Featured in the March 2023 Issue
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Partner's Perspective: A Real Estate Attorney's Take on the Current Real Estate Market and Trends
- Managing Partner, Charles Jimerson, joins Veteran Owned Business Panel
- Blog Highlights
- Curiosities, Ruminations and Various Eccentricities of Firm Biz
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PARTNER'S PERSPECTIVE
A. Hunter Faulkner - A Real Estate Attorney's Take on the Current Real Estate Market and Trends
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The last eight months have been a tumultuous time for many of us that work in the real estate industry. As a real estate attorney, the recent uncertainty in the market has certainly had an impact on my practice as well as an impact on how many of my clients are evaluating future investments. High inflation led to the Federal Reserve enacting a series of interest rate hikes in an effort to curb inflation that affected Americans nationwide. What had been a red-hot (I would argue unsustainable) market for almost two years suddenly cooled leaving buyers and sellers confused about what will come next. It appears, however, that we have seen some signs of market stabilization over the past six to eight weeks, which can serve to provide buyers and sellers with more confidence as they enter the market.
For those of us in Florida, there are many positive trends that are worth taking a closer look at that explain why Florida may be spared from a potential downturn in the market. These trends, as detailed below, may serve to ease both in-state and out-of-state investor confidence when looking to acquire real property in Florida.
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Increased demand for larger homes: One of the biggest trends in homebuying is the increased demand for larger homes. With many people now working remotely and spending more time at home, there is a growing desire for homes with more space, including extra bedrooms, home offices, and larger outdoor areas. This trend is particularly evident among families with children who need more room to accommodate online learning, remote work offices, and other activities. Florida offers countless new developments that afford homeowners this additional space that so many folks in the market are craving.
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A surge in interest in suburban and rural areas: The pandemic has also spurred a movement away from urban areas to suburban and rural locations. Many people are looking to escape crowded cities and find homes with more outdoor space, lower population densities, and a quieter lifestyle. As a result, homebuyers are increasingly searching for homes in smaller towns and more rural areas, which has led to a surge in demand for homes in these locations.
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Population Growth: One major factor that is expected to continue driving the Florida real estate market is the state's population growth. Florida has consistently been one of the fastest-growing states in the country. In January, the U.S. Census Bureau provided that Florida’s population increased by 1.9% from 2021 to 2022 and is now the nation’s fastest growing state. This growth is expected to continue, with the state's population projected to reach nearly 24 million by 2030. In other words, the demand for homes does not show signs of decreasing.
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Remote Work: Another trend that is expected to continue in the Florida real estate market is the shift towards more remote work. The COVID-19 pandemic accelerated the trend of remote work, and many companies have announced that they will continue to offer remote work options even after the pandemic is over. This has led many people to reconsider where they want to live, with many choosing to move to areas like Florida that offer a high quality of life, a warm climate, and favorable tax policies.
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Strong Economy: Finally, in addition to population growth, Florida's real estate market is also expected to benefit from a strong economy. Florida has one of the fastest-growing economies in the country, driven by a diverse range of industries including tourism, healthcare, and technology. This has resulted in a strong job market and high levels of consumer confidence, both of which are positive indicators for the real estate market. Businesses are also enticed into moving their operations to Florida for certain tax benefits, which also encourages growth around the state.
Despite these positive trends, there are still concerns regarding higher interest rates, which can be an impediment for people looking to purchase a new home. Prior to the most recent rate hikes, we saw record low interest rates for several years. So many people, especially younger homeowners, believed that interest rates between 2.5% - 4.0% were the norm. Unfortunately, these rates have gone up, which has lowered the purchasing power for many folks in the market. It has also depressed the buyer pool because so many people are married to their current mortgage and its low interest rate, so they figure it’s not worth the hassle of moving. While this may be the case temporarily, the trends listed herein demonstrate that Florida is still a desirable market. Buyers will soon become accustomed to rates between 5.0% - 7.0%. And as inflation goes down, hopefully mortgage rates will follow.
The most recent interest rate hike from the Fed of 0.25% in the wake of the failure of two midsize banks, Silicon Valley Bank and Signature Bank, is another sign that the Fed still sees interest rates as the most direct method to curb inflation. However, interest rates were not raised as high as originally predicted partly due to the failure of these failed banks to properly manage their asset portfolios. The lower rate hike is good news for folks looking to buy real estate, but there are differing opinions from economists as to whether this small rise in interest rates is aggressive enough to beat back inflation, which is the ultimate goal. Time will surely tell.
