Florida Leads the U.S. for Property Price Growth in the Last Year With an Average 34.8% Increase – But Can It Last?

Toby Hazlewood

Can Floridians afford to buy in Florida anymore?

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The latest numbers are out, and it would seem that the average price of homes in Florida has topped the average of all other states.

Data from the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, which measures the variation in property prices year-on-year in 20 metropolitan areas across the United States was reported on May 31.

It shows that while average property prices across the U.S. have increased by 20.6%, Tampa, FL topped the tables with an average increase of 34.8% in the past 12-months. Homes in Miami grew by an average of 32% in the same period.

The last time the same data was reported, Phoenix, AZ was ahead of Tampa but the Florida property market appears to be growing faster than its rivals.

It's not all good news though - while property owners will be delighted to see the value of their homes growing, those who are looking to move to the sunshine state, or who want to buy their first homes may be completely out of luck.

Growth prompted by Americans moving to Florida?

In spite of the heightened cost of buying a home, Florida is seeing ever-greater numbers of Americans moving to the state from elsewhere in the country.

While on some level this is good for the local economy, critics point out that the influx of people also places a burden on the state's infrastructure. Roads are busier than ever which also contributes to pollution. The net population growth in Florida is the main factor to have pushed up the price of property as demand and competition for homes to buy, increases.

Help for (some) first time buyers

Sensitive to the fact that many first time buyers who are natives of Florida cannot afford to get on the first rung of the property ladder, earlier in May Governor Ron DeSantis announced the 'Hometown Heroes' program. The state has allocated $100 million to assist a specific group (largely public services employees, veterans and first responders) with their down payments to help them buy their first homes.

Time will tell whether this helps that group to buy a property in their home state, but even if it does, the help is only accessible by a small subset of the Floridians who are struggling to buy a home due to the astronomical cost.

The only way is down?

One other point of concern for Floridians right now, is that in line with other investment markets that have taken a plunge recently, with property prices being at an all-time high right now, the only way for them to go could conceivably be down.

Analysts predict that while prices are high, and growth in value continues, there's a danger that eventually supply will outstrip demand and prices have nowhere to go but down. For those who buy in the near future, at the top of the market there is a real danger of losing money through their property investment, and being tied to it for the longer term.

While it's a great sign for Florida's economy that property prices are booming, it seems like there could also be uncertain times ahead too.

Are you concerned about the constant rise in property prices in Florida or are you celebrating the fact? Do you think the value of homes will keep increasing? Let me know in the comments section below.

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