STUART, Fla.--(BUSINESS WIRE)--Mar 17, 2020--
As the US market continues to experience the early stages of the Coronavirus cycle, every industry is evaluating its short-term and long-term impact. For the real estate industry in particular, discussion of a looming “recession” brings to mind the challenges faced during the global financial crisis over the last decade. But this is 2020, and real estate could be a bright spot for investor opportunities in an otherwise volatile global market.
“We’ve taken this ride before,” says Stephann Cotton, President of Cotton & Company, a Florida-based international sales and marketing firm specializing in luxury residential properties. “In June 2005, we raised a red flag at the beginning of the last cycle. We witnessed a significant drop in new web visitors and website registrations across the board for dozens of new home communities. Our online analytics were the early indicators of a substantial shift in the marketplace, and it occurred six months prior to national economists recognizing a market shift.”
Throughout Florida, the Caribbean and other destination markets, real estate has bounced back from the downturn with vigor. In Florida, real estate has been averaging a 4% appreciation. Increased demand and sales momentum have created a lack of inventory, and rising construction costs for new projects has led to higher pricing. What’s driving the activity? Baby boomers who delayed their purchasing decision have reached their retirement years, and Gen Xers who took advantage of the upturn, continue to migrate to warmer weather and favorable tax climates.
“Our market indicators continue to show strength in the real estate sector,” Cotton continues. “Although Seller anxiety may lead to a short-term Buyer’s market, the economic foundation remains in place for real estate to bounce back quickly from these short-term market conditions.”
The real estate marketing firm’s insights are derived from the management of a wide variety of luxury properties throughout Florida. This prime destination for snowbirds and tax refugees typically experiences strong market activity through late April. Cotton & Company’s CMO, Laurie Andrews, continues to monitor the market acceptance through a variety of digital marketing tools.
“When it comes to social distancing, everyone is taking a hard look at their current surroundings,” says Andrews. “Do I live in a place where I can relax, enjoy the outdoors, and stay healthy—all while I’m staying away from crowds and sheltering in place? We believe many of our northern visitors may wind up staying in Florida longer this year, as their northern hometowns deal with more restrictive measures due to community spread.”
When it comes to long-term mortgage rates, the timing couldn’t be any better. With the recent reduction of the Federal Funds rate, 30-year fixed mortgages have hit new historic lows. Low interest rates and low tax rates has Cotton betting on brighter days ahead for the Florida real estate market. “In the short term, homebuyers are distracted by the day-to-day changes that have resulted from our new normal,” says Cotton. “But for the savvy homebuyer, now may be the right moment to get out of the stock market volatility, and back into a more stable real estate market.”
For Florida realtors, finding the right balance will be a challenge for managing the needs of both the buyer and seller. Property showings will require a higher degree of screening as the industry grapples with creating exposure for available listings, while protecting the current homeowners from overriding health concerns.
One thing is certain, Florida sunshine, beaches and waterways have always been in high demand. These natural wonders will withstand the coronavirus and continue to attract residents who appreciate their environment when sheltering in place means staying close to home.
View source version on businesswire.com:https://www.businesswire.com/news/home/20200317005741/en/
CONTACT: For Cotton & Company
Stephann Cotton, 772-600-3500
KEYWORD: UNITED STATES NORTH AMERICA FLORIDA
INDUSTRY KEYWORD: OTHER CONSTRUCTION & PROPERTY RESIDENTIAL BUILDING & REAL ESTATE CONSTRUCTION & PROPERTY REIT
SOURCE: Cotton & Company
Copyright Business Wire 2020.
PUB: 03/17/2020 03:07 PM/DISC: 03/17/2020 03:07 PM