Florida Housing Forecast 2020 | Real Estate Update Miami Orlando Tampa

Florida Housing Forecast 2020 | Real Estate Update Miami Orlando Tampa

Florida Real Estate Market 2019

The Florida real estate market is seeing growing sales, prices and transaction volume. Active inventory is up however new listings of homes and condos were down. Are very low prices and constrained supply a buy signal?

Given the US economic outlook, when Americans are wealthy they look to buy in Florida. The economy is diversifying and there is only so much good real estate here. That has many believing buying in Florida may be a wise long term real estate investment choice.

Home sales jumped by 9068 over Q1.  Condo sales rocketed up by 25,500 units in Q2, although they dropped by 2,000 in June vs May. Total dollar volume of condos fell 2% while the total sales value of detached homes rose 5%.

85,017 single-family homes sold across FL which was up 4.6% from Q2 of 2018.  34,128 townhouses and condos were sold, down 1.4% from last year. Average condo prices rose about $2500 to $353,621. Average detached house prices dropped .6% to $277,785.

New house listings across Florida dropped by 2.2% to 96,984 units, and condos/townhouse listings dropped 4.5% to 39,618 units.

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. The report says the Sunshine State’s GDP will expand 3.1% through 2020 and job growth be 1.9% in 2020 and 1.4% in 2021, which is much higher than for the national economy.

Screen capture 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 outook 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 babyboomers 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? Where is the best place to buy in Florida?  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.

Florida Home Sales Report – Screenshot courtesy of Florida Realtors.

Zillow Forecasts

Zillow predicts home prices will rise 2% by July 2020 to $251,000, and state that prices grew by 4.3%.

They give a hot rating for Florida’s real estate market health. Homes with negative equity has dropped to 7% of owners. The state has a higher than average mortgage delinquency rate of 1.4% which is higher than the national average.

Florida home price predictions. Screen shot courtesy of Zillow

Zillow says bottom tier prices are $141,000, middle tier at $246,000, while top tier come in at $412,000. Naples has the high home prices at $329,100, followed by Miami at $300,500. Tampa homes are a very reasonable $184,200, 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.

Florida rent prices. Screencapture courtesy of Zillow

Average home prices in Florida. Screenshot courtesy of Florida Realtors

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 During Summer 2018

Here’s what happened last summer. 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 prices jump 10% while sales grew 8%. Sadly inventory dropped by 11% YoY. The median price for single-family homes sold in Orlando in April rose 9.4% YoY to $257,000. The median price for Orlando condos increased 20.4% to $130,000, substantially more than condos in Miami. 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 Sarasota Housing Market is hot. It ranks 6th in loan applications from those ready to move. According to Zillow, the median home value in Tampa is $209,200. Property prices have risen 14.7%  YoY.  Zillow predicts they’ll rise 9.7% within the next 12 months.

The median price of Tampa homes is $299,900 while the median price of homes that sold is $238,400.  The issue is the price mismatch between prospective buyers and those wishing to sell.

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.

Florida State Sales by City or Statistical Region

Florida cities housing report. Screenshot courtesy of Florida Realtors

Should You Buy 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 pickingup, 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 situaton 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

The variety of homes in Florida is astonishing.  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.

With more babyboomers hoping to retire somewhere nice, and who have been holding onto their old home because they have nowhere to go, they will find Florida a solid asset as a home or real estate investment.

The 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 (From US and soon Canadian buyers as the CAD falls), 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

Florida’s economic performance continues in 2019 will shine as will the US economy. This is why the sunshine state is  attracting so many new residents and home buyers. Orlando’s population grew 18% and disposable income growth over the last 5 years was an amazing 12.8%. A look at the Florida GDP below, can see more growth is forecasted.

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 affects 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 2018

Florida Home Prices and Predictions

City Zillow Home Price
Zillow Price End of 2019
Miami $295,400 351,000
Hialeah $200,700 303,000
Fort Myers $193,100 211,000
Saint Petersburg $163,500 231,000
Tampa $163,000 235,000
Tallahassee $161,600 187,000
Orlando $155,400 248,000
Jacksonville $140,300 190,000
Pensacola $121,000 144,000
Fort Lauderdale $293,200 292000
Boca Raton $328,500 346,000
Naples $330,800 333,000
Sarasota $273,200 279,000
Miami Beach $381,100 397,000
Kissimmee $174,600 231,000
Port St Lucie $204,000 229,000
Cape Coral 220200 230,000
Pembroke Pines 288900 325,000
Clearwater 213800 221,000

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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