The Florida housing market experienced changes in inventory and median sales prices in July, according to the latest data from Florida Realtors®. Florida's housing market continues to be influenced by fluctuating mortgage rates. While there have been challenges, there are signs of improvement with increasing inventory levels and moderated price growth. As the year progresses, the housing market may continue to adjust to the changing landscape, offering more options for both buyers and sellers.
Florida Housing Market Report
The Florida housing market for July 2023. Higher mortgage rates are still a factor; the single-family home median price at $415K, 2.8 months’ supply. Condo median price at $319K, 3.6 months’ supply. In July, Florida’s housing market reported improving inventory levels (active listings) and statewide median sales prices consistent with values of a year ago, according to Florida Realtors®’ latest housing data.
The Impact of Mortgage Rates
2023 Florida Realtors® President G. Mike McGraw, a broker-associate with RE/MAX Central Realty in Orlando, stated, “Buyers and sellers in Florida continue to be challenged by higher mortgage rates, which have been fluctuating around 7%.”
McGraw emphasized that in recent months, they’ve seen active listings start to increase and inventory levels improving, though still below what would be considered a balanced market.
He added, “However, more active listings would mean a wider selection of homes and more options for buyers, which could help moderate the pace of rising prices and ease affordability issues.”
Last month, closed sales of existing single-family homes statewide totaled 22,198, down 6.4% year-over-year, while existing condo-townhouse sales totaled 8,463, down 9.4% from July 2022, according to data from Florida Realtors Research Department in partnership with local Realtor boards/associations. Closed sales may occur from 30- to 90-plus days after sales contracts are written.
Florida Realtors Chief Economist Dr. Brad O’Connor noted, “High mortgage rates this summer have continued to slow the annual rate of home price growth.”
He added, “The median sale price for single-family homes in July was $415,000, a 0.7% percent increase over last July’s median of about $412,000. This price growth is slightly greater than what we’ve seen in recent months, but not by much. The median sale price for condos and townhouses, meanwhile, was up 4.6% to $319,000, which was its largest year-over-year gain since April.”
The median is the midpoint; half the homes sold for more, half for less.
Looking at the overall housing data, O’Connor mentioned, “Interest rates were on the rise throughout 2022, and as they increased, housing market activity declined.”
“So, the deeper we get into 2023, the more favorable the numbers will look compared to 12 months ago. The real story so far this year is the housing market hasn’t been in any big hurry to improve,” he continued.
Supply and Demand
On the supply side of the market, single-family existing homes were at a 2.8-months’ supply in July while condo-townhouse properties were at a 3.6-months’ supply.
Florida Real Estate Forecast Next 5 years
Florida home values have risen by about 80% over the past 5 years and a positive trend is forecasted for the next 5 years. With the recent spike in mortgage payments as a result of rising interest rates, analysts are watching the Florida housing market closely to see what effect this will have. It is likely to restrict house price increases, but to what amount is unclear because there is still a “fear of losing out” attitude among purchasers, which is fueling the market, although slowly.
It's no surprise that Zillow ranked Tampa, Florida, as the top real estate market in the United States in 2022. Florida housing prices have witnessed some of the most dramatic increases in the country, with Miami and Tampa at the forefront of the upswing. Due to a variety of variables, the housing market in Tampa has outpaced many others, including a large number of potential buyers, a scarcity of supply, strong property sales, and an active employment market in the area.
Overall, the Florida housing market is strong and is predicted to remain so in the next five years. If you're a seller, this is wonderful news since it implies property values are rising and there isn't much selling competition, giving you the luxury of selecting from the best offers on your schedule. Higher mortgage rates may cause unprepared house buyers to postpone their purchases.
If this reduces buyer demand sufficiently in some Florida areas, price appreciation may decrease. The lower price increase may provide remaining buyers who can afford higher interest rates more confidence in locating a home they can afford. And that leads to fewer home sales. If you're selling a home in Florida this year, the odds are good that you'll come out ahead financially. Real estate prices and mortgage rates are rising, and the few affordable houses that remain are being snapped up like sardines. If you want to buy in this market, now’s not the time to buy.
Whether or not the country enters a recession, the housing market appears to be in good shape for the foreseeable future. Perhaps not at the same rate that the United States has lately seen, but growth nevertheless. This is an excellent moment for real estate investors, particularly those interested in Florida, to capitalize on market possibilities.
