BREXIT: Pros and Cons To Florida and Brevard County Real Estate Markets
By Space Coast Daily // April 24, 2017
Bobbie Dyer: great news for interest rates
Ever since Britain voted to leave the European Union last year, there has been a major effect across the world financial markets.
Florida has strong ties with the UK, thus it has experienced uncertainty across various sectors, such as tourism, real estate, and trading industries.
According to Reuters the effect of Brexit was evident on the world’s stock exchange, which left many Florida residents worried about what would happen next as Britain has now started its exit process.
There are other several possible negative effects that have been brought about by Brexit, such as traveling to the US state may become more expensive for UK residents, US products may increase in price due to exchange rates, and real-estate investments may decline as UK-based buyers suspend their plans of buying vacation homes in Florida.
However, for Brevard County, Brexit may have the complete opposite effect particularly in the mortgage and real estate markets.
“We have great news for interest rates,” explained Bobbie Dyer, Division President of Dyer Mortgage Group.
“Brexit is driving a flight-to-quality that we have not seen for some time. Although rates have been low for the past five years, current mortgage rates have fallen drastically.”
From 2013-2014, fixed-rate loans (30-year) were at 4.75-5.25%. However, during the Brexit vote, the mortgage rates went as low as 2.5% for a 15-year loan and at 3% for a 30-year fixed-rate loan.
Dyer suggests first-time buyers and millennials take the opportunity to purchase real estate, as she’s doubtful that these low interest rates will stay the same for much longer. She also suggests those who are planning to consolidate their first or second mortgage to consider refinancing.
Other factors that could affect home loan rates include the presidential election, unemployment rate, and fear of inflation.
Experts also aren’t predicting any massive global impact triggered by Brexit. Global economist Jay Bryson mentioned that he is not projecting a global recession “at this point,” although the possibility of a slowdown in some economies could happen.
Local businesses are also hopeful that the effects of the two-year exit process won’t be as large as expected.
“This is affecting the financial markets all over the world,” American’s Research Group chairman Britt Beemer said. “But the withdrawal is a two-year process. A lot can happen between then and now. Everything depends on how much Wall Street recovers.”
Based on the data presented by the Sun Sentinel, Florida’s economy is forecasted to head towards $1 trillion by 2018 with an average annual rate of 2.9% until 2019. A growth in the economy will bring new businesses, jobs, housing, and a rise in consumer spending. It further explained that Brexit will be “a wait-and-see game” to be able to see the deeper impact on the US economy.
A couple of weeks ago, UK Prime Minister Theresa May triggered Article 50 and disclosed that she’s aiming for a ‘Hard Brexit,’ wherein Britain will take full control over its own immigration system and trading following the rule of the World Trade Organization (WTO).
“Let me be clear,” said Prime Minister May as seen in the post discussing the economic impact of a Hard Brexit.
“We are not leaving the European Union only to give up control of immigration again. And we are not leaving only to return to the jurisdiction of the European Court of Justice.”
EU recently ruled out any early trade talks with the UK during the Brexit process, which further affects the global investment, currency, and economy of dependent nations.
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