Delray Beach, Florida, is a highly sought-after, affluent community in Palm Beach County. Vibrant, culturally-rich art galleries and museums, tranquil outdoor spaces, and a rich, laidback waterfront lifestyle make this location one of the best places to live in the Sunshine State.
Not only is Delray Beach the ideal place to live, but it’s also a hotspot for profitable real estate investments. The city’s housing market offers opportunities for buyers and investors to expand the value of their real estate properties. Real estate investors, homeowners, and interested buyers are wondering what to expect out of the Delray Beach housing market in 2023. People moving from out of town, market trends, and inflation are some of the principal influences in Delray Beach’s real estate market.
People will continue to move to southern Florida
In recent years, there has been an uptick in Americans moving from northern states to Florida. In 2022, Florida was the fast-growing state in the country. While many states experience ebbs and flows in their population growth, Florida’s population has increased yearly since 1946. Since the pandemic, many residents have shifted to a work-from-home lifestyle, allowing for more choice in where they’d like to live. Delray Beach’s perpetual sunshine, luxury real estate offerings, and impressive amenities, such as world-class restaurants, luxe shopping, and renowned entertainment, make it a highly desirable location to live. The area’s small-city charm and tight-knit community offer a plethora of festivals, events, and other opportunities for residents to create and maintain lifelong friendships with neighbors.
Prospective residents will benefit from low tax rates in comparison to other states. Florida’s lack of state income tax is a huge draw for many professionals and families seeking a picturesque and refined community to live in. In 2023, trends suggest Americans will continue to move from cold areas of the country to Florida. This large influx is expected to maintain the Delray Beach real estate market’s thriving nature.
Long-term investments are more profitable
Long-term investments in Delray Beach are far more profitable than their short-term counterparts. While a one-year investment in a Delray Beach property is expected to garner only a minimal increase in value, five-year investments are expected to return a more than 10% profit. In the next 10 years, Delray Beach real estate is predicted to result in an over 18% return on investment. For investors interested in Delray Beach real estate, this means long-term commitment is the best way to see a significant return on investment. This is also good news for homeowners moving to Delray Beach. Homeowners looking to buy a house and spend years living there will build significant equity and long-term wealth. Considering current Delray Beach real estate market trends, homeowners will likely earn a profit.
If you’re hoping to invest in Delray Beach real estate in 2023, be sure to talk with a trusted local real estate specialist. They’ll be able to answer any questions you have and provide invaluable advice on your available options based on current market conditions, your financial situation, and more.
Inflation and interest rates will impact the housing market
As the country grapples with the lasting effects of the COVID-19 pandemic, housing markets all over have seen an increase in interest rates and inflation, including Delray Beach. There are several ways that inflation can influence the housing market.
The Federal Reserve has raised interest rates in an effort to combat inflation. While the Federal Reserve does not control mortgage rates, it can greatly influence them. When interest rates are high, mortgage rates are expected to rise. Increased mortgage rates raise the cost of buying a home for those who cannot afford to buy a home in cash. Inflation can also increase the costs associated with building and maintaining homes. This increase in construction and maintenance costs can result in higher home prices. With increased home prices, sales could slow down, especially for those buying on a budget. For real estate investors and other buyers who plan to buy properties in cash, recent inflation rates will result in increased housing prices that can limit the buyer pool.
Limited inventory
While the cost of buying a home has increased, that’s not entirely the same for the number of homes available on the market. Around the country, housing markets are expecting a limited inventory of available properties. This is primarily due to the low interest rates at the start of the COVID-19 pandemic, reduced building materials available, and seller uncertainty. Since 2020, interest rates have skyrocketed. Many homeowners who purchased during this time and would otherwise sell now are hesitant to do so, as few are willing to trade their low-interest rate for a higher-priced mortgage. In quarter 4 of 2022, Delray Beach had 313 homes listed on the market, a nearly four-month supply. In January 2023, homes spent an average of 44 days on the market before selling. Just a year ago, Delray Beach buyers and sellers could expect to stay on the market for 32 days. Higher interest rates and seller hesitancy have led to fewer homes for sale. Prospective buyers will likely feel this depletion and could struggle with the fewer options available.
Ready to enter Delray Beach’s exclusive housing market?
Taking on a real estate investment is a huge decision, and because of this, you need a skilled real estate professional at your disposal. If you’re interested in investing or selling your Delray Beach real estate, contact Ina Bloom and her team today. Ina is an experienced real estate expert who has lived in Boca Raton for 17 years. She is a valued member of the Boca Raton real estate community and works tirelessly to satisfy her clients. Ina has experience representing buyers, sellers, and real estate investors for a number of transactions, including Delray Beach’s in-demand luxury homes. Whether you’re looking to buy a waterfront estate or a high-end condominium with the latest amenities or want to sell your single-family home in a gated community for top dollar, Ina and her team are more than happy to help you reach your real estate goals.
