Experts predict price drops in 2 (yes, 2!) Florida housing markets. Let's find out which cities & if it's your chance to buy. The Florida housing market has experienced a period of significant price increases in recent years, but there are signs of a shift. Miami, Pembroke Pines, Tallahassee, Naples, and West Palm Beach have seen skyrocketing home prices, turning the Sunshine State into a land of opportunity for sellers.
But hold onto your hats, because forecasters predict a potential course correction on the horizon. While the national forecast suggests a slowdown in home price growth, some Florida cities might be in for a more dramatic shift. CoreLogic, a real estate data and analytics firm, puts Palm Bay-Melbourne-Titusville at the top of the list for a potential price dip by next spring.
Deltona-Daytona Beach-Ormond Beach joins the party alongside Atlanta, Spokane, and Greenville, all facing a similar prospect. Rising interest rates are the main culprit behind this potential price change. Spring is traditionally the hottest season for home sales, but this year, those higher borrowing costs have acted like a bucket of cold water on the market.
Sales of existing homes nationwide dipped in March and April, with sales of new homes following suit. This trend is likely to continue, with the National Association of Realtors (NAR) reporting a significant drop in pending home sales contracts in April.
There's a ray of hope, though. Experts anticipate a potential interest rate cut later in 2024. This could usher in a more balanced market with improved affordability and a much-needed increase in housing inventory.
Nationally, home prices are still expected to see modest growth, with CoreLogic predicting a 3.7% increase by March 2025. This means that in many parts of the country, sellers can expect to continue to enjoy a market advantage, though perhaps not to the same degree as they have in recent years.
However, the Florida market could be a different story altogether, with some cities experiencing price drops rather than gains. This is especially true for areas that have seen the most dramatic increases in recent years. Palm Bay, Deltona, and surrounding areas are prime examples.
Here, a combination of factors, including rising interest rates, a potential increase in inventory, and a cooling off period after a period of intense buyer competition, could lead to a decrease in home prices. It's important to note that CoreLogic classifies the level of risk for a price decline in these areas as “very high,” meaning there's a greater than 70% chance of a price drop by spring 2025.
This doesn't necessarily mean that every single home will see its value decrease. However, it does suggest that price negotiations may become more commonplace, and buyers may have more leverage in the market.
What does this mean for you?
Homeowners: If you live in Palm Bay, Deltona, or surrounding areas, this information could be valuable. While a price decrease isn't guaranteed, it's something to consider when making plans for the future, especially if you're thinking of selling.
Potential Buyers: Stay informed and patient. The market may shift in your favor, offering more options and potentially lower prices. Remember, a qualified realtor can be your secret weapon during this time. They can guide you through the intricacies of the market, decipher the data, and help you find the perfect home that fits your needs and budget.
Beyond the Palm Bays and Deltonas
While Palm Bay and Deltona are ground zero for potential price drops, the entire Florida market is worth watching. Even in areas that aren't predicted for a significant decline, the rise in interest rates is bound to impact affordability and buyer demand. This could lead to a more balanced market across the state, with homes staying on the market a bit longer and sellers potentially negotiating a bit more.
The Takeaway
The Florida housing market, once a seller's paradise, might be entering a period of adjustment. Whether you're a buyer or a seller, staying informed about market trends and economic factors is crucial for making sound decisions. With careful planning and the help of a skilled realtor, you can navigate this changing landscape and achieve your real estate goals.
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