Will a Housing Crisis Hit Florida? (2024)

FAQs

Is the housing market in Florida expected to drop? ›

Lakeland, FL:

Overall, the Florida housing market is likely to remain strong in 2023, with continued demand for homes and steady price growth. However, the market may begin to stabilize as the growth rate slows down, which may lead to more balanced conditions between buyers and sellers.

Florida built hundreds of thousands of new rental units between 2012 and 2021, but lost nearly 277,000 units with monthly rents below $1,000, according to the University of Florida.

Over the past few years, home prices in Florida have skyrocketed. Per Redfin data, in the middle of 2020, the median sale price was $275,600 — by April 2023, that figure had jumped to $400,800. The state remains one of the top markets people move to, and its increasing population will likely keep the market robust.

South Florida is one of only two US markets forecasted to see price appreciation in 2023, according to the Goldman Sachs forecast. Wealth migration, cash buyers, and global companies continue to relocate to South Florida, which is expected to contribute to the strong housing market.

The year 2024 is expected to bring more stability to the housing market after a few years of uncertainty. With mortgage rates declining faster than expected, home prices are likely to remain mostly flat throughout 2024.

There are various reasons why people are moving to Florida. The most common ones include warm weather, affordable cost of living, and job opportunities. Additionally, many people are reevaluating their living situations and considering moving to areas with more space and outdoor activities.

The report finds a national shortage of 7.3 million affordable and available rental homes for extremely low-income renters – those with incomes at or below either the federal poverty line, or 30% of their area median income (whichever is greater).

Florida Housing Market Overview

Looking at the five-year period from September 2017 to September 2022, the median sale price in Florida peaked in May 2022 at $410,900; as of September 2022, the median sale price is down to $392,500.

Why are Florida home prices so high? ›

Florida is one of the most expensive states for housing, and Miami is the least affordable city in the country, according to a report. High demand, short supply, increased migration trends since the pandemic and exploding mortgage rates, make for a pricey combination.

Florida is expensive because of its popularity among retirees and tourists. Retirees often have disposable income and spend it on activities like golfing, fishing, and boating. Additionally, housing, food, and healthcare costs are higher in Florida compared to other states.

Homebuyer.com data analysis indicates that, for first-time home buyers, June 2023 is a good time to buy a house relative to later in the year. This article provides an unbiased look at current mortgage rates, housing market conditions, and market sentiment.

As of Q4 2022, the number of closed sales for single-family homes decreased by 33.1% from the previous year and the number of new listings was down 17.1% from the year before, according to Florida Realtors. That doesn't mean it's a bad time to buy, though.

Zillow still predicts that the vast majority of regional housing markets will see home values appreciating in 2023. Among the 897 regional housing markets Zillow economists analyzed, 853 markets are predicted to see rising house prices over the next twelve months ending with April 2024.

After falling in 2023 and 2024, home prices are predicted to plateau in 2025 before rising again at just above the rate of inflation. However, due to the spike in home values from 2020 through 2022 due to record-low mortgage rates, median sales prices will take at least until 2027 to regain the highs of mid-2022.

These organizations predict that mortgage rates will decline through the first quarter of 2024. Fannie Mae, Mortgage Bankers Association and National Association of Realtors expect mortgage rates to drop through the first quarter of 2024, by half a percentage point to about nine-tenths of a percentage point.

The Average US Home Could be Worth $382,000 by 2030

House prices in the US have risen by 48.55% in the last ten years (from $173k to $257k) and if they continue to grow at this rate for another decade, the average US home will be worth $382k by 2030.

Florida is an excellent location if you're looking for work. According to Wallethub, Florida is the 14th best state to find a job. The unemployment rate in Florida was only 2.5% in December 2022. With the national unemployment rate at 3.4%, many people move to Florida to take advantage of opportunities in their fields.

Over 70 percent believe Florida's overcrowding and overpopulation is a major problem. Nearly 60 percent believe that adding another five million people to Florida's population is a serious problem. Forty percent say Florida has become a less comfortable place to live over the past five years.

Where do most Floridians move to? ›

Pinellas County has one of the highest concentrations of any Florida county, at nearly 0.3% with nearly 3,000 homeless people and a population in general of almost one million.

Jacksonville is the most affordable city in Florida and coincidentally, it also has the youngest population in the state. There are activities and features galore here including 22 miles of beaches, historic neighborhoods, world-class fishing, museums, parks, and a thriving restaurant and craft beer scene.

California, Illinois, New Jersey, and Delaware are home to the most at-risk housing markets, according to a Special Housing Risk report released by real estate data firm ATTOM. “Some parts of the country remain considerably more exposed to housing market declines than others,” says Rob Barber, CEO of ATTOM.

Story at a glance

California currently has the largest deficit of homes at 980,000.

According to worldpopulationreview.com, Hawaii is the most expensive state to live in, with its housing costing three times the national average. New York and California rank as the second and third most expensive states in which to live, respectively.

Advanced economies are expected to see an especially pronounced growth slowdown, from 2.7 percent in 2022 to 1.3 percent in 2023. In a plausible alternative scenario with further financial sector stress, global growth declines to about 2.5 percent in 2023 with advanced economy growth falling below 1 percent.

More than 1.8 billion people around the world do not have adequate housing, an estimated 15 million people are forcibly evicted every year, and 150 million more are living in homelessness.

Are Florida homes overvalued? ›

Florida has some of the most overvalued housing markets in the country. MIAMI - A new report shows that Florida is still one of the worst places for home buyers right now with nine of the top 14 most overvalued U.S. markets here in the state.

