When it comes to the housing market, get context.

There are a lot of eyes on Florida's housing market.

That happens when you're one of the largest markets in the country and have experienced significant growth over the past 5 years.

After a blowout performance from 2020 to 2023, however, the real estate market in Florida has been a crowd favorite when it comes to predicting the next crash.

Everyone loves to cheer for the favorite to go down..

This makes sense considering inventory of homes for sale has increased significantly since 2022 as mortgage rates increased from 3% to 7%.

On top of that, home sales have fallen off in recent years - down 30% from the peak in 2021. 

With all of that change, the Florida housing market has remained resilient when it comes to prices.

To see the full picture and think accurately about the market, we need to get context..

Comparing Florida median home prices - October 2024

Let's start by getting context by looking at where real estate prices are across the metro areas of Florida:

For reference, the median home price in Florida is currently $383,000.

I've color-coded the map to show which areas are below this (green) and which are above (red). 

15 of the 22 (68%) metro areas have home values below the state's median price.

This includes metros like Jacksonville, Tampa, Daytona Beach, Punta Gorda, Melbourne, and others.

That leaves 7 (32%) metros coming in above the line in Florida. 

All in all, the Northern half of the state is generally more affordable than South Florida.

But let's look outside Florida at U.S. real estate prices

This graphic shows the same prices, but I've changed the coloring.

The median home price in the U.S. is $420,000. 

If you're keeping track, that's 10% more than in Florida.

Now, the colors reflect which areas are above and below the national average home value.

In this case, 19 metro areas are below the U.S. median price.

Places like Jacksonville, Orlando, Tampa, Port St. Lucie, Cape Coral, and Destin are all generally more affordable than the national average.

Only Miami, Naples, and North Port metros are more expensive than the national average.

Finding Opportunity: Florida Housing Market

I know we touched on this last month, but it bears repeating: Florida real estate is still relatively affordable compared to much of the United States.

Because of the favorable climate, below-average home prices, retirement boom that will unfold over the coming years, and strong economic growth in Florida, I expect we'll continue to see strength in the Florida real estate market going forward.

And yes, there are challenges with rising homeowners insurance costs, surprise jumps in condo association fees, and the recent increase in the housing supply.

These are factors to be mindful of and consult your Realtor about. 

Certain segments of the market will be more impacted by those challenges than others. 

Remember, new homes have fewer insurance challenges, not all condos are seeing spikes in association fees, and some markets are experiencing more of an increase in housing inventory than others.

We have to stop thinking in absolutes, black or white, 1 or 0.

The market isn't all or nothing. 

We should be strategic and recognize what's a smart buy and what's a risky move.

At a basic level, for anyone concerned about property values extending beyond what's reasonable and a major decline or downturn in real estate, I suggest this: target the areas on the maps above in green. 

Then, consult an expert real estate agent to help you fine tune your decision to limit the downside risk while benefiting from the steady growth in the Sunshine state.

Dr. Alex Stewart
Founder

Still have questions? Here's some of the frequently asked questions and answers:

Q: What is the current state of the Florida housing market in 2024?

A: The Florida housing market in 2024 is experiencing a complex dynamic, with home prices still relatively high but showing signs of stabilization. Analysts note that while certain areas have seen an influx of buyers, the overall market faces challenges due to high mortgage rates and growing housing supply.

Q: What factors are contributing to the housing demand in Florida?

A: The housing demand in Florida is driven by an influx of new residents, including buyers and investors looking for affordable housing options. Additionally, the demographic shifts and remote work trends post-pandemic have increased interest in single-family homes across cities like Tampa and Orlando.

Q: Are there any signs of price drops in the Florida housing market?

A: Yes, certain listings are experiencing price drops as sellers adjust to the slower pace of the market. There are areas where home prices are dropping to attract buyers, especially in the wake of high insurance premiums and mortgage rates. Remember, price cuts on active listings don't necessarily mean that home prices are declining overall. Instead, it is most likely home sellers who listed their property above the market and are adjusting to be in-line with market demand.

Q: What impact has Hurricane Helene had on the Florida housing market?

A: Hurricane Helene has primarily impacted the communities directly hit by the hurricane. We have yet to see the changes to homeowners insurance as that will be delayed as homeowners renew their policies. Our research shows that while there might be a short-term dip in home prices compared to the rest of the state, real estate values typically recover within 2 years and hurricanes can actually create buying opportunities.

Q: Are there still affordable housing options for homebuyers in Florida?

A: While affordable housing options are becoming scarcer in sought after areas of major cities, there are still opportunities for homebuyers, particularly in less saturated markets. Buyers should explore listings in certain areas that may offer better affordability compared to major cities like Miami. There's plenty of affordable housing in Florida, the question is if buyers are willing to buy it.

Q: What are the predictions for the Florida housing market in 2025?

A: Predictions for the Florida housing market in 2025 suggest that if current trends continue, home prices may see modest increases. Watching population growth, housing inventory, and economic growth in your area will be crucial for gauging how hot or cold a local real estate market will be.

Q: How do high mortgage rates affect Florida homebuyers?

A: High mortgage rates are a moderately significant factor impacting younger Florida homebuyers, as they can limit affordability and reduce the number of homes buyers can consider. Cash sales are driven by retirees and investors. 1-in-3 transactions in Florida are cash sales. This helps reduce the overall impact of higher mortgage rates.

Q: What should investors consider when looking at the Florida housing market?

A: Investors should consider the current housing supply and demand dynamics, as well as the potential risks associated with high insurance premiums and mortgage rates. Identifying emerging markets and neighborhoods could provide better investment opportunities.