Today, the real estate market in Florida appears to be so out of control for a variety of reasons. These reasons include youngsters being ready to buy homes, more cash buyer possibilities abound, mortgages at historic lows, and badly hindered development due to a scarcity of materials in the aftermath of the pandemic.
Asides COVID-related issues, weather in Florida has had its part to play. Coastal communities will see the ocean push inland as glacier melts, and tides increase, sinking beaches and submerging oceanfront property. Data from FloodIQ reports that nearly three million residences in Florida are at flood risk. Also, an extra 500,000 are expected to be in flood prone areas by 2050.
As a result, demand is outstripping supply, and Florida is now in high demand. We look to understand the cash home buyer possibilities and opportunities available in a time like this.
What Are The Cash Home Buyer Possibilities?
The past and potential weather damages don’t seem to have an effect on the ever-growing population size in Florida.
Due to increased demand, houses around Florida are flying off the market thanks to cash home buyers. In Orlando, they drive around neighborhoods asking homeowners if they plan to sell soon in order to beat-out other bidders. Central Florida is almost out of sellable properties, with bidding battles erupting and many transactions taking place totally in cash.
Climate change poses a threat to Florida’s Atlantic coast but this hasn’t deterred homebuyers, like the United Home Offer that also buys Texas houses, from snapping up houses. Jacksonville, Daytona Beach, Miami, and Palm Beach, are among cities prone to be impacted by weather damages.
However, Florida cash home buyers aren’t thinking about climatic changes just yet – they are unconcerned. They’re aware of the market strategies, and are willing to pay greater costs for it.
How Much Money Do Cash Home Buyers Spend In Florida?
House-buying companies are generally looking for houses below-market values, with sellers exchanging the more equity for faster closing and leeway. House flippers usually adhere to the 70% principle, which suggests that they do not spend more than 70% of the After-Repair Value (ARV), which includes extra fix and upgrade charges. However, because the cash-buying market in Florida is competitive, sellers often find that cash buyers are ready to pay more.
Cash buyers may not get much of a discount for move-in ready properties in high-demand locations. Although they can, if the house is in distress and the homeowner needs to close fast, this is fairly rare.
High Demand Pushes Offers
The 70% ARV threshold has risen in tandem with the surge in property demand on numerous occasions in this market. Buyers were willing to pay between 80% and 85% of the ARV. The notion is that after renovations and increased demand, the house’s value will grow, allowing them to recoup their costs.