Florida Real Estate Market

Despite a massive 60% increase in home listings across Florida, home prices remained near last month’s record median price of $429,581.

For buyer’s, there’s pain knowing you can’t afford a Florida home even as listings rise and as prices keep rising. Where is the optimism? Let’s look further into that now to help you with your timing. The 2025 housing market and economy look positive (depending on elections). Its setting up for booming sales for Realtors in the next 5 years, as prices ease, supply grows, and inflation comes under control.

The trend to buying in the Southern US eased this year, yet should catch fire again in 2025. In any economic or political climate, Florida is an inviting place to buy a home and live. Migration and online real estate searches show conclusively that Florida is the golden child of real estate. Decay in other states will only fuel more interest from out of state buyers.

The release of Florida Realtor’s May housing sales report shows seasonal sales growth for the 2024 spring/summer period is normal so far, yet lower in volume than previous years. Sales fell .5% year over year but are at near record levels, and total transaction value rose 4.5% year over year in May 2024 to $16.6 Billion.

Florida Realtors Report for June just out! Sales down again.

Buyers Looking for Buy Signals

Which means there are buyers for Florida real estate. In fact, migration into Florida is still high. It’s the only state that has a real inflow growth. People are moving out of Illinois, New York, Massachusetts, and leaving California to evade social malaise, cultural erosion, and tax challenges there. They investigate the Sunshine State for its economic, lifestyle, tax and income advantages. The move is often an expression of hope for renewal and a better place to raise their children. After all, buyers are often Gen Z’s/Millennials starting families. Their lack of funds and credit rating remain stopping points for home sales.

Florida is business friendly with companies relocating here, and the tax advantages are strong. Babyboomers here can pass on their wealth to their kids without tax.

Beautiful Florida continues to draw home buyers from across the globe making it part of international real estate (i.e., Miami). The cities of Sarasota, Cape Coral, Tampa and Orlando lead the way with strong growth.

Florida is drawing more attention of late because some real estate analysts warn of a possible price correction. Some prospective buyers/investors may delight in a Florida housing crash and some bargain homes/condos are beginning to appear. All of the factors/signals, threats and issues are discussed below.

Home Inventory Grew 255% in Last 2 Years

Rising inventory and days on market growth are scaring investors and homeowners however. The national housing market shows the same trend, but inventory growth is much stronger in Florida. Buyers might want to look closer at why sellers would want to get out, and why they’re not accepting offers.

Affluent investors have driven up home prices and many bought at low interest rates, expecting they would fall soon. With more news about Florida’s housing market being released online, baby boomers will be more reticent than usual in the second half of 2024. The uncertainty over the Presidential election is paralyzing some investors.

Home Listings Might Actually Pick up Pace in H2 2024

However, FED chair J Powell is holding strong on the higher rates, meaning mortgages aren’t refinanceable. Many of the sellers holding back will have to unload their properties. As the pressure to sell builds, it will likely build to a crescendo in September when the FED doesn’t cut rates or by only .25% which will bring buyers and sellers into the sobering light of reality about the US economy.

As this graphic from Redfin.com shows, the number of homes sold above list price reflects buyer demand. It has fallen dramatically from pandemic years to normal levels pre-2020.

Homes sold above listing price - reflecting buyer demand. — Homes sold above listing price – reflecting buyer demand. Screenshot courtesy of Redfin.

Florida Home Glut

New listings rose 15.2% year over year, adding to the rising glut of homes sitting unsold. Inventory, according to Reventure, has grown 255% since 2022, and not many housing markets/economies can handle that level of growth in 2 years.

Redfin reports there are currently 200,926 homes for sale in Florida.

Growth in home inventory in Florida last 6 years. Screenshot courtesy of Reventure.

Homeowners Stubbornly Refuse a Lower Price

Homeowners are so far refusing to accept anything lower than their desired price. However, should the US economy and Florida economy begin to stagnate, we wonder if a price crash might occur by winter.

US inflation is dropping, layoffs are rising, and the effects of high mortgage rates are kicking in. If buyers don’t get the lower rates widely expected in 2025, and sellers have to sell due to refinancing challenges, the stage might be set for a price landslide. By mid-2025, it’s expected we’ll enjoy a drop in mortgage rates.