Florida Real Estate Appreciation Rates For 10 Years
Florida's real estate market has seen unprecedented price rises during the last few years, as a result of a lack of supply and high demand. Most of the emphasis is focused on the prices and the possibility of a housing bubble. While Florida's mild temperature, cheap taxes, and natural attractions have historically enticed newcomers to the state, if affordable housing challenges continue to prevail across the state, these enticing elements may go away.
A post-pandemic world necessitates that the state of Florida deal with the fact that pricey housing can in certain respects impede economic growth and have an unequal impact on critical segments of the population. Florida has had some of the strongest housing appreciation rates in the country over the past decade.
Real estate appreciation rates in Florida have shown significant growth over various time periods, making it an attractive market for investors and homeowners alike. Here's a breakdown of the appreciation rates based on data from NeighborhoodScout:
Latest Quarter (2022 Q4 – 2023 Q1)
During the latest quarter, spanning from the fourth quarter of 2022 to the first quarter of 2023, Florida's real estate market experienced a modest appreciation rate of 0.02%. While this figure may seem relatively low, it's essential to note that it outperformed the national average by 0.08%, indicating a resilient housing market in the face of economic fluctuations.
Last 12 Months (2022 Q1 – 2023 Q1)
Over the past year, from the first quarter of 2022 to the first quarter of 2023, Florida's real estate market saw a substantial appreciation rate of 13.07%. This robust growth mirrored the average annual rate, once again highlighting the state's resilience and attractiveness to investors, with a remarkable performance ranking of 10 compared to the rest of the country.
Last 2 Years (2021 Q1 – 2023 Q1)
Examining a slightly longer timeframe, from the first quarter of 2021 to the first quarter of 2023, the appreciation rate in Florida stood at an impressive 44.36%. This growth far exceeded the national average, by 20.15%, reinforcing Florida's reputation as a thriving real estate market.
Last 5 Years (2018 Q1 – 2023 Q1)
Over the past five years, from the first quarter of 2018 to the first quarter of 2023, Florida's real estate market exhibited substantial appreciation, boasting a rate of 77.01%. This rate exceeded the national average by 12.10%, signifying Florida's consistent and strong real estate performance.
Last 10 Years (2013 Q1 – 2023 Q1)
When considering the last decade, from the first quarter of 2013 to the first quarter of 2023, Florida's real estate market recorded remarkable appreciation of 174.83%. This growth, which surpassed the national average by 10.64%, demonstrates the state's enduring appeal to real estate investors.
Since 2000 (2000 Q1 – 2023 Q1)
Finally, when looking at the broader picture from the first quarter of 2000 to the first quarter of 2023, Florida's real estate market experienced exceptional appreciation, amounting to 281.81%. Even over this extended period, Florida outperformed the national average by 6.00%, reaffirming its status as a top choice for real estate investment over the years.
These appreciation rates indicate the dynamic and resilient nature of Florida's real estate market, making it an attractive destination for those looking to invest in property.
Within Florida, Tampa Bay has one of the most overpriced housing markets in the nation, according to new research from Florida Atlantic University. Extremely low mortgage rates drove our red-hot housing market, particularly during the epidemic, and intensified bidding wars. Lakeland ranks 12th nationally, and second in the state, with homes overvalued by more than 53.2%. North Port-Sarasota-Bradenton is No. 17 nationally, fourth in the state at 48.9%.
Florida Housing Market Forecast 2023-2024
The Florida housing market is in a state of constant evolution, influenced by various factors, including economic trends and population growth. According to recent data from Zillow, here's an overview of the current state of the Florida housing market as of July 31, 2023:
Current Market Snapshot
The average home value in Florida currently stands at $390,052, reflecting a modest increase of 0.7% over the past year. Homes in Florida are also selling relatively quickly, with a median time to pending of 20 days, indicating a strong demand for real estate in the state.
Furthermore, the market showcases a competitive environment, with a median sale-to-list ratio of 0.982, suggesting that homes are often selling close to their listed prices. Additionally, a significant 17.5% of sales are occurring over the list price, while 63.5% of sales are under the list price, reflecting the varying dynamics of the market.
Market Forecast by July 2024
Looking ahead, the Florida housing market is poised for further growth in the coming year. Zillow data indicates that several Metropolitan Statistical Areas (MSAs) in Florida are expected to experience substantial home price growth by July 2024. Here are the top 20 MSAs and their projected home price growth rates:
- Clewiston, FL MSA: Expected to see a remarkable growth rate of 9.7%.
- Wauchula, FL MSA: Anticipating a growth rate of 9.6%.
- Palatka, FL MSA: Projected to experience growth of 9.1%.
