Inflation, supply chain issues, and Florida’s insurance crisis are all creating some signs of distress, even in South Florida’s hot real estate market.
High interest rates are making debt financing for real estate projects tricky to navigate, prompting people in the industry to seek financing tools beyond traditional banking. But there are other red flags.
“People are having to get creative in order to get deals across the finish line,” Jaime Sturgis said. “A lot of people are really looking for bridge options, where they can get through the next 12 to 18 months.”
Although real estate prices have soared to great heights, Sturgis doubts they have peaked thanks to the bustling demand and the region’s shortage of supply.
“We have a finite quantity with still tremendous demand,” Sturgis said, highlighting the barriers to sprawl imposed by the Atlantic Ocean to the east and the Everglades in the west. “In comparison to other places, literally all over the country and the world, I would say South Florida has been one of the most, if not the most, resilient markets in spite of these global macroeconomic factors.”
The supply and demand mismatch is keeping that money going through the region for now.