Florida Real Estate Market
The housing market in Florida is diverse and thriving. It’s difficult to characterize the full real estate market in the Sunshine State, but from the beaches of Panama City to the cooler climate of Jacksonville down the nightlife in Miami and peace and quiet of the Gulf retirement cities, Florida homes are in demand.
A shortage of homes, work from home employment changes, pandemic escape, the recovering economy, no state income tax, and more benefits draw buyers from everywhere. See the Florida Real estate stats for April 2021 below.
Florida’s gorgeous climate is a huge draw for most buyers of home here. While Florida was considered a dead end, for snowbirds and tourism workers in decades past, the state has diversified its economy from agriculture in the middle to tech in the south (See Miami real estate forecast. Much of the state’s housing market is quite affordable compared to other locations such as New York, Atlanta, Dallas, Toronto, Boston, Philadelphia and Chicago.
“Intense buyer demand, combined with the high level of home sales sparked by very low interest rates, continue to reduce inventory levels, which is challenging for potential homebuyers. Due in part to this extreme shortfall of homes for sale relative to high demand, home prices keep rising, which also impacts the availability and affordability of housing options, especially for first-time buyers.” said 2021 Florida Realtors President Cheryl Lambert
April 2021 Florida Home Stats
In April, closed home sales, higher median prices, more new pending sales and increased pending inventory characterized the Florida housing market.
Single-family home sales rose 55.4% year over year, statewide in April totaled 33,264 units, while condo-townhouse sales jumped by 130.9% year over year to 17,330 units. With respect to housing inventory, active house listings fell from 2.3 months last year to 1.1-months’ supply, while condo-townhouse inventory was at a 2.3-months’ supply.
Florida has one of the hottest US housing market forecasts for 2021, 2022 and beyond and bets are that bidding wars will be common. Buyers from New York, Boston, Philadelphia, Chicago, Atlanta, and Toronto are eager to own a home in paradise.
See the Tampa St Petes and Miami real estate reports. As detailed in this epic report on Florida’s real estate scene, home prices will always rise against a lack of supply. Add on the hope of the economic recovery by June or July, and the stage is set for rocketing home prices across the Sunshine state. The price of lumber, land, and steel along with labor shortages are going to impinge on the Florida state housing market as well.
Why are condo and townhouse sales increasing so much relative to single-family home sales? “For one thing, there is just so little single-family inventory available, especially in more affordable price ranges,” said Florida Realtors Chief Economist Dr. Brad O’Connor.
Indeed, Florida house prices rose to a median price of $363,000 which is 22.4% higher than 12 months ago. And condo prices are up too. The statewide median price for condo-townhouses rose 19.6% year over year to $250,000.
This year, as Covid 19 vaccine distribution accelerates and Federal stimulus begins to pour onto cities and states, there will be few breaks for homebuyers wanting to realize their dream of owning a home in Florida. Few states offer the housing opportunities Florida possesses and with foreign buyers searching online, there is huge potential for homeowners to receive record breaking selling prices.
Florida Realtors believed rising interest rates would moderate demand and prices, but I think it’s unlikely. The Fed has promised continuous low rates and said inflation is not an issue. There is pent up demand, low construction numbers and rising savings and wages to lay down on a Florida home.
Real Estate Sales Stats April 2021
Let’s take a look at April’s Florida housing statistics for Florida Realtors. Closed sales grew 443 over March’s numbers and home prices on average grew $9525 from March prices. Significantly more buyers are paying for purchases in cash (+150%). Sales are happening faster with time to contract and time to contract down 61% from last year.
The average house sold price jumped 46% year over year to $530,083. The lack of affordably priced homes and more sales of luxury homes is pushing this average price through the roof.
Pending House Sales
Pending house sales fell by about 3200 units, however levels are still up 60.7% from 12 months ago. Sales are slowing due to low supply, high prices, and lingering Covid 19. Prices have jumped $10,000 in just one month. This could be a sign that things are going to heat up soon.
New House Listings
Always an important indicator of market trends, new listings rose slightly again in April. This is up a strong 45.5% from last year, however that was a tough month at the beginning of the pandemic. There were 500 more homes listed during the month.
