Florida Housing Forecast 2020 | Real Estate Update Miami Orlando Tampa

Florida Housing Forecast 2020 | Real Estate Update Miami Orlando Tampa

Florida Real Estate Market 2020

The Florida housing market fared well in February but new illness is being detected in the state (see below). A rise in foolish behavior is presenting a big threat to millions of Florida seniors. Italy suffered over 800 deaths in one day so we’re hoping this won’t be Florida’s fate.

Florida Realtors Association reported a 9.1% rise in single family home sales along with a 10.9% rise condo sales.  Across Florida, the median price for single-family homes rose 8% to $270K while the condo median price lifted 6.7% to $200K. Sales in Miami, Fort Lauderdale, Orlando, Tampa, Sarasota, Clearwater and St Petes were all up substantially.

But now, the Corona Virus workplace shutdown is beginning to affect all real estate markets in Florida.   There’s big attention on the California and Texas housing markets as oil prices plunge and international trade stops.  All indicators of a short but intense US recession highlighted by crashing stock markets.

But Florida has a very serious issue on its hands with the demise of the tourism sector.

Demise of Tourism: Will this Cause a Florida Housing Crash?

Disney World closing, Cruiselines docked, NHL hockey and NBA basketball cut short, MLB baseball training cancelled, spring break vacation cancelled, and restaurants closing.  Florida’s $40 billion tourist industry is suddenly gone.

President Trump’s $1.3 trillion dollar stimulus package could help but home buyers likely won’t come through this unscathed. With a worse debt to income ratio and sketchy employment picture, they may not be able to get a mortgage. It will generate funds for businesses to continue paying their employees and help revive banks, airlines, and hotels.  That will be vital for Florida.

Florida a hot zone for illness right now as reported by healthweather.us. Something is happening.

Screenshot Courtesy of Healthweather.us

The details are unclear, but previous stimulus plans would provide medical coverage, and extended unemployment insurance benefits. It might be enough to get Floridian workers through a tough spring.

Florida Realtors Chief Economist Dr. Brad O’Connor says “that’s impossible to know at this time, given that Florida – and the rest of the world – face the enormous challenge of fighting a global pandemic. The emergence of the coronavirus is a perfect example of what we might call a ‘black swan’ event, which for economists means a very rare, difficult-to-predict event that originates from outside of the economic realm but imposes a massive shock to the economy.

Avoiding a Mortgage and Housing Disaster

Stimulus money could reduce the chance of a severe prolonged Florida recession and stock market crash. And we know the Florida housing market would also crash without it. 40% of buyers are millennials looking for homes in the affordable range. Florida’s homes are cheap enough that stimulus helps, whereas homes in California for instance are far out of the reach of wage earning millennials. It may help avoid another banking disaster nationwide.

How Will the Stimulus Package Help Florida’s Economy?

Florida typically winds down after the spring season so overall, so the Corona Virus shutdown shock isn’t as great as it is for other states. If the Corona Virus shutdown gets prolonged to July, we’d have to wait for a real estate sales rebound in August.

Funds would keep businesses afloat and perhaps avoid a cascade of mortgage defaults and business failures across the state.  Now that spring break tourists are gone, the pandemic potential may ease.

Yet the Democrats could play football with this one to discredit President Trump, as we’re only 8 months away from the Presidential elections.

Snowbirds, Millennials and investment condo purchasers were liking the Florida housing market a lot in February See the Florida housing report below.  Homebuyers are holding off on purchasing.  They’re hopeful this recession will not result in them losing their jobs.  However, it looks inevitable and employment insurance will get a good workout this spring.

Some experts had forecasted a 10% fall in real estate sales but that has to be very optimistic.

Enjoy this report on real estate in Florida cities and contrast this report with the US housing market forecast for 2020.

Please do share this Report on Facebook, and mention it in your blog!

Florida Real Estate Summary for February 2020

The housing market across Florida was doing quite well before the Covid 19 pandemic.  The Florida Realtor’s Association reports that pending sales of home rose by  over January of 2019.

