Florida’s Seller’s Market Continues

Florida’s Seller’s Market Continues:  Florida Real Estate in 2024: A Seller’s Market Continues

Initially, Florida’s housing market continued its bullish run in 2023. Despite soaring mortgage rates and economic headwinds, home prices kept climbing. Consequently, the median sale price rose 2.8% year-over-year to $402,500 in September. Moreover, the number of homes sold increased by 1,200 to 30,815.

Remarkably, there were no markets in Florida where prices declined year-over-year. In Miami, for instance, homes sold for a median of $575,000 – up 7% from 2022. Similarly, Tampa saw a 6.4% year-over-year increase with a $415,000 median sale price.

Florida’s Seller’s Market Continues:  Mortgage Rates at Record Highs

However, the significant factor was sky-high interest rates hitting 8.5% in September 2023. As a result, far fewer home buyers were in the market. Nonetheless, with inventory remaining extremely tight, an astonishing 14.9% of homes sold above list price!

Florida’s Seller’s Market Continues:  Advice for Home Buyers

For prospective home buyers, the current climate presents an opportunity. By purchasing now, bidding wars can potentially be avoided while leveraging seller concessions. Additionally, though the 8.5% interest rate translates to considerable mortgage payments, rates are unlikely to decrease in the immediate future. If they do eventually drop, buyers can always refinance.

Florida’s Seller’s Market Continues:  Advice for Home Sellers

On the other hand, home sellers are in an enviable position to lock in Florida’s lofty home prices. Significantly, homes listed on the Multiple Listing Service (MLS) not only sell faster but command a 17.5% premium over off-MLS listings – potentially thousands of dollars in additional proceeds.

Florida’s Seller’s Market Continues:  Florida Defies National Trends

Remarkably, current Florida real estate statistics defy broader national trends of high demand outstripping supply. Despite 2023’s sluggish market conditions, both home sales and property prices in the Sunshine State increased year-over-year.

In essence, Florida’s housing market remains robust, if not outright bullish. Notably, even if mortgage rates continue their alarming ascent, Floridian home sales are projected to remain resilient. For sellers, this signals an opportune moment to list properties on the MLS.

Florida’s Seller’s Market Continues:  Florida Real Estate Statistics

To fully comprehend the market dynamics, let’s delve into the key Florida real estate statistics:

Home Prices

• The statewide median home price stands at $402,500, reflecting a 2.8% year-over-year increase.
• In 2024, experts anticipate the median sale price will rise further due to persistent inventory constraints.
• Currently, the sale-to-list price ratio is 97.4%, a modest 0.27 percentage point decline compared to September 2022.

Home Sales

• September 2023 data reveals a 5% year-over-year uptick in home sales.
• 30,887 homes were sold that month, up from 29,562 in September 2022.

Florida’s Seller’s Market Continues:  Rental Prices

• Average rental costs vary across Florida, with tenants in Miami paying around $1,635 while those in Tampa pay approximately $1,300 on average.

Days on Market

• The median number of days homes spent on the market before selling was 43 days, an 8-day increase from 2022 levels.

Inventory Levels

• The number of homes listed for sale grew by 3.4% year-over-year compared to 2022 levels.
• Currently, there are approximately 143,000 homes listed for sale statewide.

Months of Supply

• On average, the current inventory represents a 4-month supply of homes.
• While tight, Florida’s inventory levels are less constrained than the national housing market overall.

Florida’s Seller’s Market Continues:  2024 Predictions: Florida Housing Market

Having weathered the shocks of surging mortgage rates and escalating home prices in 2023, what lies ahead for Florida’s housing market in 2024? Here are our key predictions:

Seller Re-Entry Many sellers who bided their time on the sidelines in 2023 are anticipated to re-enter the market next year. This cohort includes those compelled to relocate for new jobs or seeking more affordable locales. Additionally, respected analyst Whitney – who accurately foresaw the 2008 financial crisis – has forecasted that downsizing baby boomers could add up to 30 million housing units to inventory levels nationwide, providing a substantial supply boost.

Florida’s Seller’s Market Continues:  Mortgage Rate Stabilization

After peaking at a stratospheric 7.79% in October 2023 (the highest in 23 years), mortgage rates eased slightly to 7.35% in November amidst a softening labor market, slowing economic growth, and moderating inflation (which fell from 3.7% to 3.2% annually). While rates are expected to remain elevated above 6% in 2024, we anticipate relative stabilization during the second half of the year.

Resurgence of Home Buyers Prohibitively high interest rates deterred many prospective home buyers throughout 2023. However, the recent rate dip to 7.35% in November has already sparked a resurgence in mortgage demand. As inflation cools further and rates stabilize, a steady influx of house hunters is projected to re-emerge.

Florida’s Seller’s Market Continues:  Continuing Home Price Appreciation

Despite headwinds, home prices across Florida’s major metros continued climbing year-over-year, reaching a statewide median of $402,000 in September 2023. Underpinned by enduring supply constraints and robust demand, most experts foresee home prices sustaining their upward trajectory until market dynamics shift more favorably.

New Home Construction Rebound A noteworthy 12.3% of September’s home purchases were new construction – the highest level since 2022. To entice buyers amidst 2023’s challenges, home builders offered substantial concessions averaging $30,000. This dynamic is expected to intensify in 2024 as builders and resale home sellers fiercely compete for available buyers.

