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Housing prices, inflation have South Florida residents asking, 'Is this the new normal?'

'This is not going away tomorrow or in the next 6 months,' real estate economist Ken Johnson says
Posted at 6:00 AM, May 20, 2022
and last updated 2022-05-20 06:00:24-04

WEST PALM BEACH, Fla. — With housing prices and rent in South Florida soaring — and inflation and gas prices climbing — many people are wondering if the current high cost of living is now the new normal. 

"Is this the new normal? The answer to that is from a pricing standpoint, the answer is yes," Andrew Barbar, a broker with Keller Williams Realty Service Partners, said.  

Over the past year, people are adjusting to a much more expensive South Florida.  

Emmanuel St. Germain, loan originator with Choice Mortgage in Boca Raton
Emmanuel St. Germain shares his thoughts on the lack of homes available to meet the current demand in South Florida.

WPTV town hall: Feeling 'Priced Out of Paradise?' We want to hear from you

"We just haven't had enough supply, which is keeping homes very expensive, which is great for the sellers, but for buyers, it's becoming very difficult," Emmanuel St. Germain, a loan originator with Choice Mortgage in Boca Raton, said.  

It's difficult for the average home buyer to afford their dream home — or any home right now — during a time when all-cash offers are dominating the market.  

Barbar and St. Germain told WPTV there isn't a one-solution fix.  

"We need tax reform. We need zoning reform," Barbar said. "We need commercial properties that could be repurposed into residential properties."

Andrew Barbar, broker with Keller Williams Realty Service Partners
Andrew Barbar explains what needs to happen for housing prices to return to a more affordable level in South Florida.

The financial stress ranges from those who are trying to buy a home to people who are renting.  

Special Coverage: Priced Out of Paradise

"I've seen a room, $1,000, $1,200, and then they don't even want you to use their kitchen. They want you to just stay in your room with a microwave and a mini-fridge," Nicole Mary, who can't afford her rent increase, told WPTV. "I really just don't know what I'm going to do when my lease is up."  

On top of the housing crisis, inflation and climbing gas prices are creating even more headaches for many people.  

So, will this keep people from moving to South Florida or start driving people away? 

Nicole Mary, South Florida resident struggling to pay rent
Nicole Mary is among the residents of South Florida struggling to pay her rental costs.

"That's the linear result, you would think, and that's possible," Ken Johnson, associate dean of graduate programs for the Florida Atlantic University College of Business, said.  

Johnson said while it's possible if this trend continues over a long period of time, he doesn't think it's likely.  

"I think in the long run you want to stay in Florida," Johnson said. "You don't want to leave Florida. You just don't."

However, he said it will take some time for things to improve. 

Ken Johnson, associate dean of graduate programs for the Florida Atlantic University College of Business  
Ken Johnson says it could be quite some time before residents see housing prices take a dip from current levels.

"This is not going away tomorrow or in the next six months," Johnson said. "All in all, I think we'll wake up and it might be three, it might be five, it might be 10 years, and we'll look back at this and see this as growing pains. Right now, it feels much worse than growing pains."  

That's especially true for people like Mary, who already works two jobs to pay her rent. She's hoping to see a light at the end of the tunnel sooner rather than later.  

"My son has a medical disability, so we have to put that into play with food, medical expenses, and all that type of stuff," she said. "It’s a lot of money."


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