New Pending home single family sales across Florida rose 12.5%, YoY and there 3500 more pending solds than January.  The median sales price rose 8% to $27,000 year over year. The total dollar volume of Florida house sales rose from 7.5 billion dollars from 6.6 billion dollars in January.  That was a 17.7% increase from last February.  Florida’s real estate scene was hot.

Will the Corona Virus Chill this Hot Market?

However, the big story of late of course is the Corona Virus effect.  The forecast is for January property prices to register lower  due to the cascading effects of lower economic activity. The stock market has had a sharp pullback and this will affect investment and trade activities.

As Brad O’Connor of Florida Realtors, says, the market has been hot. We’ll take a look at previous homes sales, prices and listing trends below. We have 4th quarter charts and trends to report here too.  Check back in March for the February totals.

Florida Home Prices Rise

The median home selling prices rose 3.9% to $265,000, while the average for condo townhouses was up 9,6% to $200,000.  Statewide condo inventory was down 11.7%.

Monthly Single Family Sales Chart. Screenshot courtesy of the Florida Realtor’s Association.

 

Monthly Single Family Sales Price history. Screenshot courtesy of the Florida Realtor’s Association.

 

Closed Sales February. Screenshot courtesy of the Florida Realtor’s Association.

Florida Single Family Sales Volume in Dollars for February. Screenshot courtesy of the Florida Realtor’s Association.

 

 

Pending Home Sales February. Screenshot courtesy of the Florida Realtor’s Association.

Active house inventory in Florida February. Screenshot courtesy of the Florida Realtor’s Association.

New and Active Home Listings

On the negative side, new listings dropped 6.2% year over year, while active listings fell a whopping 16.4%. Months of supply dropped 20% and the issue of low availability should likely cause prices to rise.

New listings of homes between $150,000 and $200,000 dropped significantly in February, reflecting the disappearance of cheap housing in Florida. Above $200,000, single detached homes are more plentiful.

Home Prices and Sales by City

Cities which saw the highest growth in sales activity include Gainesville, Naples, Pensacola, Port St Lucie, Sarasota Bradenton and Ocala. Biggest price increases for homes occurred in Naples, Ocala, Panama City, Tallahassee, Tampa Bradenton, Orlando, and the Villages.

Florida Condo Sales and Prices

Overall statewide, condo prices rose 9.6% while sales grew 14.5%. Gainesville, Homosassa Springs, Delton/Daytona Beach, Sebring, and Miami Fort Lauderdale saw the largest price gains. Biggest gains in condo sales occurred in Crestview Fort Walton Beach, Delton Daytona Beach, Homosassa Springs, Sarasota Bradenton, Panama City, Punta Gorda, The Villages, and Sebastian Vero Beach.

Florida Housing Stats 4th Quarter 2019

Homes priced below $150,000 dropped substantially and closed sales fell in a normal year ending fashion.  New listings dropped overall but rose in the $200,000 to $600,000 price range. Affordability is a more pressing issue in Florida.

Florida Closed Sales January 2020. Chart courtesy of Florida Realtors.

Florida Average Home Prices January 2020. Chart courtesy of Florida Realtors.

The economy is strong in metros such as Tampa, Sarasota, Miami, Fort Lauderdale, Orlando, and Jacksonville. Consumer confidence is strong and demand for Florida fruit and vacations is high.

The national economic outlook is excellent for 2020 and beyond.

Contrast Florida home prices with those in California or New York, and combine this with the favorable tax situation here, and we’re surprised more baby boomers aren’t selling and moving to the Sunshine state.

Multifamily units in Sarasota

Questions?  When is the best time to buy a home in Florida? When will the Florida housing market crash?  Will the US housing market crash? Should I lower my sales price now? How do I buy a house in Florida? Perhaps it’s time to contact a Florida Realtor to help you find the deals and perhaps scare up a gem.

4th Quarter 2019 Real Estate Stats January 2020. Chart courtesy of Florida Realtors.

