Florida Real Estate Market

Buyers and sellers are likely feeling a little more optimism about the housing market in February.

Inflation seems to be easing, jobs numbers are strong, interest rates may be topping out and GDP numbers came in okay for the 4th quarter.

That of course translates well for the state of Florida. With the rise in food prices and a solid flow of tourists to the Sunshine state, the Florida economy might thrive in 2023. And this all support for the housing market over the next 5 years. In fact, as spring approaches, the scenario is pointing to stronger prices and more sales in Florida.

Any calls for a Florida housing downturn might be fading, as they are for other US real estate markets.

December’s housing report stats showed an uptick in sales activity. Sales of houses grew by about 2100 units, while sales of condos grew by about 600 units. Median house prices are only up 5.6% from last years $373,990 to $395,000 in December. Condos and townhouse price rose 8.8% year over year to $310,000.

Redfin’s reflect similar trends as Florida Realtors. Here’s Redfin’s surprising stat on the cities with the highest price growth. Investors hoping for the best cap rates may find these cities most interesting.

At a time when the economy isn’t roaring and buyers are prevented from buying due to high mortgage rates, the prices are elevated. If inflation is tamed and rates taper off, we could the market open up. Of course, that will push home prices back up given the severe shortage and no real promises of new supply.

Housing permits reported by the NAHB are down of late.  January’s builder sentiment reading was up 4% in January and with this month’s good news, it’s likely to climb further. That will be good news for buyers and Realtors in Florida.

Florida Realtor’s Chief Economist Dr. Brad O’Connor in this video, gives the latest overview of the Florida housing market, heading into 2023:

December Housing Market Performance

In December, home sales grew along with prices vs November reflecting some upward momentum. Until this month, those trends didn’t mean much.

Time to contract, inventory, and days on market all rocketed, while cash purchases, new listings, and sales volumes all plummeted. Total sales volume really reflects the air being let out of the market this winter.  Months of supply has rocketed year over year from 1 to 2.7 in December back to levels not seen since June of 2020.

Compare Florida house prices in Los Angeles, New York, Los Angeles, Dallas, Denver, Atlanta, Vancouver or Toronto, Florida real estate remains a bargain with a strong demand profile for the next 5 years at least.

Home Prices in Florida

Prices of homes rose very slightly at about 1% over Novembers, thus levelling off to the prices of the fall of 2021.  Without a housing crash or recession, buyers will looking at higher home prices in the spring and summer. Is right now the best time to be using a Realtor to negotiate something better.

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.

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.

New Home Listings

New home listings in December dropped by about 2600 houses a drop of 17.7% year over year, and down approx 11% from November. That’s about half of listings in the peak period of 2022.

Active Inventory of Homes for Sale in December

The inventory of active listings dropped by almost 4,000 units in December but are still up 116% from 12 months ago. For buyers with the ability to buy, it’s the best its been since before the pandemic. Still these volumes are low.  With 65,786 units listed, buyers at least have a shot at making a bid. With prices rising, more sellers might look to list their homes.

However, most of the inventory is luxury priced homes with the majority listed at prices above $300,000. The listing prices of newly listed homes below $300,000 dropped 40% to 50% year over year.  Any home priced at $600k and above actually were listed above last year’s prices.

Cities such as Miami and Tampa were very popular.  The hurricane had an effect, as many homes in the Charlotte/Fort Myers region suffered extensive damage. Those residents will rebuild, thus drawing construction investment into the area. This may bode well for housing development going forward in the southern Gulf coast region.

Fewer Florida houses are being sold in the lower price range, yet more sales are happening in the higher price ranges, particularly between $300k and $900k.

New pending sales of houses are down 31.5% year over year.

Florida home sales and prices by city/region in December

Condo Stats for December 2022

Orlando, Kissimmee, Fort Walton/Destin, Jacksonville, and Naples were the hottest areas for year over year price growth.

Florida real estate is still one of the most desirable locations to live, regardless of politics and the economy. 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, Washington and northeastern cities are where many buyers come from.

The Allure of Florida Strong Despite Prices

Price is a good barometer of buyer preference and intent.

Florida’s gorgeous climate is a huge draw for most buyers of home here. While Florida was considered a dead end back 30 years ago 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 Los Angeles, New York, Atlanta, Dallas, Denver, San Francisco, Boston, Philadelphia and Chicago

Florida has one of the hottest US housing market forecasts for 2022 and beyond. Buyers from New York, Boston, Philadelphia, Chicago, Atlanta, and Toronto are eager to own a home in Tampa or Miami and other beautiful FL cities.

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.  The price of lumber, land, and steel along with labor shortages are going to impinge on the Florida state housing market as well.

Still, sellers should not sell their house fast, and rather sell strategically for a better price. Realtors check real estate marketing services to help you generate more leads.

Florida Realtors believed rising interest rates would moderate demand and prices, and those rates did reduce prices eventually yet the real issue with Florida real estate is sellers who won’t list their properties. The Fed had promised continuous low rates and said inflation is not an issue. That has all changed and they are reversing their previous intent.  There is pent up demand, low construction numbers and rising savings and wages to lay down on a Florida home.  Any drop in price or mortgage rates tends to stir up buyers quickly and I’m predicting 2023’s home prices in Florida will rise.

As we’ve seen from the stats, even when prices rise considerably, it doesn’t seem to encourage sellers put their homes up for sale. The conclusion is that sellers don’t want to sell or move from their paradise.  Even those in Fort Myers region who can afford to rebuild are rebuilding.  Retirees are there to retire for the rest of their lives.

That is just one more unique element of the housing market here. The in-migration of people from Latin America will surely create more demand especially for rentals and low prices condos.  This will draw in rental investors due to the outstanding ROI.  Florida has enjoyed a lot of new construction, and builders are optimistic, but is it enough to get them back on pace to satisfy demand?  Likely not.  Demand is simply too high.

The trend then is the interest in North Carolina, Tennessee and northern Arkansas which are seeing an influx of new residents. The cost of living and slower, safer lifestyle is a strong draw too.

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:

• 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 continue among the stubbornly unvaccinated
• 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 in the Sunshine state
• coming boom of recreation and travel
• pent up consumer demand returns in a wave
• 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

See more on the Miami real estate market and Tampa real estate market.

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? The Florida economy is strong and travel and leisure is making a comeback now as the pandemic has passed.  With a harsh winter head in 2022/2023, Florida should remain the country’s destination of choice for winter getaways, and with more senior snowbirds, I’m forecasting a good winter.

There are still challenges for homebuyers looking for affordable buying opportunities in 2023’s housing market.  A homebuyers tax credit, recovering economy and low mortgage rates should help.

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.

See more forecasts on the real estate housing market, and the latest home prices and sales trends for numerous major metros in California including San Diego, Los Angeles, San Francisco, and Sacramento.  See stats on other cities, including Denver, Dallas, New York, Boston, Atlanta and in the Florida housing market in Miami and Tampa.

Rising mortgage rates, inflation, reduced housing supply and high home prices threaten the markets, it appears 2022’s real estate scene will stay strong. Realtors may want to build their presence this year as house prices decline in 2023. Lower prices will bring plenty of homes onto the market and boost your opportunities.

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