Florida Real Estate Market
Despite high rising mortgage rates for the last year, home sales in Florida have been relatively strong. Florida home prices too have risen to record heights.
In July however, the Fed rate rises are beginning to take a bite out of the Florida housing market. Both Florida Realtors and Redfin report year over year rise in prices, which given how high prices had risen in 2022, has to be a surprise.
But sales on the other hand dropped nearly 12% vs June and are down 6.4% from July of 2022. Yet given the steep rise in mortgage rates, it’s remarkable how many people are buying homes and condos in the Sunshine State. Florida’s Realtors, banks, mortgage agents and property management companies have all been busy in 2023. Buyers are on searching for their Florida dream home.
“High mortgage rates this summer have continued to slow the annual rate of home price growth,” says Florida Realtors Chief Economist Dr. Brad O’Connor. “The median sale price for single-family homes in July was $415,000, a 0.7% percent increase over last July’s median of about $412,000. This price growth is slightly greater than what we’ve seen in recent months, but not by much. The median sale price for condos and townhouses, meanwhile, was up 4.6% to $319,000, which was its largest year-over-year gain since April.”
Florida Drawing More Buyers
Rising prices tell us a lot about how attractive the Florida real estate market is. It may be due to thousands of new buyers from other US states with high taxes and diminished business outlooks, particularly blue states where troubles mount each day.
And the state’s GDP has been one of the strongest in the nation, with plenty of homes being built. Less regulation in Florida translates to lower costs, more home construction, more new business growth, and more optimism.
Florida is rated as the favorite place to move to and it’s certain more will move here as homes are built.
Hundreds of small, medium, and large businesses are relocating to Florida, Texas and Tennessee as the economy cools. And Florida house prices have become more unaffordable for the majority of buyers.
Active and New Home Listings
As with so many states, it’s the diminished number of homes for sale that is keeping Florida Realtors from being too busy.
Florida Home Prices City by City
In Florida Realtor’s last homebuyer profile report, they found that
- First-time buyers comprise 21% vs 34% in the rest of the country.
- Average age of buyers was 57 years with average income of $95,900.
- 65% of recent buyers were married , 18% single females, 8% single males, and 7% unmarried couples.
- 24% purchased because they wanted to own a home of their own.
- 80% of buyers in Florida financed their home purchase (for 85% of value).
- 55% of buyers, used their savings while 42% used the proceeds from selling their primary residence.
- the typical Florida home seller was 63 years old who lived in their home for eight years before selling.
During the July 2021 to July 2022 time period, Florida’s population rose above 22 million people. That 1.9% increase was the largest of any US state. Today the migration to Florida continues. The climate, low taxes, and job market make it very attractive, especially to the 55+ buyer who sees Florida as a good retirement destination and a good prospect for rental property income.
Although the demand is always there, the mortgage payments and US government strife are making buyers hold off on purchasing. And homeowners are staying put as they are across the entire US housing market.
Compare Florida house prices in Los Angeles, New York, Los Angeles, Dallas, Denver, Atlanta, Vancouver or Toronto, and Florida real estate remains a bargain with a strong demand profile for the next 5 years at least.
Home Prices in Florida
Buyers and sellers, find out more about conditions in the New York housing market, Boston housing market, Philadelphia housing market, Toronto housing market, Atlanta housing market and Chicago housing market.
In-migration is highest in the nation in Florida. Florida and Tennessee are nearly tied for the most attractive destinations for US retirees.
More retirees who have cash may appreciate being able to buy in the Sunshine state at a more affordable price, but that lower-priced real estate is drying up fast. There are plenty of demographic, tax and economic reasons that Florida’s market may be the most resilient. See more on the US housing market forecast.
Florida Business, Cost of Living, Travel, and Low Taxes
Florida real estate is still some of the most desirable property to invest in or live in, regardless of politics and the economy. IMHO, Florida home prices can only rise, given lower rates coming and a persistent lack of supply to meet demand from its typical buyer demographic.
The climate, low tax, increased entrepreneurialism, pro-business attitude, ocean lifestyle and more keeps drawing real estate investors and home buyers from everywhere. Cities such as NYC, Boston, Philadelphia, Atlanta, Los Angeles, Toronto and other northeastern cities are where many buyers come from.
And the travel market is a huge source of new home buyers. Those visiting for a winter vacation are very well-targeted prospects for a home purchase. And travel brings in many real estate investors who are no doubt seeing Florida is really coming to life.
The forecast for the next 3 months is stronger than normal, leading into a 6 month growth period of unusual intensity. The 5 year real estate market outlook for Florida looks promising. This should encourage buyers to pay more and sellers to demand more for hard to find houses.
Florida Population Growth Outlook
A study/prediction by http://edr.state.fl.us/ suggests Florida’s population will grow by 60,000 over the next 3 years ( a compound growth rate of 1.53%).
The edr.state study also shows further that population growth may begin to decline, death rate to climb, and household size begin to shrink after 2023. Overall, net migration is predicted to remain high which supports long term house prices.
Fewer listings is typical of the national housing market, or housing markets in Boston, Tampa, Miami, New York, California, Dallas , Denver, or San Diego. Homeowners are very reluctant to sell in this economic climate. More stats on Florida homes for sale below.
Why the Demand for Florida Real Estate?
Here’s a few good reasons why the brisk search for Florida homes for sale:
- one of the strongest state economies
- business-friendly state with fewer crippling regulations
- low Florida income taxes and business taxes
- greater square footage living
- economic concerns and debt in California, Illinois and Northeastern blue states
- buyers thinking ahead to new winter with the Florida warmth, sunshine, beaches and water, and year-round activity; no -40 or shoveling snow in Florida
- economic diversity increasing in the Sunshine state
- growing boom of recreation and travel
These and more might be the key factors driving the relentless growth of the Florida housing market. It should keep Florida Realtors busy and happier.
The Much Desired Florida Real Estate Market
Florida has a lot going for it. Lower-income and property taxes, warm weather, no estate taxes, and incredible recreation and beaches make this state the most desirable place (i.e, for New Yorkers and Manhattanites) to buy a home. While California cities are in freefall from evaders, Florida cities including Boca Raton, Miami and Tampa, are often among the best cities to buy real estate. Compare to home prices in Texas, Georgia, Colorado, or California.
The key stats below might be active listings and initial listing prices. They show a severe downward trend in homes for sale available, particularly at cheaper prices, and that listings are still growing in the upper price tiers.
Luxury Homes in South Florida
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