Zillow Florida Price Forecasts

Zillow gives Florida a good  rating. And that’s without the current pessimism and crashing stock market. They predict home prices will rise to $272,000 in February 2021 for a slight 4.2% growth.

Florida Home Price Forecast. Screenshot courtesy of Zillow

Homes with negative equity has remained at 7% of owners. The state has a mortgage delinquency rate of 1.4% which is higher than the national average.

Zillow says bottom tier prices are $152,000, middle tier at $247,000, while top tier homes are now up to $423,000. Naples has the high home prices at $329,100, followed by Miami down now to $300,100. Tampa homes are a very reasonable $184,000, while St Petes at $181,100 and Orlando at $167,100 seem a small price to pay for a slice of Florida heaven.

Florida Rentals

Owners and Investors will be pleased by the growth curve in average rents in Florida.

Average Rent Prices in Florida. Chart courtesy of Zillow.com

The condo market in most US cities is hot in spring, but especially so in South Florida and Miami Dade. Foreclosures/REO, and Short Sales are down signalling the Florida condo market is healthy.

Sales/Prices Back in the Summer of 2018

Here’s what happened in summer of 2018 just for context. Now that we’re over the trade transition, with mortgage rates forecasted to head downward and payments reduced, we might forecast that Florida’s 2019 prices will be slightly higher than these:

The Orlando/Kissimmee/Sanford housing market saw single family home sales grow to 2533 units in February.  House prices jump 6.1% to $283,000 while sales grew 5.7% .  The median price for Orlando condos increased 20.4% to $181,000, a rise of 2.3% YoY. One report has it that only a 1.3 month of supply of single-family homes listed at below $2000,000 is available.

The Tampa St Petes Clearwater Sarasota Housing Market was hot. It ranks 6th in loan applications from those ready to move. According to Zillow, the median home value in Tampa is $209,200. Single family prices have risen 7.2%  YoY.  Zillow predicts they’ll rise 9.7% within the next 12 months.

According to Florida Realtors Association, the median price of Tampa homes is $252,200 while the median price of condos is $183,000.  3,586 house were sold while 1361 condos were sold.  That was a 6.1% rise on condo sales over January.

In Miami, Fort Lauderdale, West Palm Beach, there were 3121 closed home sales which was 9.9% more than January volume. Prices rose 6.9% to $373,000.  Condo sales rose 6.7% to 3148 units while condo prices rose 5.1% to $205,000.

As mortgage rates rise and loan qualification gets tougher, while prices rise, first time homebuyers are in for a struggle to buy in the Orlando, Tampa, Hialeah, Fort Lauderdale, Naples or Florida Key areas.

Should You Buy a Home in Florida in the Next 5 Years?

The doomsday people are always calling for housing crashes and stock market crashes. Yet, economist forecasts seem to be optimistic, pointing to flat interest rates and strong employment rates and GDP. Even better, oil and gasoline prices are falling, more people will qualify for a mortgage, wage growth is picking up, and housing prices should continue upward for 5 more years.

The housing market in Miami, Tampa/St Petes/Sarasota, Orlando, Panama City, Sarasota, Naples, Fort Lauderdale, and even Boca Raton are compelling real estate investment value propositions for snowbirds and other buyers in North America.

Interest in buying Florida properties is persistent and given the strength of the Florida economy, and tax situation in the sunshine state, and an aging population, we should see strong prices for many years.   The recent tax changes may discourage speculative investment but speculators may consider Florida cities some of the best in the nation.

Homesnacks believes these Florida cities will have the strongest population growth which translates to strong housing demand:

  1. Sweetwater
  2. Groveland
  3. St. Cloud
  4. Doral
  5. Fruitland Park
  6. Palm Springs
  7. Winter Garden
  8. Parkland
  9. Ocoee
  10. Apopka

Florida Housing Market History

Lately, the Florida housing market is characterized by a lack of new construction, big price reductions on new condos, a disappearance of South American property buyers, softened house and condo prices, and of course, low taxation rates.

