I moved to North Florida a few years back to work alongside Dr. Steve Sjuggerud. But the sleepy island that Steve lives on wasn't a perfect fit for me.
So my wife and I moved to Jacksonville... We bought a place in one of the "hip" neighborhoods. And now, I commute to Steve's office a few times each month.
When my wife and I were buying a little less than three years ago, we were amazed at the prices in Florida. That's because we had moved from California, where everything is expensive... So at the time, Florida seemed cheap by comparison.
However, as we'll detail in today's DailyWealth, the boom in housing has caught on all across the U.S...
Even the prices in previously "second tier" markets like Jacksonville are on fire. This is a big change. But it doesn't mean a crash is imminent.
Let me explain...
I've experienced a crazy housing market firsthand...
My wife and I moved from Mountain View, California. You might've heard of that area... It's the part of Silicon Valley that's home to tech giants like Facebook, Alphabet, Netflix, and Apple.
The "typical" home value in Mountain View, according to real estate website Zillow, was roughly $1.9 million when we moved. And we lived just a few blocks away from Palo Alto...
That's one of America's top 10 most expensive zip codes. The typical value for a home in Palo Alto hovers around $3.5 million.
At the time, my wife and I lived in a rental home with a handful of other tech workers. And if I'm being honest, it was a bit of a dump...
It was a one-story, 1,400-square-foot home built in 1951. And it hadn't been updated much since the 1980s.
We leased the house for roughly $3,700 a month... We were thrilled to be paying "under market" rents for such a "nice, big house" at the time.
According to Zillow, that dump of a house is worth $2.3 million today.
By comparison, home prices in Jacksonville seemed too good to be true. But despite the attractive prices, Steve knew that North Florida would be a bit of a hard sell for my wife and me... It's hard to pick up and move all the way across the country.
So he went out of his way to detail his "best quality of life for the lowest cost of living" thesis.
If you've followed Steve's work at all, you're likely familiar with this idea. He has been pitching folks on Florida real estate for years...
Low taxes... nice beaches... low property prices (in North Florida, at least). It really is a perfect setup.
My wife and I snatched up a home in Jacksonville for roughly $300,000. It's a large 1920s Craftsman-style house... And it has a detached garage that we've converted into a woodshop.
According to Zillow, our home is worth just more than $400,000 today. That's no Mountain View property... But it's a 33% jump in value, in less than three years.
Simply put, once-sleepy, seemingly second-tier markets are heating up. Jacksonville is one example. But it's happening all over the U.S.
Median home prices are up roughly 16% over the past year alone. And across the U.S., roughly half of newly listed homes are selling for more than their listing price. There's no getting around it... This is a red-hot seller's market.
Still, as Steve explained on Thursday, this isn't some wild speculative bubble. Price hikes are driven by supply and demand. It's just like what I saw back in Mountain View.
For years and years, folks said prices could rise higher in that area. There was only so much space... And there were a lot of people with a lot of money who wanted to live there. That's Economics 101.
Today, the same is happening around the U.S. Second-tier markets are starting to soar. But until supply and demand changes, we can expect that to continue.
P.S. Steve has been tracking this situation for more than a decade. He started pounding the table on real estate in 2010 as we exited the housing bust... And he has been bullish ever since. The crazy thing is, he still sees as much opportunity today as he did back then. If you want to position yourself to profit now – in stocks, without ever touching property – I urge you to check out his new presentation... You can find it right here.
Being worried about another housing market collapse in the U.S. is understandable. But the truth is, the current environment is much different than 2008. And two important factors mean that the housing boom can continue even further... Read more here: Why You Shouldn't Fear Soaring Home Prices.
Housing has been red-hot since before the pandemic struck. But COVID-19 revealed a major imbalance in the American housing market. And the current trend gives us a clue about how long the housing boom could last... Get the full story here: The Reason Housing Will Keep Booming.
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