The rumors about Florida's housing market are hard to ignore, especially with recent fluctuations in inventory and median sales prices. Amidst these changes, one question is still echoing on social media: Is Florida still a lucrative place to invest in real estate? Let's go over the data to respond.
Snapshot of Florida's Housing Dynamics:
July 2023's data from Florida Realtors shed some light on the situation. The market shows signs of an uptick in inventory levels and stabilized price growth. With the flow of mortgage rates, Florida's housing market sees potential adjustments offering more opportunities for both buyers and sellers.
Specifically, for July:
Single-family home median price stands at $415K, with a 2.8 months’ supply.
The condo median price at $319K, with a 3.6 months’ supply.
The Mortgage Rate Factor in Florida's Real Estate:
Mortgage rates, have gone up to the 7% mark, and have introduced challenges but also opportunities. The 2023 Florida Realtors President, remarked on the improving inventory, although still short of a balanced market. The increase in active listings could potentially ease rising prices and tackle affordability issues.
A Peek at Sales & Price Trends:
July witnessed a slight dip in closed sales for both single-family homes (down by 6.4%) and condo-townhouses (down by 9.4%) year-over-year. Florida Realtors Chief Economist, Dr. Brad O’Connor, commented on the cooling pace of home price growth, attributing it partly to the summer's high mortgage rates.
Reading the Market's Pulse:
The significant rise in interest rates in 2022 led to decreased housing market activity. As 2023 unfolds, comparisons with the previous year may project a brighter picture. However, as O’Connor points out, the market isn't racing to recover.
Balancing Supply and Demand:
July's data for Florida's Real Estate indicates a supply of 2.8 months for single-family homes and 3.6 months for condo-townhouses.
Gazing into Florida's Real Estate Crystal Ball:
Florida's home values have surged by an impressive 80% over the past half-decade. Predictions for the next 5 years remain positive. The increasing mortgage rates will inevitably shape the market's trajectory, possibly curbing house price surges. Yet, the "fear of missing out" sentiment might still hit the market, although at a slower pace.
Zillow had crowned Tampa as 2022's top real estate market in the U.S. With cities like Miami and Tampa leading the charge, several factors contribute to Florida's real estate ascendancy, including demand-supply dynamics, robust property sales, and a thriving job market.
So what will happen with Florida's Real Estate market?
Florida's real estate market is poised for strength over the next five years. Sellers can rejoice with rising property values and limited competition. However, potential buyers might need to deal with higher mortgage rates and steeper home prices. The current market, with its rising prices and mortgage rates, indicates that potential buyers might want to exercise caution.
But here's the silver lining: even if the nation teeters on the brink of a recession, the housing market looks set for growth. Maybe not as meteoric as recent times, but growth nonetheless. This presents a golden opportunity for real estate investors, especially those with an eye on Florida. The Sunshine State still shines brightly for those keen to seize its real estate potential.
PRIVATE EQUITY SOLUTIONS (PES)
MIAMI | ORLANDO | SAN JUAN
Risk Disclaimer: Investing in private real estate funds and notes secured by real estate has certain inherent risks, which could result in the loss of some or all of your principal investment. Your decision to purchase and invest should be based on your own particular financial circumstances and investment objectives. Private Equity Solutions, LLC. Its officers and representatives can in no way guarantee or warrant your success. Consult your tax advisor or financial advisor before investing. Past performance does not guarantee future performance. Please see fund offering documents for full details & disclosure.