In the wake of the coronavirus outbreak, out-of-state residents have flocked to the Sunshine State in quest of larger homes, more outdoor activities, and a higher quality of life. Population growth has resulted in a red-hot Florida residential real estate market as purchasers compete for residences with strong demand and limited availability. As a result, some Floridians are being outbid or priced completely out of the state. According to data from Florida Realtors, the statewide median sale price for single-family homes in April was $420,000, up 21.8% from the prior year.
Some regions are witnessing even more significant rises. Even though real estate specialists had expected that the market in 2022 will be comparable to last year's, these price rises in the Florida Housing Market may have the opposite effect. When house prices are as high as they are now, increases in mortgage rates and homeowners insurance might have a major impact on a homeowner's monthly payment and drive affordability out of reach.
U.S. News & World Report announced its rankings of the most and least affordable states for housing and total cost of living. When producing statistics on Florida's housing affordability, experts compare median house prices to median family incomes and mortgage interest rates. Florida is ranked #31 in affordability, indicating that it has one of the least affordable housing markets among the fifty states.
Florida Real Estate Forecast Next 5 years
Florida home values have risen by 81% over the past 5 years and the same trend is projected 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 has ranked Tampa, Florida, as the top real estate market in the United States in 2022. Overall, 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 has had some of the strongest housing appreciation rates in the country over the past decade. Over the past decade, Florida's real estate has risen 134.94 percent, which equates to an annual home appreciation rate of 8.92 percent, according to the data collected by NeighborhoodScout. If you are a house buyer or real estate investor, Florida has been one of the finest long-term real estate investments in the United States over the past decade.
Florida’s housing market mirrors larger national trends, albeit with some regional variation. An imbalance between demand and supply has fueled rapid home appreciation across the state. The real estate appreciation rate in the Sunshine State in the last two years has been 33.64%. Considering only the most recent twelve months, Florida appreciation rates continue to be among the highest in the United States, at 24.47% percent. The most recent quarter's appreciation rates in FL were 5.54 percent, which amounts to an annual appreciation rate of 24.09 percent.
As of June 30, 2022, the typical value of homes in Florida is $397,280 (Zillow Home Value Index). This value is seasonally adjusted and only includes the middle price tier of homes. Florida home values have grown by 34.3% over the last twelve months and 54.5% over the last twenty-four months (2 years).
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 2022 Trends
According to Redfin, the Florida home prices (statewide) were up 23.7% year-over-year in May. At the same time, the number of homes sold fell 9.16% and the number of homes for sale fell 8.7%.
Top 5 Metros in Florida with the Fastest Growing Sales Price
Panama City, Florida: In May 2022, Panama City home prices were up 19.6% compared to last year, selling for a median price of $250K. On average, homes in Panama City sell after 36 days on the market compared to 112 days last year. There were 71 homes sold in May this year, down from 79 last year.
West Palm Beach, Florida: In May 2022, West Palm Beach home prices were up 35.7% compared to last year, selling for a median price of $387K. On average, homes in West Palm Beach sell after 35 days on the market compared to 49 days last year. There were 450 homes sold in May this year, down from 534 last year.
Plantation, Florida: In May 2022, Plantation home prices were up 30.5% compared to last year, selling for a median price of $509K. On average, homes in Plantation sell after 36 days on the market compared to 43 days last year. There were 125 homes sold in May this year, down from 159 last year.
Wimauma, Florida: In May 2022, Wimauma home prices were up 26.2% compared to last year, selling for a median price of $403K. On average, homes in Wimauma sell after 8 days on the market compared to 6 days last year. There were 56 homes sold in May this year, up from 41 last year.
Boynton Beach, Florida: In May 2022, Boynton Beach home prices were up 26.2% compared to last year, selling for a median price of $410K. On average, homes in Boynton Beach sell after 33 days on the market compared to 43 days last year. There were 317 homes sold in May this year, down from 423 last year.
Florida Housing Market Statistics (May 2022)
Here's Florida's statewide housing market data for single-family homes as reported by Florida Realtors for May 2022.
- The number of sales transactions that closed during the month was 28,861, -6.9% Year-over-Year.
- The number of Closed Sales during the month in which buyers exclusively paid in cash was 9,837, +4.9% year-over-year.
- The percentage of Closed Sales during the month which were Cash Sales was 34.1%, +12.5% 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.
- The median sale price reported for the month (i.e. 50% of sales were above and 50% of sales were below) was $420,000, +21.8% YoY.
- The average sale price reported for the month (i.e. total sales in dollars divided by the number of sales) was $602,558, +15.6%.
- The sum of the sale prices for all sales which closed during the month was $17.4 Billion, +7.7% 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% in May 2022.
- The median number of days between the listing date and contract date for all Closed Sales during the month was 9 days, the same as last year.
- The median number of days between the listing date and closing date for all Closed Sales during the month was 48 Days, -9.4% YoY.
- The number of listed properties that went under contract during the month was 28,403, -13.1% YoY.
- Pending Sales are considered to be a decent indicator of potential future Closed Sales.
- The number of properties put onto the market during the month was 37,804, +10.2% YoY.
- The number of property listings active at the end of the month was 40,013, +31.5% YoY.
- Months Supply of Inventory in the Florida Housing Market was 1.4 months, +27.3% 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.
The highest closed sales were reported in the market segment of $400,000 – $599,999 (8,416 sales). It was followed by the $300,000 – $399,999 segment which reported 7,166 sales.
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 as a result of 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.
The average 30-year interest rate increased to 5.25 percent from 3 percent a year ago, according to a May 19 report by mortgage buyer Freddie Mac. In addition, property insurance prices are anticipated to climb by 30 to 40 percent this year due to the failure of the legislature to adopt various laws meant to curb statewide premium inflation.
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 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 fourteen most overpriced rental markets in the country 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 2022
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 private sector over-the-year job growth rate has exceeded the nation's for 12 consecutive months since April 2021. Private-sector industries gaining the most jobs over the month were: Professional and Business Services with 9,400 new jobs. Manufacturing with 4,500 new jobs.
Florida’s Economy Continues to Thrive
- The unemployment rate is 3.2 percent, down 0.1 percentage points from the previous month’s rate and 0.4 percentage points lower than the national rate.
- Florida’s statewide unemployment rate has been lower than the national rate for 16 consecutive months, since December 2020.
- Florida’s statewide unemployment rate has declined or held steady for 20 consecutive months.
- Between March 2021 and March 2022, Florida’s labor force grew by 325,000, or 3.2 percent, faster than the national labor force growth rate of 2.4 percent over the year.
- Between March 2021 and March 2022, total private sector employment grew by 496,600 jobs (6.5%), faster than the national private-sector job growth rate of 5.0 percent over the year.
- As of March 2022, Florida employers have added jobs for 23 consecutive months since May 2020. Florida’s private sector over-the-year job growth rate has exceeded the nation’s for 12 consecutive months since April 2021.
- Private-sector industries gaining the most jobs over the month were:
- Professional and Business Services with 9,400 new jobs.
- Manufacturing with 4,500 new jobs.
- Financial Activities with 4,200 new jobs.
Florida's real estate market has seen unprecedented price rises in the previous year, 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.