- Key West, FL MSA: Predicted to see a growth rate of 8.5%.
- Miami, FL MSA: Expected to have a growth rate of 8.4%.
- Sebring, FL MSA: Anticipating a growth rate of 8.2%.
- Lake City, FL MSA: Projected to experience growth of 8.2%.
- Ocala, FL MSA: Predicted to see a growth rate of 8.1%.
- Naples, FL MSA: Expected to have a growth rate of 7.9%.
- Arcadia, FL MSA: Anticipating a growth rate of 7.9%.
- Tampa, FL MSA: Projected to experience growth of 7.8%.
- Pensacola, FL MSA: Predicted to see a growth rate of 7.8%.
- Crestview, FL MSA: Expected to have a growth rate of 7.8%.
- Homosassa Springs, FL MSA: Anticipating a growth rate of 7.7%.
- Okeechobee, FL MSA: Projected to experience growth of 7.5%.
- Port St. Lucie, FL MSA: Predicted to see a growth rate of 7.3%.
- Panama City, FL MSA: Expected to have a growth rate of 7.3%.
- Sebastian, FL MSA: Anticipating a growth rate of 7.3%.
- Punta Gorda, FL MSA: Projected to experience growth of 7.1%.
- Lakeland, FL MSA: Predicted to see a growth rate of 6.9%.
This forecast suggests that many regions across Florida are expected to continue experiencing robust growth in home prices, making it an enticing market for both buyers and sellers in the near future.
Florida Housing Market Annual Report (Year-End)
Here's Florida's statewide housing market data for single-family homes as reported by Florida Realtors for the previous year.
Florida Single-Family Home Sales
- The number of sales transactions closed in 2022 was 287,352, -18% year-over-year.
- The number of Closed Sales in 2022 in which buyers exclusively paid in cash was 92,051, -12% year-over-year.
- The percentage of Closed Sales which were Cash Sales was 32.0%, +7% year-over-year.
- Cash Sales can be a valuable measure of the level of market participation by investors.
- Investors are far more likely to have the cash on hand to purchase a house, whereas the average homeowner requires a mortgage or other type of financing.
- Florida home sales dropped in most price segments in 2022.
- The highest closed sales were reported in the market segment of $400,000 – $599,999 (81,155 sales).
- It was followed by the $300,000 – $399,999 segment which reported 43,683 sales.
- These two were the only market segments that reported year-over-year gains in home sales.
Florida Single-Family Home Prices
- The median sale price reported for the year (i.e. 50% of sales were above and 50% of sales were below) was $402,500, +15.7% YoY.
- The average sale price reported for the month (i.e. total sales in dollars divided by the number of sales) was $562,442, +11.3%.
- The sum of the sale prices for all sales which closed during the month was $161.6 Billion, -8.7% YoY.
- It is a powerful predictor of the strength of the real estate business in a market, and real estate professionals, investors, and analysts are especially interested in it.
- The Median Percent of the Original List Price Received was 100.0% in 2022, the same as in 2021.
Days on Market
- The median number of days between the listing date and contract date for all Closed Sales during the month was 14 days, 2 days more than the previous year.
- The median number of days between the listing date and closing date for all Closed Sales during the month was 56 Days, 1 day more than the previous year.
New Pending Sales
- The number of listed properties that went under contract in 2022 was 290,375, -21.1% YoY.
- Pending Sales are considered to be a decent indicator of potential future Closed Sales.
Florida Housing Supply
- The number of New Listings put onto the market during the year was 366,296, -3.0% YoY.
- The number of property listings active at the end of the year was 65,786, +116.8% YoY.
- Months Supply of Inventory in the Florida Housing Market was 2.7 months, +170% YoY.
- MSI is a useful indicator of market conditions.
- The benchmark for a balanced market (favoring neither buyer nor seller) is 5.5 months of inventory.
- Anything higher is traditionally a buyers' market and anything lower is a sellers' market.
Will the Housing Market Crash in Florida?
Population growth, and particularly growth in the number of households, lead to a growth in housing demand. Real estate is subject to the law of supply and demand: when there are more purchasers than available homes, prices rise. Since the 1940s, Florida's population has increased year after year, often outperforming the national average. However, like the rest of the United States, growth plummeted to historic lows during the initial years of the pandemic until rebounding last year.
Florida is now America's fastest-growing state. According to recent census data, the Sunshine State added over 400,000 additional people between July 2021 to July 2022. It was a growth of 1.9%, bringing the total population to 22,244,823. That makes it faster-growing than Texas, which has the second-largest population in the United States, trailing only California.