While I’m certainly not in the market prediction business, it appears that the Florida real estate market should remain strong in 2023 and beyond. The state's growing population, strong economy, great climate, and high quality of life are all positive indicators for the real estate market, and the trend towards remote work is likely to continue driving demand for housing in popular areas. However, there are potential challenges such as rising interest rates that could continue to impact the market. It is crucial that buyers and investors do their due diligence to navigate these risks and find the right property for their needs.
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A. Hunter Faulkner
Partner
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Partner Joby Birr and attorney Melissa Murrin give legal update to the Construction Financial Management Association |
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We are grateful to the Construction Financial Management Association (CFMA) for inviting our attorneys Joby Birr and Melissa Murrin to present a legal update at the CFMA Northeast Florida chapter meeting.
Joby and Melissa had the pleasure to share insights and expertise on the latest developments and trends in construction law with fellow members and guests. The breakfast was delicious, the coffee was hot, and the conversation with colleagues was thriving. Thank you for hosting such a valuable and engaging event!
If you would like more information on partnering with Jimerson Birr or have general questions, please call (904) 389-0050.
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Jimerson Birr Legal Blogs |
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Are you keeping up with the latest information in business and law? Jimerson Birr publishes weekly blog posts covering topics from construction law, real estate development, sales and leasing law, banking and financial services law, community association law, and everything in between. Click here to subscribe today and stay up-to-date on the latest legal news from the industries we serve:
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Banking and Financial Services
Industry Legal Blog
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Buyer’s Remorse: Vacating a Foreclosure Sale You Won by Mistake
By: Austin B. Calhoun
Did you win a foreclosure sale, only to find out later that you did not get what you thought you were bargaining for? If so, you then started wondering what you could do about it. Can you get the sale vacated and set aside, and get your purchase money back? In most cases, the answer is “no,” and you are stuck with the property. However, there is a limited set of circumstances that may allow you to fix your mistake by getting the sale vacated.
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Insurance Industry Legal Blog |
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How to Leverage a Settlement of Your Property Insurance Claim
By: Melissa G. Murrin
If you filed a claim on your residential or commercial property insurance policy that you believe was wrongfully denied, you may be thinking about filing a lawsuit against your insurance company for coverage. As of July 1, 2021, before an insured can file a lawsuit against the insurance company, the insured is required to provide the insurance company with written notice of intent to initiate litigation. This pre-suit written notice gives the insurance company an opportunity to re-evaluate its initial coverage decision, work with the insured and settle the property insurance claim, and avoid potential liability for the insured’s attorneys’ fees and costs.
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Professional Services Industry Legal Blog |
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Are Realtor Referral Sources Protectable Through Non-compete Agreements?
By: Brandon C. Meadows
In Florida, non-competition agreements are not enforceable, unless it is supported by the existence of one or more legitimate business interests. Section 542.335, Florida Statutes, governs the enforcement of a non-compete agreement, and it provides a list of business interests that would support enforceability.
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Curiosities, Ruminations and Various Eccentricities of Firm Biz |
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March JB FOR ME Highlight Reel
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We had a blast celebrating St. Patrick's Day with a three-leaf clover hunt for scratch-offs. Courtney hit the jackpot by discovering a golden four-leaf clover, which had a juicy scratch-off prize. Austin and Max were also lucky winners. May their newfound riches bring them lots of green beer and good cheer! |
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We turned up the volume on lunchtime fun and games with an epic session of music trivia that had us all rocking and rolling! Between bites of delicious pizza, we challenged each other's knowledge of classic hits and chart-topping anthems, and it was a blast seeing who could name that tune the fastest. Who knew that pizza and pop music were such a perfect match? |
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We crushed the Gate River Run with the speed of a cheetah and the endurance of a marathoner! With the sun on our faces and the wind at our backs, we tore up that pavement like it was nobody's business, feeling like total champs as we crossed that finish line. And just as we were about to pop the champagne to celebrate our victory, the rain crashed our party - but did we let that stop us? Heck no! We cheered with beer and rain, feeling like true warriors. And with the adrenaline still pumping, we're already planning our next move – more to come! |
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