Aggressive iBuyer Tactics Institutional home-buying firms (“iBuyers”) like Opendoor and Offerpad have suffered staggering losses of billions in 2023. Consequently, these companies are anticipated to resort to aggressive, low-ball offers as they struggle for survival. In stark contrast to offering 104.1% of market value in 2021, iBuyer bids plummeted to just 86% in 2022 and a mere 70% throughout 2023 on average.

Florida’s Seller’s Market Continues:  The Prospect of a Housing Crash

A precipitous crash in Florida’s housing market, however, appears highly improbable. The Sunshine State’s perennial appeal – blessed with balmy weather and scenic beaches – continues luring droves of buyers year after year. Indeed, Florida was the second-fastest growing state in 2022 and 2021, attracting nearly 92,000 new residents annually.

Moreover, cities like Fort Myers (the nation’s fastest-growing in 2023) and the broader Southwest Florida metro area ranked among the 30 fastest-expanding regions in 2022. Not surprisingly, the Miami-Fort Lauderdale-Pompano Beach area remains the most coveted neighborhood for house hunters eyeing the state.

Buttressing demand is Florida’s robust job market which, with a mere 2.8% unemployment rate, saw private sector employment swell by 2.5% in September 2023 – outpacing the 2.0% national average. The state’s business-friendly policies, including lack of individual income tax, only amplify its appeal from an affordability standpoint: Florida’s $50,000 average cost of living is quite reasonable given the $73,000 median household income.

Given these compelling factors, the prospect of an imminent housing market crash in Florida seems highly unlikely in the foreseeable future.

Florida’s Seller’s Market Continues:  St Petersburg: Tampa Bay’s Red-Hot Housing Gem

While the Tampa metro area commanded hefty $415,000 median home prices in its own right, it was St Petersburg that truly sizzled as one of Florida’s hottest housing markets in 2023. Nestled along the Renaissance City’s sunny Gulf Coast shores, homes in St. Pete flew off the market at breakneck pace.

Despite interest rates soaring above 8% for much of 2023, sale prices in this Tampa Bay gem displayed remarkable resilience. The median sale price clocked in at $425,000 as of September data – a staggering 15% year-over-year increase. Concurrently, the brisk pace of sales showed no signs of abating with a modest 3% annual decline in sales volume.

So what fueled St Petersburg’s housing frenzy amidst broader market cooling? A combination of lifestyle appeal, strong employment anchors, and profoundly constrained supply underpinned the relentless demand. Young professionals and retirees alike flocked to the area’s vibrant downtown, cultured arts scene, award-winning beaches, and arguably unmatched year-round tropical climate.

Florida’s Seller’s Market Continues:  St Pete

Moreover, St. Pete’s deep economic roots in sectors like healthcare, technology, and financial services ensured a steady influx of high-income buyers. Major employers like Raymond James, Jabil, and Johns Hopkins All Children’s Hospital continued expanding regional operations throughout 2023.

However, it was the paucity of available inventory that truly supercharged home price appreciation last year. At just a 1.7-month supply, St. Petersburg ranked among the most severely inventory-starved markets nationally according to September data. This imbalance of stratospheric demand against virtually non-existent supply inevitably stoked rampant bidding wars and properties routinely selling for significantly above asking price.

Looking ahead to 2024, realtors anticipate St. Petersburg’s sizzling momentum to persist for the foreseeable future. While the supply/demand mismatch could moderate as mortgage rates stabilize and additional sellers list properties, the region’s compelling fundamentals should maintain it squarely in “seller’s market” territory. Any incremental inventory relief would simply enable pent-up buyers better opportunities to stake their claim in St. Pete’s idyllic Beach Renaissance lifestyle.

Florida’s Seller’s Market Continues:  2024: A Seller’s Market…With a Caveat

All indicators point to 2024 shaping up as another stellar year for home sellers in the Sunshine State. With home prices continuing to escalate and outstrip demand, market conditions undeniably favor sellers in the short term.

Furthermore, September 2023’s inventory level of 143,000 homes for sale statewide closely mirrors the 142,000 figure from summer 2023 – traditionally regarded as the prime selling season in Florida. The recent dip in mortgage rates to 7.35% in November has already catalyzed a fresh wave of new listings hitting the market from sellers previously deterred by loan-lock incentives at higher rates.

As we transition into the Spring 2024 selling season, this trend is poised to intensify with growing numbers of homeowners emboldened to list their properties amidst greater comfort with 7% mortgage rates. Concomitantly, improved affordability has reignited demand from buyers frustrated by 2023’s dearth of inventory – as evidenced by the recent uptick in mortgage applications.

Florida’s Seller’s Market Continues:  New Construction

However, one substantial caveat bears emphasis: resale home sellers will face intensifying competition from builders of new construction homes. Throughout 2023’s headwinds, builders effectively lured buyers through aggressive incentives like $30,000 mortgage buydowns. Such concessions are likely to persist in 2024 as builders vie to capture available demand.

Consequently, listings of new construction properties will proliferate alongside those from downsizing baby boomers and anxious existing home sellers eager to cash out. This influx of supply should ultimately empower buyers with greater optionality in 2024.

Florida’s Seller’s Market Continues:  Conclusion

So whether your goals involve acquiring a trendy Miami condo or laying roots in a Tampa single-family home, prospective buyers can reasonably anticipate their long-awaited moment will arrive next spring. Conversely, home sellers would be well-advised to strategically list sooner rather than later to optimally capitalize on 2024’s selling conditions before escalating new supply cools the market.

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