Housing inventory Keeps Sinking
This inauspicious chart reveals the quick decline of housing supply in the state. The MSI is now down to 1.1 months.
Screenshot courtesy of Florida Realtors.
Florida Home Sales by Price
Home sales in the affordable range slumped while homes priced above $250,000 to a million dollars or more have risen dramatically year over year. Sales of houses priced below $200,000 dropped 7.3% from April 2020. Affordability is becoming a more serious issue for those hoping to buy a house in Florida.
What is driving Florida Home Sales?
Brad O’Connor believes the type of home being purchased is a factor, but most of the demand is for single family starter home sales. Mortgage rates are much lower than last year, down to record lows in the 3.2% area currently. Starter home sales suggest more millennials who are getting older, have some cash (savings during the pandemic) and are eager to buy. Homes will increasingly be priced out of their reach. This should lower sales, however don’t expect the home price forecast to dampen this year or next.
The pandemic is no doubt a factor too, as new work at home workers and independent business owners seek to leave inner cities in the North (Manhattan, Boston, Philadelphia, Atlanta, Chicago, Cleveland, Indianapolis, Minneapolis, etc) to find single detached homes anywhere. They’re looking for safety from Covid 19 and more room and nice weather to work in.
It makes sense that the stress of indoor confinement would drive so many to seek more spacious accommodations. This trend should drive Airbnb and condo rentals in Florida as well. The pandemic will drive more sales right into the spring, where the economic recovery will take over.
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.
House Prices by City
Wondering which cities might offer the best value in 2021? House prices have increased the most in Destin/Fort Walton, Homosassa Springs, Naples, Sarasota Bradenton, Pensacola, Punta Gorda, Melbourne, Miami Fort Lauderdale, and Cape Coral.
Condo Sales Stats for April 2021
The condo market in Florida is surprisingly alive and well. And as the pandemic health fears subside, we wonder high demand for Florida condos will be from buyers who are priced out of the single detached market.
Condos sales grew by about 800 units to a monthly total in April of 17,330. This is 131% more than 12 months ago.
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:
- low mortgage rates
- low Florida taxes
- people getting in before the boom and rocketing Florida prices
- greater square footage living
- economic concerns and debt in Northeastern states
- more houses in the south vs apartments in the north
- Covid 19 outbreaks are easing
- cold winter and Covid depression is making buyers seek warmth, sunshine, beaches and water, and year-round activity; no -40 or shoveling snow in Florida
- economic diversity in the Sunshine state
- coming boom of recreation and travel
- pent up consumer demand returns in a wave
- falling USD value
- the reduction of work shutdowns
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.
Given the devastation of the Corona Virus pandemic shutdown, Realtors did a good job keeping the market thriving. From Boca Raton, to Miami to Tampa, as in all US housing markets, the forecast is a full return by summer of 2021.
Luxury Homes in South Florida
Tampa Bay Home Sales
In Tampa and Hillsborough County, active listings were down more than 40% in all four counties. Median prices hit $294,900, a rise of 15% from last year.
In Miami Dade County, house sales grow 23.3% to 32,819 units, while existing condo-townhouse sales rose 52.6% vs March 2020 to 16,518 units. Single-family houses in Miami selling between $400K to $600K jumped 81.4% year-over-year to 488 transactions in March 2021. And Miami existing condo sales selling for $400K to $600K grew 136.3% to 241 sales. See more on the Miami real estate market picture.
Businesses and real estate offices continue to open, and more business is being done online. Search data for real estate shows buyers are doing a lot of searches online for houses for sale.
Economic Challenges ahead for the Sunshine State
Slowing Tourism: What will happen with prices in 2021 if there is a vaccine and travel to Florida returns full tilt?
Disney World closing, Cruise lines docked, NHL hockey and NBA basketball cut short, MLB baseball training canceled, spring break vacation canceled, and restaurants closing. Florida’s $40 billion tourist industry is primed to return.
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Florida Housing Market Forecast – copyright Gord Collins
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