The 2024 Florida housing market is undergoing significant changes, reaching a pivotal moment that will shape future trends in home prices. If you’re looking to purchase or sell a home soon, this information is crucial.
Market Overview
Starting with a high-level perspective, let’s examine the U.S. housing market performance data. Nationally, median home prices hit an all-time high in April 2024. Despite a slower pace compared to the market frenzy of two to three years ago, the demand still exceeds the supply, pushing prices upward. Predictions of a market crash over the past few years have proven inaccurate, as the market remains strong.
Florida’s Housing Market
Focusing on Florida, the median home price also reached an all-time high in April 2024, now at est. $391,000 (source: SunStats). However, it’s essential to analyze the market locally, including city and neighborhood levels. While Florida overall appears stable, deeper analysis reveals emerging cracks.
Single Family Homes:
- All-time high median price: Est. $429,000, an almost 5% increase from last year.
Condos and Townhomes:
- All-time high median price: Est. $335,000, up slightly over 3% from last year.
Looking ahead, we might see a dip in median prices due to the effects of the SB-4D Milestone Inspection and Reserve Study mandate. This mandate affects older buildings, especially those near the shore, requiring inspections and potential costly assessments. Many condo owners facing these assessments are struggling, which could lead to increased sales and potential price drops.
Impact on Condos
Negative headlines about condo assessments are likely to depress demand, even though many Florida condos remain good investments, particularly newer ones under three stories. If considering an older condo, ensure the building has been well maintained over the years, has undergone the necessary inspections and understand the assessment costs, which you can factor into your offer price. You may want to utilize the services of a buyer’s agent to help you navigate the condo market.
Regional Market Differences
Florida’s real estate market varies significantly by region. Cities like Miami, Orlando, and Tampa are thriving, with prices continuing to rise. However, areas like Fort Myers, Cape Coral, and North Port, which were heavily impacted by hurricanes, are experiencing softer demand. Many single-family homes (SFH) in these areas sustained storm damage, and sellers are now trying to offload these properties. Additionally, the region faces higher insurance costs and longer market times, resulting in SFH price declines of over 4% year-over-year in the Cape Coral – Fort Myers region. Meanwhile, townhouses and condos in that area have seen a slight increase in median prices compared to the same time last year.
Market Context
Many recent articles highlight how homes are staying on the market much longer compared to 2 or 3 years ago. While this is true, it’s crucial to provide context. When compared to 2019 and 2018, single-family homes are taking about the same time to sell, with the median price in 2019 still rose by 3.9% vs 2018. The pandemic years are statistical outliers and unlikely to repeat unless another global event occurs. Using 2019 as a benchmark offers a clearer performance comparison. Currently, single-family home market conditions are similar to those in 2019. However, the condo market has changed significantly, with a 6.9-month supply. In a healthy market, prices typically remain stable around a 6-month supply. Given the current oversupply, it is likely that condo prices will start to decline.
Future Predictions
Predicting the market’s future is challenging, with various factors influencing outcomes. Despite concerns about the condo market and insurance costs, single-family homes are likely to remain stable. Buyers are also shifting preferences due to these factors, impacting demand in different areas.
Interest rates play a significant role. Should they decrease, sidelined buyers may re-enter the market, especially for homes priced between $400,000 to $1 million. The luxury market remains strong, driven by cash buyers from higher-cost states.
Florida continues to attract retirees, remote workers, and millennials starting families. These groups find Florida appealing for its affordability and lifestyle, further supporting market demand.
Conclusion In conclusion, the Florida housing market is undergoing significant changes, reaching a pivotal moment. While prices at the national and state levels are still on the rise, local dynamics reveal more nuanced trends. Single-family home prices in Florida have hit record highs, and demand remains strong, but condos, especially older ones near the shore, face challenges due to new inspection mandates and rising insurance costs. Consequently, condo prices may decline. Market performance varies regionally, with areas like Miami and Orlando thriving, while places affected by recent hurricanes, such as Fort Myers and Cape Coral, experience softer demand and price drops. (Data source: SunStats)
