Homebuyers saw home prices exceeding 10% or more across South Florida during the first year of the COVID-19 pandemic, as interest rates hit new lows and the numbers of houses for sale sharply dropped off.
The monthslong, rock-bottom interest rates coupled with the heavy demand for homes all fueled the push, experts say. And there doesn’t seem to be an end in sight, even though South Florida home prices are well above their historical highs.
“You see this every time you have a dramatic drop in [interest] rates,” said Ken Johnson, a real estate economist at Florida Atlantic University. “You see a quick run-up in price. It’s like a sugar high. It’s like an injection to stimulate the marketplace where you have this really low interest rate. ‘I’d better buy now because I’ll never see these low rates again.’”
In a survey released Tuesday, the Federal Housing Finance Agency ranked the metro area of West Palm Beach, Boca Raton and Boynton Beach No. 36 out of 100 U.S. markets. The area saw prices rise 12.1% in the fourth quarter of 2020.
The metro area covering Fort Lauderdale, Pompano Beach and Sunrise came in at No. 44 with an increase of 11.7% during last year’s final quarter, while the area covering Miami,…