Choosing Your Florida Home Style

Anyone considering buying a home in Tampa, Orlando, Fort Lauderdale, Panama City, Miami, Port Charlotte, St Petes, Sarasota, and other fantastic Florida state locations  will be impressed with the variety of homes here.  From modern 3 bedroom bungalows to condos in towering buildings to quaint beach houses to spacious multi-million dollar mansions, you can have your dream life, walk the beaches, shop for hours, and never have to shovel snow.  For a lot of buyers, that’s a compelling value proposition.

See more on the Dallas housing market,  Houston real estate market, San Diego Real Estate market, Seattle real estate market, Vancouver real estate market and even the Costa Rica Real Estate market are also preferred destinations for retirees and those looking for luxury homes.

PWC in its new major US housing report, names Miami/Fort Lauderdale/West Palm Beach as the 3rd highest target destination from migrating people from other cities in the US.

The luxury real estate market was hit hard in Florida, and there is an oversupply of luxury homes. However, interest and sales are expected to rebound, and homes for sale in Fort Lauderdale, Naples, and Miami are expected to rise.

Should You Buy a House/Condo in Florida? 8 Things to Consider

Whether you’re buying a second home/vacation home or you’re considering moving to warm, sunny Florida, look at a few matters beforehand:

  1. can you afford to live in the region or neighborhoods you have targeted?
  2. which cities and neighborhoods are safe and pleasant to live in?
  3. summers are hot and humid. Can you take the heat and the indoor life?
  4. do you like golf, fishing, walking the beach, boating, and water sports?
  5. how well can you run your business from Florida and how much back and forth travel will you need to do?
  6. what is the actual cost of living?
  7. how much will your mortgage payments be for the next 10 years?
  8. is there a true demand for your area of work/profession?

A lot of people love Florida and some don’t like it at all. If you could live here during the winter only, as many snowbirds from New York, Toronto, Montreal, Boston, Philadelphia, Chicago, and Washington do,  buying a home/condo might be a no brainer. All you’d have to focus on is finding a home at a bearable price.

Florida’s $1 Trillion Dollar Economy

A lot of optimistic forecasts of Florida’s economy over the short and long term suggest Florida’s housing market will grow too. You can view the Florida & Metro Forecast.

That report says the Sunshine State’s GDP will expand 2.8% through 2022 and job growth has been upgraded to 2.2% in 2020 and 2.0% in 2021, which is much higher than for the national economy. Unemployment will drop to 3.0% in 2020, 3.1% in 2021, and 3.4% in 2020.

Personal income in Florida will rise 3.1% in 2020, rise in 2021 and then ease back to 3.0% in 2022. Retail sales was expected to grow 4.2% from 2019 to 2022. Strongest job growth is forecasted to be in Professional and Business services (+4.9%), construction )+2.4%) and Leisure & Hospitality along with education at 2.1%.

Housing starts are expected to rise 144,700 in 2020, which is down 3,000 from 2019, and then rise to 135,000 in 2021, and up to 138,500 in 2022. House prices are expected to decrease as demand is filled.

That report couldn’t foresee the impact of the Corona Virus scare. Experts believe the setback will only last till the spring.

With flight bookings disappearing, we can expect a tough start to the year in Florida.

 

South Florida’s population hit 6 million for the first time, and Miami Dade hit 2.7 million residents. Tampa Sarasota region was in the top 10 nationally for population growth and Orlando saw 48,000 new residents arrive.

That’s generated strong demand for housing and rental units in South Florida.

As reported in Tampabay.com, the Florida economy will reach $1 Trillion this year and $1.074 trillion in 2019. Florida is an important state having 5% of the US economy but 10% of new jobs. Tourism and housing were the key industries.

Hurricane Irma and the destruction of the citrus crop have suppressed the Florida economy and the state has difficulty attracting skilled workers. Wages do lag, yet real estate in Florida overall is very reasonably priced. Only Texas is a better bargain.

With the Florida economy rolling along nicely, there’s no reason to believe there is a downside to buying property in the Sunshine State. And sunshine is a key benefit for most buyers here.

