Florida's sunny beaches and booming economy have attracted more buyers to its real estate market than any other state. The impact has contributed to the reasons that the real estate market of Florida is lucrative to the state's economy. Building, buying, leasing, and selling it generates revenue, creates jobs, and contributes more than $227.3 billion annually to the state's economy.
Unfortunately, with rising home prices and a surge in luxury condos, you can see a sharp decline of 19.7% in single-family, and townhouse closed sales. The housing market continued to flourish with a 3.2% year-on-year increase in median sale prices in March 2023. However, the current mortgage rates have fallen to a tempting 6.27%.
Suppose you're considering owning a house in Florida or already have a property in the Sunshine State. In that case, staying informed about the latest market trends is crucial before moving to your next property. You should know if the housing market in South Florida in 2023 is speeding up, cooling down, or crashing. Are you ready to see where things stand? This article and an informative YouTube by April Laura will give you a good insight.
Navigating the Florida market trends
The first quarter of 2023 has brought significant changes in the real estate market for consumers, realtors®, and policymakers. For instance, median home prices, closed sales, new listings, inventory supplies, and house repairs were the key factors that drove house prices up and the housing market less active.
Average home prices hit a 3.2% uprise YoY.
As expected, the average median home price in Florida reached $400,000 increased by 3.2% YoY. However, experts believe the median sale price will show a first annual drop of roughly 4% by the end of 2023.
Home sales drop
Elevation In mortgage rates
"Mortgage rates will come down, but it depends on different factors. For example, all of the current forecasts on existing home sales in 2023 rely on where the 30-year mortgage rate will be, and that's in flux," - Chief Economist Dr. Brad O'Connor.-
Selling has slowed
Another surprising trend of the first quarter was a drop in the number of listings by 14.9%. Last year Florida homes stayed on the market for an average of 24 days. Now the figure has increased up to 49 days in March 2023. This means sellers slowly return to purchase land in The Sun Shine State. Currently, there are 70,439 pending listings for sale in Florida – a decline of 0.8%.
"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," -David Zandi, a realtor in Florida. -
Rising average rent prices
Due to high inflation, the state of Florida lingers at the top of the nation for the highest rental prices, with an increase of 29% since last year. The rental market in Florida is also highly competitive. If you're renting a property in Florida, you may have noticed the rents rose from $1,256 to $1,635, which is quite a jump.
A lot of our Florida markets are way overpriced compared to the rest of the country," - Ken H. Johnson, a real estate economist at the Florida Atlantic University
What about a crash?
Economists and real estate experts believe the housing market will slow down but not crash. As the mortgage rates stabilize after the recent bank crisis, more Millennials and Hispanics feel confident about entering the housing market.
Online real estate services are gaining popularity
47% of home buyers started searching for properties online. As a result, well-known real estate websites like Zillow or Realtor.com are booming for many benefits. Now, it is becoming easier to buy and sell properties due to third-party buyers, affordable listing packages, using virtual agents, on-demand buying experience, and closing deals online.
Florida Real Estate Mark Trends, Insights, and Analysis YouTube by April Laura
Analysis of Florida real estate moving forward
Due to skyrocketing inflation, the Florida home process rate rose about 80% over the past five years. The housing market is determined by the economy's health of a state. As inflation increases, the economies slow, and as a result, the money supply becomes limited.
Will home prices decline?
Since the Covid-19 pandemic, Florida has been the hottest market for investors but has significantly slowed down. As a result, experts forecast that you will see a 20% fall in Florida home prices. Even though the current market could be better for sellers or homeowners, buyers have more of an upper hand overall. Therefore, home sales are expected to plunge by 18.8% in Q2.
Median sale prices
NAR experts predict a rise of 8.08% in the median sale price in the second quarter of 2023. Moreover, the housing market will continue to warm up between high mortgage rates and economic uncertainty. As per Zillow's Florida housing market forecast, the national Zillow home value index rose by 4.4% in February 2023. Through the following year, it is expected to escalate by 0.6%.
Mortgage rates stabilizing at 6 to 6.5%
As of April 13, 2023, the 30-year fixed-rate mortgage in Florida averaged 6.27%, a decrease from the previous week's average of 6.42%. Although these rates have declined, they remain lower than the peak of 7.08% seen last year.
Stable housing affordability
According to NAR's chief economist, rates will remain stable for existing homes in 2023, and approximately 4.78 million will be sold.
"Pent-up housing demand is evident with every gain in affordability, whether softening prices or lower mortgage rates. As the prime spring buying season takes off, buyers will be looking for well-priced, ready-to-move-in homes," -Hannah Jones, economic data analyst at Realtor.com.-
How to benefit from these insights?
This year is highly unusual and unexpected compared to previous housing market trends. That's why gauging whether it is a seller's or a buyer's market is challenging.
79% of experts think 2023 is an excellent time to buy a house in Florida. Relatively high mortgage rates and shoot-up home prices only allow buyers with stable financial conditions to enter the property market. If you're planning to buy now, plan your finances well and ensure you have 5 to 6 months of savings after you put your down payment.
"On the homebuyer front, the news is more positive with improved purchase demand and stabilizing home prices. If mortgage rates continue to slide over the next few weeks, look for a continued rebound during the first weeks of the spring homebuying season," - Sam Khater, Freddie Mac's chief economist.-
Only 10% of homeowners believe now is an excellent time to sell a home. Home prices are still at record highs, but some experts predict that many markets will decline by 5% to 10% in the second quarter of 2023. But, of course, if you've got a new job, have decided to retire, or transfer to a new location, there is no way around selling. My residents say the best time to sell a house is when you're mentally ready to move. I have to agree with them. Moving can be an emotionally taxing decision.
"Housing prices are beginning to flatten but continue to resist declines as buyer interest perks. Buyers are still waiting in the wings, interested in purchasing a home as soon as they can do so financially. We continue to see that homeownership remains a strong goal for consumers, particularly for young adults looking to start a family who feels secure in their jobs and ready for that next transition."- Dr. John Leer, chief economist for Morning Consult. -
Florida is a popular worldwide tourist destination with year-round sunlight and world-class amusement parks. So whether you're planning to buy, sell, or rent a home in Florida, navigating the current market conditions and making informed decisions is essential.
As per March data, only 2.9 months' supply is available in 2023. This scarcity of inventory explains why you should bid over the listing price. According to the law of supply-demand, home prices are predicted to remain stable for now. As the slow market is the buyer's market, the home values may decrease before they start to increase again. So, anything less than six months of homes says you are in a buyer's market. Anything more is a seller's market.
"Now, we expect the state's residential real estate market to return to a more typical pace. I believe 2023 will look more like the 'traditional' housing market years of 2018-2019 in Florida as supply and demand become more balanced."-Chief Economist Dr. Brad O'Connor -
This article is for informational purposes only. It should not be considered financial, real estate, or legal advice. The market fluctuates; therefore, not all information will remain the same. Consult a financial or real estate attorney before making significant real estate decisions.