Florida Housing Market 2023 Report
What’s the Florida Housing Market Like?
The fast growth of the Florida Real Estate market has slowed considerably in the past 6 months. The Fed’s aggressive monetary policies to curve inflation are having a direct impact on the Florida housing market as we see the decrease in month-over-month home prices and sales volume.
As of Sept 2022, the median price for a home in the state was $392,700, down 4.5% from the peak of $411,200 in May 2022. It is clear that the recent steep rise in mortgage rates has curved sales activity and shrunk affordability, and the result has been a drop in home prices.
Sales volume has also dropped considerably. In Sept 2022, there were 28,456 homes sold in the state of Florida, a 31% decrease from the previous month of Aug 2022, when we had 35,649 homes sold. Comparing year-over-year, we saw a 30.5% decrease in sales from Sept 2021, when there were 40,926 home sales.
The number of sales peak was 51,604 in March 2021; compared to Sept 2022’s numbers, we are down 44.9% in the number of homes sold from the peak of the last three years.
How Does The Florida Housing Market Compare to the National Housing Market?
The Florida housing market is similar to other markets because supply and demand drive housing prices. Florida is also impacted by mortgage rates as the rest of the nation.
Florida does have some advantages over other states. Known as “the sunshine state”, Florida attracts people from all over the country, even from other sunny Western states like California and Arizona. The state of Florida is so popular and in high demand that home prices in some areas of Florida have shot up 50% higher than the national average.
Florida’s home prices and sales numbers have begun to slow down along with the rest of the country. Differences in the regional economy of some of Florida’s metro areas make those markets more vulnerable and others more resilient to the current economics.
One significant distinction Florida is facing this year is the devastating impact of Hurricane Ian, which caused severe damage in the state's Southwest region. For the time being, the area impacted by the hurricane is facing an even more significant housing shortage.
Florida Metro Areas With the Hottest Housing Markets
The state of Florida has seen explosive growth in housing demand in recent years. In fact several regions of the Florida Golf Coast experienced 150-300% price growth compared to the national average. Tampa was named the hottest housing market by Zillow earlier this year, and several other cities have made the top 10 in publications such as Fortune and Wall Street Journal.
The top areas in the number of sales are:
- Palm Beach
- Daytona Beach
Tampa is located along Florida’s Gold Coast and is home to about 385,000 residents. Tampa is a major business center and is also well known for its cultural offering, such as museums and performing arts events. Tampa home prices have been doing quite well over the last few years; in fact, Tampa topped the list of cities that had the biggest increase in prices in 2021 with a 29.4% year-over-year increase. For 2022, September’s median price was $390,000, again up 19.2% over Sept 2021.
In Sept of 2022, there were 638 homes sold in Tampa, a 40.7% drop in sales from the same period in 2021.
The median days on the market is 22, which indicates a seller's market. Compared to Sept 2021, the median days on the market is twice as many in 2022.
Miami is currently a competitive seller’s market. In Sept 2022, there were 884 homes sold with a median price of $530,000. The median home price in Miami is up a whopping 24.5% from Sept of 2021, while the number of homes sold was down 35.2% compared to the same period.
The median days on the market is 55, and it’s up 27% compared to May 2022. This is a sign of the impact rates and home prices have on home buyers.
Orlando is a major tourist attraction and one of the most visited cities in the world. Home to Disney World and the Universal Orlando resort, among other major attractions. Orlando is also one of the busiest cities for business conferences and conventions thanks to the Orange County Convention Center, the 2nd largest of its kind in the nation.
Orlando is considered a competitive/hot market right now. In Sept 2022, there were 819 homes sold with a median price of $362,600. The median price in Orlando was up 15.8% over Sept of 2021, while the number of homes sold was down 37.8% compared to the same period.
The median number of days on the market for Sept was 20 days which is 150% higher than in May of 2022. The Orlando market went from sizzling hot to just hot.
Palm Beach is a wealthy community on the coast of Florida known for its glitzy estates and spectacular beaches. The area is considered a hot seller’s market.
There were only 15 homes sold in Sept 2022, with a median price of $1,750,000. The median price in Palm Beach was up 137.3% from Sept 2021, while the number of homes sold was down 53% compared to the same period.
The median days on the market is 25 days, nearly half the number of days from Sept 2022. These stats are a clear indicator of how hot the market is in Palm Beach. While practically every other place in the nation is experiencing declining numbers, Tampa’s housing stats are looking relatively healthy.
Daytona Beach is the world’s most famous beach, known for hosting some of the largest motorsports events, most notably the Daytona 500, AKA “The Great American race.”
Daytona Beach is currently a balanced market; demand is competitive but not prohibitive. In Sept 2022, there were 171 homes sold with a median price of $250,000.
The median price in Daytona Beach is up 19% from Sept 2021, while the number of homes sold was down 18.6% compared to the same period. The median days on the market is 44, up 10 days compared to May 2022.
Higher Mortgage Rates Could Slow Price Growth in Florida
How will interest rates affect the housing market? We are already experiencing the impact of rising interest rates across the nation. Price growth in Florida has been flattening or on a slight decline for several months in 2022. However, Florida is such a high-demand destination that it may very well fare better than the rest of the country.
As of mid-October 2022, the 30-year fixed rate mortgage is above 7% on average. That represents a 133% increase in mortgage rates in less than nine months. The Feds are on a “no holds barred” approach to curve inflation, and interest rate hikes have become the norm over the last several Fed meetings. Unfortunately, it seems that rate hikes are not done.. We anticipate at least another 2 or 3 rate increases before the year ends.
Key Market Stats for the Florida Housing Market:
As of the latest compiled housing report with data through Sept 2022.
- Median home price $392,700 - 15.1% up from 2021
- Existing home sales: 28,456 - a 30.5% drop from 2021
- Months supply of inventory: 3 - up 200% from 2021
- Mortgage rates as of Oct 13th are at 7.2%
Florida Historic price changes & affordability
The Florida housing market has seen explosive appreciation for years. The last 3 years have been particularly favorable to homeowners as they saw their homes appreciate by 53% in 36 months.
The steep rise in home prices and mortgage rates has shrunk affordability to record lows in the state. A 53% spike in home prices and an equally sharp increase in mortgage rates in the last 12 months does not spell good news for the Florida Real Estate market.
We know that the average person’s wages do not increase by 53% in three years, so we can see why affordability is a problem. The gap between rising home prices and wages keep getting wider.
The Bottom Line: Appraised Value Vs. Market Value
- The bottom line while discussing appraised value vs. market value is that both values have their importance. Both values are correct in their domain. The difference between the market value and the appraised value is due to their usage. Knowing this difference can help you to ask the right questions and focus on the correct data.
- The market value of a home is the value a buyer is willing to pay. It is the value the market believes your property is worth. It is important because the buyer will not pay more than this amount. On the other hand, the appraisal value is an amount chosen by a skilled appraiser to assist the lender. The sole purpose of the appraised value is to protect the lender from exceeding the loan.
- Meanwhile, the assessed value is what the government determines your property is worth for taxation purposes. Therefore, no one will be buying or selling at that price. Moreover, this price is according to a formula and neglects many of the unique features of a home. Therefore, you can often apply for a review on this value to reduce your taxes. If you have any questions, feel free to contact us now.