And buyers of course, would be delighted with such a scenario. Some sellers might lose a little on their windfall appreciation, which is likely holding back many from unloading their Florida home. New capital gains taxes on real estate could encourage some Florida second home owners to sell as well but scare off buying generally.

According to a report issued by the Treasury Department, the Democrat’s proposed fiscal year 2025 budget would see a 44% rise in the top marginal rate on long-term capital gains and qualified dividends. This would be frightening to many real estate investors in Florida, California, New York and Texas. This accumulation of bad tidings heading toward the election, could push the US real estate market into crash territory. However, odds are, we’ll avoid this trouble with a good election, lower interest rates, lower energy costs and inflation down toward 2%.

There’s lots of speculation and when you add inflation, home insurance (NAR reports it at $11,000 per year average + flood insurance), HOA insurance, FED tax growth, consumer debt, and property tax growth, you can see why speculators might stay away from the Florida market in 2024.

“Median property taxes for single-family homes in Florida have swelled about 35% over the last five years. Why it matters: The state’s property tax spike is 10 percentage points higher than the U.S. average” — from Axios Report.

Home Prices

Florida Realtor’s price chart show the average sales price rising 5%, which means 5% more funds flowing into Florida Real Estate. The median price rose only 1.6% to $426,581 yet given the glut of homes listed, this runs counter to normal market dynamics. And given the cost side risks, it’s apparent buyers are eager to buy wherever they’re financially able. The financing and affordability issue (mortgage rate, down payments) are likely important constraints not discussed.

Florida Real Estate Chart May 2024. — Florida Real Estate Chart. Screenshot courtesy of Florida Realtors.

There are millions of Americans eager to get out of the state/city they live in. Florida, Nevada, North Carolina, Tennessee and Texas are states they’d like to move to.

Single Family Home Prices in Florida May. Screenshot courtesy of Florida Realtors.

home prices top florida cities

Home Sales Report

Closed sales rose back to last June’s 26,000+ totals so homes are getting sold. It’s the summer season.

Closed home sales Florida May 2024. Screenshot courtesy of Florida Realtors.

House Inventory and Listings in Florida

Home inventory and listings are rising as noted in the graphics below.

Closed Sales Transactions Florida last 5 years. Screenshot courtesy of Florida Realtors.

Florida House Prices City By City

Overall across the State of Florida, house prices rose by 3.9% in May, year over year. Cities that saw the largest price gains were: Sebastian/Vero Beach (+10.1%), Miami/Fort Lauderdale (+9.6%), Port St Lucie (6.5%), Naples (8.0%), Jacksonville (5.2%), Tallahassee (+4.1%) and Tampa/St Petes (4.4%).

Greater Miami area accounts for almost 15% of home sales in the state, while condos sales are 37% of the state’s total. A look at the Miami housing market is warranted for those seeking lower prices as a glut has arisen. To note though, condo prices are still up by 7.3% in Miami. See more on Florida condos below.

Single Family home sales and prices city by city in Florida. Screenshot courtesy of Florida Realtors.

Florida Condo Prices

When buyers can’t possibly afford houses, which oddly are growing wildly in supply, they’ll turn to the condo market. If you’re a buyer there may be some cities that offer lower prices.

But buyer beware. Insurance rates and home renovation repair inflation may ruin your celebration. HOA and condo association rates and assessment too may cause some severe financial pain for the unwary.

Cities showing the biggest condo price declines include: Punta Gorda (-9.2%), Pensacola (-25.3%), Panama City (-8%), Hommosassa Springs (-5%), and Sarasota (-3.4%).

Here’s the city by city breakdown for condo sales and prices last month.

Condo prices and sales city by city in Florida. Screenshot courtesy of Florida Realtors.

Zillow Home Values: Florida

Zillow gives us a longer term view of the Florida housing market where we see the huge increase in price beginning in 2022. Higher FED rates did slow the economy and rush to Florida, however prices really didn’t retreat. With a coming lowering of rates in 2025, Florida’s market could boom once more.

Zillow Florida Home Report. Screenshot courtesy of Zillow.

Florida HomeBuyer Profile

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.

More Cities to Review

See more on the Tampa housing market, Fort Lauderdale, Miami housing market, Boca Raton housing market, Orlando, Fort Myers, Jacksonville, Panama City and other beautiful Florida locations.

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.

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.

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.