According to experts, the national housing market or the market in Florida is nowhere near the crash that occurred during the Great Recession of 2008. This is partially due to tighter lending laws coming from the financial crisis. Borrowers are in considerably better shape, as seen by their improved credit scores. And as a result of rising home values, homeowners have a record amount of equity.
The current situation is a fairly complex web, but it's nothing compared to the 2008-2009 market crisis, which took years to unravel. The Fed's pandemic actions fueled a housing boom. As it tries to withdraw that support, it could be bad news for housing but will it lead to a crash? The Fed will continue to play a crucial role in the future of the housing market.
Back in February 2020, the Fed owned $1.4 trillion in mortgage-backed securities, and the number was falling rapidly. As the pandemic took root, however, the central bank initiated a new round of bond purchases (known as “quantitative easing”), bringing the number to $2.7 trillion.
Fed seeks to tighten monetary policy to combat inflation Although it wants to shrink that portfolio it is quite improbable that the Fed can unwind its balance sheet. It might simply accept the fact that it will continue to play a disproportionate role in the housing market and have a larger balance sheet than it would prefer. Prepare for a collapse, not a correction, in the housing market during the next 18 to 24 months if they do.
According to the financial services business Moody's Analytics, a majority of Florida's metropolitan regions are overpriced by more than 20 percent based on these parameters, which apply to two dozen metropolitan areas. Here are the states with the most inflated housing markets as of the first quarter of this year. Unsurprisingly, coastal regions top the list. At 57 percent overpriced, the Homosassa Springs Metropolitan Service Area (MSA), which encompasses Citrus County, took the top rank. It was also the fourth-best ranking in the nation.
Florida’s Top 10 “Most Overpriced” Housing Markets (By Moody’s Analytics)
- Homosassa Springs MSA (57%)
- Palm Bay-Melbourne-Titusville MSA (48%)
- Punta Gorda MSA (45%)
- Vero Beach-Sebastian MSA (42%)
- Port St. Lucie MSA (40%)
- Crestview-Fort Walton Beach-Destin MSA (40%)
- Cape Coral-Fort Myers MSA (39%)
- Miami-Miami Beach-Kendall Metropolitan Division (39%)
- Naples-Immokalee-Marco Island MSA (38%)
- North Port-Sarasota-Bradenton MSA (38%)
These price increases are problematic for Floridians for a variety of reasons. Although industry experts expect that the market will eventually recover, as it always does, these increased property prices may persist for some time. But when it decelerates, homeowners will not profit as much.
“Florida homeowners are much wealthier due to the rise in property values across much of the state, but not as affluent as they may believe,” Zandi said. It will be more difficult for homeowners to move up to a more costly property or use their home's equity to fund their expenditures. In addition, many middle-to-low-income people and first-time homebuyers are priced out of the market, according to Zandi, since they cannot afford not only the high sale prices but also the increasing mortgage rates and homeowners insurance.
10 Florida Markets Are Overvalued, According To A Rental Trends Study
According to new research on rental market trends, the Florida rental housing market is among the most overpriced in the country and has among the fastest-rising prices. The moratorium's expiry, along with the high demand for rentals, particularly in Florida, pushed rental costs skyrocketing. Landlords will continue to hike rents until additional rental units are developed, pricing off many middle-class customers who previously rented because they couldn't afford to purchase.
The research of 107 U.S. rental areas, published on June 6 and based on April data, discovered that ten of the country's most overpriced rental markets are in Florida. All ten Florida markets covered in the analysis are overpriced by more than 13 percent. The Miami market, which encompasses Miami-Dade, Broward, and Palm Beach counties, was identified as having the highest “premium” paid by renters.
The investigation revealed that it was 22.07 percent overpriced. The average monthly rent in South Florida increased to $2,846, despite historical data indicating that the average should be just $2,331. In the Fort Myers region, rental expenses increased the most year-over-year. The average rent is now $2,073, an increase of 32.38 percent from one year ago. The rental prices in the nine other Florida markets included in the research increased by more than 20 percent annually, and they all ranked in the top 15 out of 107 areas for this criteria.
“A lot of our Florida markets are way overpriced compared to the rest of the country,” said Ken H. Johnson, a real estate economist at the Florida Atlantic University College of Business, who is a co-author of the study.
Florida Housing Market Predictions 2023
Florida has one of the nation's hottest housing markets. Home sales usually are directly tied to an economy's health and rise and fall with economic activity. As economies slow, the supply of money tends to become more restrictive. As money becomes harder to borrow, fewer home buyers enter the housing market.
