The current Florida real estate market statistics diverge from the national trend of high demand and low supply. In Florida, both home sales and property prices increased despite the overall slow market in 2023.
So, How Is the Real Estate Market in Florida?
It is Thriving! Home values in Florida have surged by 66.3% over the past five years. In January 2024, home sales rose by 0.9% year-over-year, despite mortgage rates climbing to 7.28%. This indicates that Florida’s housing market is robust, if not bullish. Even if mortgage rates continue to rise significantly, home sales are unlikely to decline. Therefore, if you're considering selling a property in Florida, now is the ideal time to list it on the MLS.
List Your Florida Home for Sale with AiRESS: Prospective buyers and buyer agents are actively searching the MLS for turnkey properties.
Florida Real Estate Market Statistics
Average Home Prices: The median home price in Florida is $404,100, marking a 4.6% increase year-over-year. Experts predict that the median sale price will continue to rise in 2024 due to the tight inventory. The current sale-to-list price ratio is 96.50%, reflecting a slight decline of 0.13 points compared to January 2023.
Home Sales: In January 2024, home sales rose by 0.9% year-over-year, with 21,872 homes sold compared to 21,682 in January 2023.
Average Rent Prices: Rental costs vary across the state. In Miami, the average tenant pays $2,451, while in Tampa, the average rent is $1,923.
Median Days on Market: Homes for sale had a median of 59 days on the market, an increase of 6 days year-over-year.
Pending Sales: The number of homes for sale grew by 19.9% year-over-year, with 171,000 homes currently available in Florida.
Months of Supply: The average months of supply is 6 months, indicating that Florida's inventory is not as constrained as the national housing market.
Florida Housing Market Predictions 2024
Predictions for Florida’s Housing Market
Home Sellers Will Return to the Market in 2024: Many sellers who stayed on the sidelines in 2023 are expected to re-enter the market, particularly those who need to relocate for new jobs or seek more affordable living options. Analyst Whitney, who accurately predicted the 2008 financial crisis, forecasts that baby boomers looking to downsize could add up to 30 million housing units.
Mortgage Interest Rates Will Stabilize by the Second Half of 2024: Mortgage rates peaked at 7.79% in October 2023, the highest in 23 years, but dropped to 7.28% in January due to a softening labor market and slowing economy. With annual inflation decreasing from 3.7% to 3.2%, we anticipate rates will remain above 6% but stabilize in the latter half of the year.
The Number of Home Buyers Will Rise: High interest rates deterred many buyers in 2023, but mortgage demand increased after rates lowered to 7.35% in November. As inflation eases and rates stabilize, more buyers are expected to return to the market.
Home Prices Will Continue to Rise: Home prices in Florida’s top metros have steadily increased year-over-year, reaching $404,000 in January 2024. Experts predict this upward trend will continue until the low supply-high demand dynamic shifts.
New Home Construction Sales Will Increase: In September, 12.3% of homes purchased were new constructions, the highest since 2022. Home builders, who offered $30,000 worth of concessions to attract buyers in 2023, are expected to continue competing with sellers for buyers in 2024.
iBuyers Will Continue to Make Lowball Offers: iBuyers offered 104.1% of market value in 2021, but this dropped to 86% in 2022 and around 70% in 2023. Companies like Opendoor and Offerpad have lost billions in 2023, and as they struggle to survive, they are likely to continue making lowball offers.
Buyer Broker Commissions Will Be Negotiable!: In a surprising decision, a Missouri jury awarded over $5 billion in damages to the Sitzer-Burnett plaintiffs. This verdict has prompted home sellers across the country to file complaints against the NAR’s Cooperative Compensation Rule. This rule, also known as the Participation Rule, requires listing brokers to offer competitive compensation to buyer agents in order to list properties on a NAR-affiliated MLS.
Lawsuits such as Moehrl, Gibson, Batton, Nosalek, and Batton 2 challenge the Participation Rule, accusing NAR and leading real estate companies of colluding to keep agent commissions high. If the jury finds the defendants guilty in these cases, it could lead to significant changes in buyer agent compensation, potentially making buyer agents obsolete by 2025. While it is unlikely that buyer agents will become obsolete in 2024, they may be more open to negotiating commissions. This flexibility could help them remain relevant in the industry.
When will the Housing Market Crash?
A housing market crash in Florida is unlikely. The state's beautiful beaches and warm weather will continue to attract buyers. As the second-largest state in the U.S., Florida saw around 92,000 new residents in both 2021 and 2022. Fort Myers was the fastest-growing city in 2023, and Southwest Florida was among the 30 fastest-growing metro areas in 2022. The Miami-Fort Lauderdale-Pompano Beach area remains a popular destination for house hunters.
Florida's job market is robust, with an unemployment rate of just 3%. In September 2023, private sector employment grew by 2.5%, outpacing the national average of 2.0%. Additionally, Florida's favorable tax policies and relatively affordable cost of living, averaging $50,000, make it an attractive place to live. The median household income is $73,000, making living on Florida's sandy beaches relatively affordable. Given these factors, a housing market crash in Florida seems unlikely in the near future.
2024 Market Outlook: Great for Sellers (& Buyers!)
The 2024 market looks promising for sellers, and buyers too! Home prices in Florida are on the rise and are expected to continue climbing until the supply-demand dynamic shifts. In January 2024, there were 171,773 homes for sale in Florida, up from 142,000 in the summer of 2023, traditionally the best time to sell a house in the state.
In November, the mortgage rate dropped from a two-decade high of 8% to 7.28%, resulting in an increase in new listings. This indicates that homeowners who were hesitant to sell due to high mortgage rates are now adjusting to the 7% range. By Spring 2024, even more homeowners are expected to list their properties on the Florida MLS.
The increase in new home listings in Florida has enticed home shoppers who were previously on the sidelines. The recent rise in mortgage applications indicates that buyers are returning to the market. Those who couldn't find affordable homes in 2023 will start shopping again in 2024, driving up demand for Florida houses. This market dynamic favors sellers, allowing them to potentially dominate.
However, new construction homes will provide strong competition. In 2023, home builders successfully attracted buyers with mortgage buydowns worth $30K, and they are likely to continue offering similar concessions in 2024. This means that home sellers may face stiff competition from new builds.
Listings of new constructions, baby boomers looking to downsize, and motivated home sellers are expected to flood the market in 2024, increasing the number of properties for sale in Florida. Whether you're searching for a condo in Miami or a single-family home in Tampa, you'll have plenty of options to find your dream home next spring.
