FANNIE MAE REPORT JUST IN! WHAT THIS MEANS FOR YOUR LEHIGH PROPERTY?

THE WINDOW OF OPPORTUNITY IS SHRINKING IN LEHIGH ACRES, FL

It is not a secret that homeowners are interested in the value of their property and are wondering how it will change in the future. This is even more relevant with Investors, owning Rental properties, as they are always staring at the Horizon, wondering if this is the right time to sell.

For the past 3 years, the real estate prices continued to grow nationwide and most of them peaked in the last quarter of 2022 or the first quarter of 2023. The situation in Lehigh acres was different – they continued to rise and the demand continued to be strong.

A major contributing factor was Hurricane Ian. The damage on the coast and in the area made a lot of families look for a new place, while their homes were being repaired/rebuilt, but also a lot of Insurance adjusters, FEMA employees, construction workers, and crews came to the area to help with the rebuilding effort. The demand for housing skyrocketed, and so did the prices.

I believe we are at the height of the demand now, which creates a window of opportunity for investors to beat the crowds and exit with a substantial gain, even if you have tenants in the property currently.

FANNIE MAE AND CORE LOGIC EXPECTATIONS!

Fannie Mae released its latest string of forecasts, calling for a possible “mild recession” and continued housing headwinds.

“A modest contraction remains the most likely outcome,” the mortgage purchaser announced in a press release early last week. Specifically, Fannie Mae projects that a downturn will occur in the first half of 2024, bringing with it reduced consumer spending and a decreased interest in housing, among other goods and services.

As we enter the “mild recession,” as Fannie puts it, and mortgage rates stay elevated, consumers will start to pull back on housing, and home prices could decline.

As of now, the mortgage purchaser’s Home Price Index predicts price growth of just 3.9% in Q4 2023 (over Q3) and 2.6% growth in the first quarter of next year. By the end of 2024, Fannie Mae projects prices will fall 0.7% nationwide.

Doug Duncan, senior vice president and chief economist at Fannie Mae, said:

“Households remain confident in their own employment, even though they don’t feel great about the overall economy, and the vast majority don’t believe it’s a good time to buy a home, as mortgage rates and home prices continue to constrain affordability. This is evidenced by recession-level home sales volumes resulting from the very low levels of existing homes for sale and the significant affordability challenges. We expect that total housing market activity will remain at a low level into 2024 as the Federal Reserve continues to hold the line on interest rates against inflation.”

According to CoreLogic, the five markets with the highest likelihood of home price declines are:

Provo-Orem, Utah
Spokane-Spokane Valley, Washington
Cape Coral-Fort Myers, Florida
North Port-Sarasota-Bradenton, Florida
Lakeland-Winter Haven, Florida

All have an above 70% probability of price declines in the next year.

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