Florida condos get off to a good start in 2023

Florida condos get off to a good start in 2023

Despite a general slowdown in the US property market, Florida condos have had a flying start to the year. Metros in South Florida are proving to be particularly popular with buyers. As a result, condo prices have risen significantly. As Florida Realtors report, this uptick is “good news for sellers”. 

Price rises for Florida condos 

According to the National Association of Realtors (NAR), the average condo in the US cost US$331,000 in 2022. This price is marginally lower than a single-family home, with a median value of US$348,079 last year. 

However, prices for apartments and townhouses are on the rise, particularly in Florida. This type of property cost an average of US$306,500 at the end of 2022, up 21.6% in the year. Over the last decade, Florida condos have shown stellar capital appreciation, rising almost 190% since 2012, when they cost an average of US$106,620. 

Florida metros with the highest increases 

Certain areas of the Sunshine State have seen even higher price rises over the last year. The Miami metro is one example, with condo prices moving from US$269,000 in Q3 2021 to US$315,000 a year later. The rise equals 17% in 12 months. 

Southwest Florida metros also experienced strong capital appreciation. In the Tampa-St Petersburg-Clearwater metro, condo prices soared by 28.9% in the year to December 2022. In Cape Coral, apartments and townhouses saw a similar leap (27.7%), taking the average price to US$325,000. In nearby North Port-Sarasota-Bradenton, condos rose by 25% in value. 

Condo sales slow slightly 

However, when it comes to transactions, the market is less busy. The sales rate for both single-family homes and condos in properties fell in January compared to 12 months earlier. The slowdown reflects both the rise in interest rates for mortgage loans and the tight inventory levels, still present across most of Florida. 

The appeal of owning a condo 

Many couples and young families prefer to buy a condo rather than a detached home, principally because of the lower associated costs. According to the NAR, the average monthly mortgage for a condo comes in at US$1,100, considerably lower than a loan for a single-family home. 

In addition, buyers benefit from communal amenities such as swimming pools, play parks, fitness centres and gardens. Residents can enjoy use of all of them without having to manage the upkeep. 

For investors, Florida condos make a compelling choice because of their capital appreciation potential and steady annual income from rental. Capital gains in Florida were particularly impressive during 2022, when some sellers stood to make a return of over 85% on their investment

Buy-to-lets in Florida have also consolidated their returns. Monthly rental rates have experienced a steady upward trend since 2020 and analysts believe rents in Florida will continue to rise. Both condos and single-family homes provide solid returns. For example, they should reach 12% this year in Charlotte County in Southwest Florida. 

(Source: National Association of Realtors)