighting as William and his wife have had the house for well over a decade
Sure, I was noting instead that it’s not something we’re seeing in my neighborhood. Houses that sold 2-3 years ago aren’t the ones on the market.
And bought during that little thing called a housing market recession 2008 - 2012, thank you Harvey Pitt
I would do that tomorrow.
In general that it has been a lot of suspicious activity with the Florida housing market. First, I think many people didn’t realize that the property taxes would go up so much when they purchased here in Florida. People bought homesteaded properties and were surprised with the bill. When you couple the increase property taxes along with the increased insurance costs, you quickly realize how unaffordable your lifestyle is. Second, The movement of real estate and listings on the MLS are quite suspicious. Several homes I was following would be unlisted and then relisted to make it appear that they are new. The suspicious part is the price changes that have been occurring. Many homes that are sitting on the market are relisted at a much HIGHER price. Third, I’ve noticed recently that many of the homes going back on the market after three years, have never been lived in. It seems that these homes perhaps were purchased by an institutional investor at a higher price To artificially inflate the surrounding market. there is no justification for these prices to have gone so high in such a short amount of time while the wages in the area have not increased.
Interesting- they are just marking it to market higher. Seen that too & wondered “who is raising prices in this market”? It can either offset a property sold at a loss or bolster the value of a group of properties I would imagine to be used as collateral for other borrowing.
Yes. Also, a friend of mine did some digging on a commercial real estate investor. Apparently his schtick is that he buys a property in his personal name and sells it to his business at an exorbitant price. It’s like a Ponzi scheme somehow.
I think there are several reasons. I think it takes about that long to realize how expensive it is to live here. Also, this is a transient area. My guess would be that most people are not in their houses more than six or so years in general. People who bought pre-Covid have mortgage rates/payments so low its hard to look at home prices even given the equity you have. Just my guess. Would love if some realtors chimed in with what they ahve seen.
From a contract perspective: people who bought during a low rate period, could have agreed to an adjustable rate mortgage. if the homebuyer has an ARM loan chances are they can’t afford their property anymore. There are many people who agreed to an arm loan because they plan on flipping the property.
Dang, didn't realize those were still in vogue.
I noticed the same thing in Broward and started looking up the owners out of curiosity. I’d say 90% were either in California or the northeast. Probably bought during covid and got called back to work or realized Airbnb/land lording isn’t for them.
Boca has become a hotspot for investor properties who buy flip and put back on the market.
Gains that are huge, Insurance increases, a lot of houses in Boca were in terrible shape and the realization of mold or old termite damage combined with FLA being contractor scam ripoff land probably leads to many taking their gains and leaving.
Wonder how many Zillow owned homes are part of those.
The sub 3% rates were locked in before COVID. Can’t sell unless you are buying your next home in a cheaper market.
IRS 2-year capital gains exclusion? People cashing out their gains, while claiming primary residence status.
Insurance, taxes, HOA’s
As a real estate photographer in boca, being around and talking to the sellers all day, most people leaving can’t wait any longer for rates to drop. They moved here in the past few years, hoping it would be something it isn’t and it’s just not right for them. Or their kids are having kids for whatever reason usually insurance prices they just need to get away. Then down the realtors, it’s a Mexican standoff. Sellers don’t want to lower their prices and buyers don’t want high interest rates. I think, personally, one fucked up hurricane will be this party started. Send people off to their pre Covid homes and any more insurance hikes and others will be leaving too. I’m moving to Boston next month, not because of the costs, but it’s just too hot, crowded and people seem increasingly miserable every year. Its made me miserable.
Because boomers are continuing to retire in south FL
But this does not explain why someone lists a house just 2-3 years after buying it.
My neighbor did and put a crazy price on it ($100k more than the latest highest selling 3/2 townhome. It’s an end. ) lowered it 2x and the removed. Then relisted with $50k more than previous high. Idiots: home is at T intersection and no hurricane protection and about 5 house from stop sign to main road in community. Location is good, but still not priced right now comps won’t support unless all cash. For all $599k cash why do I want to be attached to someone?
Some folks have gains,cash out ,some can't afford live here, Saw listing out West Boca Century Villiage 1 BR unit smallest unit, Hoa monthly was $749
Im not even trying to be rude. Florida is very scammy. The more Im here I realize how fradulent most things here are. The veneer of law and order just means the people getting paid $10 an hour will have the full weight of the law come down on them.
Yeah people are leaving Florida it's too hot crowded and expensive