With year-round sunlight (giving it the nickname “The Sunshine State”) and world-class amusement parks, Florida is a popular worldwide tourist destination. The economy is active and varied, with dozens of international corporate headquarters. Eighteen companies with headquarters located in Florida earned a place on Fortune magazine’s 2020 list ranking enterprises with the 500 highest fiscal-year revenues in the nation.
Florida’s Economy Continues to Thrive
Florida's economy remains robust, with positive indicators reflecting a strong labor market and steady job growth. In May 2023, the state's seasonally adjusted unemployment rate held steady at 2.6 percent, unchanged from April 2023. Compared to the previous year, the unemployment rate has decreased by 0.3 percentage points, showcasing a favorable trend. Out of a labor force of 10,998,000 individuals, there were 287,000 jobless Floridians.
Nationally, the unemployment rate stood at 3.7 percent in May, indicating that Florida's job market is performing better than the average across the United States. These figures demonstrate the state's ability to maintain a healthy employment rate, providing opportunities for its residents.
Moreover, Florida's total nonagricultural employment reached 9,726,100 jobs in May 2023, experiencing a monthly increase of 17,500 jobs or 0.2 percent. Over the course of the year, the state witnessed significant job growth, with an impressive gain of 346,600 jobs, reflecting a growth rate of 3.7 percent. Comparatively, the national job growth rate over the same period was 2.7 percent, highlighting Florida's strong performance in job creation.
Examining the local area unemployment statistics, Monroe County recorded the lowest unemployment rate in the state at 1.7 percent, followed closely by Miami-Dade County at 2.2 percent. Okaloosa County and Gulf County tied with a 2.3 percent unemployment rate, indicating a favorable job market in these regions.
On the other end of the spectrum, Hendry County reported the highest unemployment rate in Florida at 4.1 percent. It was closely followed by Highlands County at 4.0 percent, Citrus County at 3.9 percent, and Hamilton County, Putnam County, and Sumter County, each with a 3.7 percent unemployment rate. These regions may require additional attention and support to bolster employment opportunities for their residents.
Overall, Florida's economy continues to thrive, characterized by a low unemployment rate and consistent job growth. The state's strong labor market positions it favorably, outperforming the national average in terms of employment opportunities. As Florida maintains its upward trajectory, it is anticipated to provide a favorable environment for businesses, workers, and job seekers alike.
Florida is a Hot Spot for Real Estate Investment for a Few Reasons
Florida's strong population growth, diverse job market, tourist attractions, affordable property prices, tax benefits, and diversified economy all contribute to making it a hot spot for real estate investment.
1. Strong population growth and job market: Florida has strong population growth, particularly in cities like Miami, Orlando, and Tampa. This leads to an increased demand for housing, making it a prime location for real estate investment. Additionally, Florida's job market is diverse and growing, which attracts new residents and supports the demand for housing.
2. Tourist Attraction: Florida is a booming real estate market due to tourism. Florida attracts millions of tourists annually. In tourist-heavy areas like Miami, Orlando, and others, vacation rental properties are in high demand. Vacation rentals offer greater space, privacy, and facilities than hotels for Florida tourists. Investors can earn rental income and gain property value via vacation rentals.
Vacation rental properties are more reliable and profitable than typical rental properties due to high demand. Tourists pay extra for comfortable vacation rentals. Tourist demand can remain consistent throughout economic downturns, making vacation rental properties more market-resilient. Florida's great tourist draw can offer real estate investors looking for vacation rental properties a reliable and successful revenue stream and property value appreciation.
3. Affordable property prices: Compared to other states like California, property prices in Florida are relatively affordable, which can make it an attractive option for real estate investors. This can lead to strong returns on investment and can make it easier for investors to purchase multiple properties. It's important to note that property prices can vary widely depending on location and property type. While some areas of Florida may have lower property prices, other areas, such as beachfront or tourist-friendly areas, may have higher property prices.
4. Tax Benefits: Florida has no state income tax, which can be a significant advantage for real estate investors. This can lead to higher net returns on investment and can make it a more attractive option for real estate investors.
5. Diversified economy: Florida's economy is diverse, with a mix of industries such as agriculture, tourism, aerospace, and technology. This diversified economy can help insulate the state from economic downturns, which can be beneficial for real estate investors.
However, it's always important to do proper research, understand the market and the property before investing, and have a solid plan in place for managing risks.