Interest in Orlando and Tampa real estate has been particularly strong and that’s likely due to the lower prices. Even homes in Boca Raton and Fort Lauderdale are half the price as those in Miami.

However the economies in Tampa and Orlando are holding their own and drawing in new residents due to lower than expected prices on condos and homes.

Tax Cuts and Jobs Act Effects

The experts are still struggling with the effects of the Feds tax bill, amidst a housing slowdown.

What the Tax Cuts and Jobs Act does mean:

  1. sales of homes between $750,000 to $1 million will slow because loan interest isn’t tax deductible any longer
    purchases from New York buyers seems to be growing
  2. income tax cuts for almost everyone means people will have more money to buy real estate and pay mortgages
  3. the reform retains sellers’ capital gains exemption, which excludes the first $500,000 in profits for couples and the first $250,000 for single filers

Let’s not forget Florida’s benefit of having no state tax. Combine that with the reduced federal tax cuts, and companies that are bringing their manufacturing and head offices back to the US , Florida is an ideal place to come home to.

Florida Home Prices

According to Zillow, home prices in Florida are expected to rise slowly.  That has to look good to home sellers in Boston and New York, as well as Canadian buyers in Toronto, who have home values that rival the highest in Miami.

Chart courtesy of Zillow.com. Comparison of home prices with California, Texas, New York and Nevada

When is the best time to buy real estate?  Find out more about the best investments in 2020 including investing in real estate in 2020.

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Digital Marketing Services: Looking to improve your company’s marketing success online? An SEO consultant expert uses advanced search engine optimization and authority building content strategy to dominate rankings. Whether it’s real estate seo, hotel SEO, or for tech startups, Gord Collins brings multiple talents in SEO, content, and social media to help clients in Miami, Tampa, Orlando, or anywhere in Florida.

Will There be a Florida Housing Crash? | Florida Real Estate MarketWill House Prices Fall?Miami Housing Market | Tampa Real Estate MarketWhen is the Best Time to Buy a Home in Florida? | Where Can I Find a Good Florida Realtor? | Are House Prices Going to Fall? | Will Prices Drop in California? | Dallas Real EstateWill Mortgage Rates Drop? | Where Can I Get the Lowest Mortgages? | Forecast for the 2020 Housing Market? | Are we in a Housing Bubble?

 

22 years of experience as a content researcher, strategist and SEO expert for marketing agencies and his own company. Gord's investigation into housing markets, stock markets, and AI marketing strategy helps clients achieve market dominance. Some of Gord's blog posts have achieved half a million pageviews with over 7,000 social media shares, revealing Gord Collins special talents for building reach and impact. Visit the AI Marketing website for an introduction to the AI marketing era. Artificial Intelligence is lending extra benefit to the power of marketing software which is enhancing SEO, Copywriting and Sales. Gord offers a new brand of SEO services and to regain his reputation as a leading SEO expert. See his 2nd book which describes the powerful relationship between SEO and Content Strategy. Gord's passion is researching algorithms, trends, forecasts, and market statistics to establish clients at the top.

There are 2 comments for this article
  1. Raul at 2:14 pm

    The Doral market is already crashing. Homes bought for 850k are now selling for 650k. Homestead Is another place where people have paid 335k for a home but didn’t realize the high cost of taxes (average tax in Homestead Florida is 5k) in this city due to the new developers taxing a CDD TAX that will remain on your taxes to be paid over 30 years. Prepare yourself the market is going to drop in the next year there are signs already. January 2020 expect it to drop in 2021 not go up. People in Florida spend more than they make they want to live the wealthy life and eventually they won’t have a pot to piss in at the end for over paying on a property they can’t afford.

    • Gord Collins Author at 4:14 pm

      Raul, your property taxes are the same as most metros, and people are raving about the tax savings in moving to Florida. You can build cheap there. Looks like your area is going through some turbulence. The economy is excellent and we’d expect demand will grow from those can afford to live there.

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