Florida Housing Report 2018 and Beyond
The housing markets from Miami to Jacksonville to Panama City to Tampa and Orlando are promising. Florida Realtors reports rising prices and more listings. It’s not a buyer’s market but it’s better.
Forida Housing Stats for 1st Quarter 2018
Average Prices in Florida continue their relentless rise even as sales have dropped. It’ seems unlikely that buyers can hold out for lower prices particularly in south Florida.
Median time to contract is down 10% which reflect fewers all cash buyers and longer closing times due to mortgage financing. New pending sales are 1% less than 1st quarter 2017.
The situation for condos is better. Closes sales of condos and townhomes rose 2.8% and average selling prices rose 10.4% which approaches levels seen in the 2017 boom.
Should You Buy in the Next 5 Years?
The doomsday people are always calling for housing crashes and stock market crashes. We will see higher oil and gasoline prices and housing should continue upward for 5 years.
The housing market in Miami, Tampa, Orlando, Panama City, Sarasota, Naples, Fort Launderdale, and even Boca Raton are compelling real estate investment value propositions for snowbirds and other buyers in North America. As you’ll see, sunny and warm Florida home prices are quite reasonable.
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.
Florida Housing Market History
The Florida housing market in 2017 was 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. If the glut of condo building in Miami is now complete, then we may see upward pressure on condo prices.
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:
- 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
Florida’s economic performance was outstanding again in 2017 which is why it was attracting so many new residents and home buyers. Orlando’s population growth was 18% over the last and disposable income growth over the last 5 years was an amazing 12.8%.
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 and slightly rising interest rates.
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 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 should find Florida an ideal place to come home to.
Florida Home Prices
According to Zillow, home prices in Florida average $216,000 which is up 7.3% from last year. They’re expected to rise more slowly in 2018 at 2.5%. By the end of 2018, the average home price will be $221,000. 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.
Florida Home Prices and Predictions
|City||Zillow Home Price||
Zillow Price End of 2018
|Port St Lucie||$204,000||211000|
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