What the Rest of 2021 Holds for Real Estate in Apopka

By Josh Mishin

The American property market has had a strange eighteen months. At the start of the pandemic, some areas saw property values drop. However, since the middle of 2020, property values throughout America have been skyrocketing.

This is certainly the case in Florida, and Apopka in particular has followed this trend. At the start of 2020, the average value of a home in Apopka was approximately $256 thousand. At the end of August 2021, the average value had gone up to $314 thousand! In other words, it costs almost $60 thousand more to buy a home now than it did in January last year.

These figures have struck fear into the hearts of many experts and laymen alike. After all, the last time property values were rising like this, it was followed by a massive crash.

The good news is that the scenarios are entirely different. While prices will balance out, and maybe even drop again, a crash is very unlikely.

Let’s take a look at why home values are rising, whether they will continue rising, and what this means for homeowners in Apopka.

Why are Apopka home values skyrocketing?

There are a number of factors that have caused property values in Apopka and throughout America to rise but they all come down to basic principles. When it comes to real estate, prices are very immediately impacted by supply and demand ratios. Since the past eighteen months have been economically tough for tens of millions of Americans, there is not a huge increase in demand for property.

Rather, the issue is a major decrease in supply. Few homeowners are selling their homes because of the uncertainty of the times and a lack of destinations to move to. Furthermore, construction of houses came to an almost complete halt at the start of the pandemic. Due to construction supply problems, it has been slow to get going again.

So, few existing homes are being sold and a limited number of new homes have been built. People who want to buy a home therefore have very few options and are paying exorbitant prices.

Will home values begin to balance out?

In the early 2000s, property developers were building new homes at a blistering pace in order to meet the huge demand that was driving prices up. Eventually, the housing bubble popped. There was far too much supply and newly-built homes stood empty. Will the same thing happen in the coming months?

Oversupply is unlikely to become an issue. Yes, developers will continue building homes, trying to make up for the shortfall of the past eighteen months. But they are playing catch-up and are far from saturating the market. Furthermore, as life continues to return to normal, more people will have the wherewithal and desire to buy homes. Demand will continue to rise.

Therefore, it seems likely that we will see house prices balance out. They won’t skyrocket forever, but they probably won’t see a dramatic drop either.

What does this mean for Apopka homeowners?

For Apopka homeowners, this simply means that the value of your home is significantly higher today than it was eighteen months ago. However, that does not mean you will benefit from selling, as you would have to pay for a new home at an inflated price.

Investing in property in Apopka as 2021 wears down may also not be wise. After all, you would be buying at what is likely a peak. The value of your property may not plummet, but you may struggle to profit.

Does this affect your homeowners insurance? Probably not. Think about this: what is homeowners insurance? It does not refer to cover on your actual homeownership. Rather, it covers the structure and contents of your home. The value of your home’s structure has not changed. Fixing or rebuilding a home costs close to what it did eighteen months ago. So too, the contents of your home have not changed in value (at least not because of the housing market’s surge).

As an Apopka homeowner, you can continue living as normal. Your home’s value is likely skyrocketing, but that comes at no benefit or cost to you. It is certainly not a time of stability, and there are therefore no guarantees for people who decide to sell or buy homes in what remains of 2021.