While prices may slightly drop year-over-year at some point in 2023, Beracha predicted they won't fall by much. He said South Florida needs between five to 10 years' worth of new housing construction at the pace homes are being built here today. And higher interest rates since early last year have slowed home building.

Will home prices drop in 2023 in Orlando? Due to an increase in inventory, home prices in Orlando may slightly decrease this year. Following the basic economic principle of supply and demand, the surge in supply will translate to more bargaining power for buyers.

The ten most expensive states to live in are Hawaii, Massachusetts, California, New York, Alaska, Maryland, Oregon, Connecticut, New Hampshire, and Vermont. Hawaii is the most expensive state to live in, with a cost of living index of 184.

Overall, the cost of living in Florida ranks as the 24th highest among states. It is important to note that this index reflects the annual average cost of living in 2021 and does not account for recent price increases due to inflation.

Florida houses also tend to be smaller in size than other homes in different states. As these properties are smaller, median property prices will be lower as well. Additionally, houses for sale in Florida tend to be older homes. This factor contributes to the lower property prices as well.

Florida is becoming one of the most popular places to live. That's also making it more and more expensive. Inflation has hit Miami harder than any other metro area. Ultimately, it doesn't matter where you live; you're probably struggling to keep up with skyrocketing inflation, which hit a 40-year high last year.

Buying a House in Florida

Housing prices are much cheaper in Florida than they are in California. In fact, homes in the Los Angeles area of California cost up to 180% more than homes in Orlando, Florida.

Chief Economist at First American Financial Corp, Mark Fleming, says an interest rate drop may not happen for several months. "Possibly in 2024, but it will depend on the Fed's decisions about raising rates in the second half of the year," says Fleming.

What is the best date to close on a house? ›

If you need to be occupying your home by a certain date to save on rent, it's a much better deal to close at the end of the previous month (for example, January 30) instead of the beginning of the current month (February 1).

Despite what some may think, 2023 is still a good year to invest in real estate, thanks to advantages like long-term appreciation, steady rental income, and the opportunity to hedge against inflation. Mortgage rates are expected to decline, but the housing market is likely to remain competitive due to low supply.

Overall, the Florida housing market is likely to remain strong in 2023, with continued demand for homes and steady price growth. However, the market may begin to stabilize as the growth rate slows down, which may lead to more balanced conditions between buyers and sellers.

The Florida Market Will Cool Down by 2022

The housing market in Florida was growing at a record rate in the early stages of the coronavirus outbreak in February 2020. Sellers were retaining their advantage, and buyers were taking advantage of reduced mortgage rates.

Maybe, maybe not. But the market forces of rising interest rates, from 3.8% to 5.34%, to 5.97%, to 7.81% finally hampered the buying power of homebuyers, slowing home sales. In Lee County from 2021 to 2022, single-family home sales dropped by 19.5%. Collier sales fell by 31% and Charlotte by 9.3%.

According to a report by Zillow, home values are projected to increase by 5.5% over the next year, slower than the 16.9% increase seen in 2021. Zillow predicts that home values will increase by 3.5% in 2023, 3.4% in 2024, 3.3% in 2025, and 3.2% in 2026.

How much will property prices rise in 20 years? Based on historical national average data of 3.5% home value growth rates, property prices in the US for residential homes will almost double within 20 years! The reason prices will double at that rate is because of compounding growth.

Miami Real Estate Market: Predictions

The U.S. News Housing Market Index predicts that the first five months of 2023 will see just under 3,265 single-family homes and just over 5,545 multifamily housing units approved for production.

Median Home Price in Tampa

It's also below the nation's median of $387,000. “I do not expect prices to drop any time soon,” Korneva says.

Is Tampa a buyers or sellers market? ›

Tampa is a Sellers Housing Market, which means prices tend to be higher and homes sell faster.

In 2023, experts forecast that the Florida home prices may fall down to 20%. Mortgage Rates Have Almost Doubled: Mortgage rates almost doubled from April 2021's 3.12% to 6.27% for the week ending on April 13, 2023. Sellers are Coming Back, but Slowly: The number of listings dropped by 14.9% in March 2023.

Revised Housing Market Forecast

Although home prices are expected to improve in the second half of the year, the California median home price is projected to decrease by 5.6 percent to $776,600 in 2023, down from the median price of $822,300 recorded in 2022.

Despite what some may think, 2023 is still a good year to invest in real estate, thanks to advantages like long-term appreciation, steady rental income, and the opportunity to hedge against inflation. Mortgage rates are expected to decline, but the housing market is likely to remain competitive due to low supply.

In 2022, local news was abuzz with reports that Tampa had one of the country's most overpriced real estate markets. In fact, Tampa is considered the 9th most overpriced city in the country when it comes to housing, according to Florida Atlantic University's Beracha and Johnson Housing Index.

Lots of Land Contributes to Lower Prices

In South Florida, where there is a scarcity of land, prices are higher. But the abundance of land in the rest of the state results in lower prices for both land and homes.

Is it a good time to buy a house in Tampa? Tampa home values are expected to rise almost 25% in 2022 compared to 14% nationwide. You won't just be competing with traditional buyers, either; in 2021, a whopping 25% of real estate in Tampa Bay was sold to an investor.

Hot Tampa Bay real estate trends

In 2022, Tampa Bay ranked in the country's top 5 places to live. The area is experiencing more people relocating to the area than it has in decades. As a result, the Tampa Bay housing market continues to experience high demand. The area remains one of the more affordable places to live.

The study said a single person in Tampa Bay without a child must make $67,740 post-tax annually. To determine how much money is needed to live comfortably in the largest metro areas, the study used the 50/30/20 rule.

Why is Tampa growing so fast? ›

According to the study, a steady influx of international immigration continues to drive population growth in the Sunshine State.