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Florida Real Estate Forecast Part 2
Contrast Florida home prices with those in California or New York, and combine this with the favorable tax situation here, and Florida might be the right opportunity for buyers who otherwise couldn’t make it happen.
The plight of the tourism sector will at least keep the Florida real estate market from price inflation. Will snowbirds be back next Winter? That would all depend on health insurance coverage since the risk for older people is heightened.
A vaccine would change the situation entirely, and if a vaccine was delivered by next February it would spark the housing market quickly even though tourists haven’t come back.
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.
Zillow Florida Price Forecasts
Zillow gives Florida a good rating but they feel prices will decline further as the fallout from the shutdown continues. They predict home prices will rise only slightly to $248,000 in March 2021.
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.
Owners and Investors will be pleased by the growth curve in average rents in Florida.
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:
- St. Cloud
- Fruitland Park
- Palm Springs
- Winter Garden
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:
- can you afford to live in the region or neighborhoods you have targeted?
- which cities and neighborhoods are safe and pleasant to live in?
- summers are hot and humid. Can you take the heat and the indoor life?
- do you like golf, fishing, walking the beach, boating, and water sports?
- how well can you run your business from Florida and how much back and forth travel will you need to do?
- what is the actual cost of living?
- how much will your mortgage payments be for the next 10 years?
- 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:
- 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
- income tax cuts for almost everyone means people will have more money to buy real estate and pay mortgages
- 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.
Digital Marketing Services for Florida Realtors and tourism companies. Gord Collins is an SEO expert serving clients in San Diego, Toronto, Vancouver, Los Angeles, San Francisco, Boston, New York and many more locales.
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