Florida real estate has been flying high for the past few years. Prices have consistently gone up, in spite of many experts predicting a fall. While the market seems to be cooling off, a crash looks very unlikely.
For some people, this has meant putting off buying a home. Paying for rent, even along with the cost of Florida renters insurance and other associated expenses, is more affordable. Unless you have significant savings that you can put into a healthy downpayment, buying a home at the moment is tough.
Is this true in Lake County as well? Let’s take a look at how Lake County’s realty trends compare to the rest of Florida.
Florida Realty in 2022
Florida has never been the most expensive state to buy homes in. While there are certainly some extremely expensive cities, like Palm Beach and Key Largo, most parts of Florida are fairly affordable. However, housing across the country is getting more and more expensive.
The rapid increase in housing prices began during the pandemic when interest rates were low. It was possible to get a mortgage with a record-low annual percentage rate (APR), so even expensive houses were more affordable.
But that has changed in 2022. Housing prices have gone up so much that even with low-interest rates, they would be difficult to afford. It is also no longer possible to get those interest rates. The Federal Reserve has been hiking interest rates to fight inflation, and you will now get an APR that is higher than pre-pandemic levels.
Still, Florida real estate is not as expensive as it might be. The median home price in Florida is around $402,000. That is in comparison to the national median of $355,000. For a state with some of the most expensive cities, is above the national median is expected.
How does Lake County compare?
Lake County Realty in 2022
The median home price in Lake County as of July 2022 is $400,000. As you can see, it is somewhat around the same as the rest of the state of Florida. But it is in looking at the bigger picture that we see the differences.
Where the big difference between Lake County and the rest of Florida lies is in just how much the price of homes has increased. Whereas the year-on-year increase throughout the state is over 30%, it is up just 23% in Lake County.
Whether or not this is a good thing is difficult to determine. Housing prices rise in a healthy market, but the rapid increases we are seeing are unsustainable. A slower, steadier increase in prices may be better in the long term.
Another difference between Lake County real estate and Florida real estate is somewhat more worrying. The median income in Lake County is $2,000 lower than the Florida median. This in itself is not a problem, but considering the closeness in the value of homes, it does not bode well.
The problem is that Floridians already spend a disproportionate amount of their income on housing. Nationally, people spend 30% of their income on mortgage payments. In contrast, Floridians spend 44% of their income on mortgage payments.
In other words, while homes are not much more expensive in Florida than throughout the US, they are less affordable. This is true throughout the state and even more so in Lake County.
The Future of Lake County Realty
It is difficult to predict where Lake County realty will go in the near future. The truth is that many people’s predictions for the US housing market have not come to pass. Anyone who says they know what will happen is lying.
Ideally, prices will go down somewhat without crashing. A strong housing market is very important to our economy, but prices do not need to be this high for the market to be strong. The interest rates are also unlikely to stay this high for too long.
If you’re looking to buy a home in Lake County, you may be best served by continuing to rent for the next few months. The best approach may be to wait it out and see what happens.