Florida property market slows slightly in April

Florida property market slows slightly in April

On the back of rising mortgage rates and continued tight supply, the Florida property market slowed slightly last month. However, median prices continued to grow by double-digits across the state and the time taken to contract dropped still further.

Sales slow but prices rise

According to the latest figures from Florida Realtors, in April, single-family home transactions fell by 15.3% compared to the same month in 2021. The decrease was even higher for condos and townhouses, and sales dropped by 20.9%.

However, median prices continued their upward trend with double-digit upticks for all types of property in Florida. Single-family homes saw a 21.8% increase in value, taking the median price to US$410,000, while condos went up by 24% to reach an average of US$310,000.

Price hikes were even higher in many metros. Tampa real estate experienced a considerable rise, with single-family home properties increasing by 29%. Prices in this metro area have tripled in the last 20 years. In Sarasota, condos went up by 36.7% in 12 months.

Demand remains high

Despite the sharp rises in prices, buyers continue to flock to the Florida property market. In April, the time taken to contract for a single-family home was just 8 days, compared to 11 a year earlier. Condos were similarly quick to sell, with an average of 10 days to contract, down from 24 in April 2021.

Analysts attribute this demand to Florida’s appeal to a broad range of buyers. “Our lack of state income tax, beautiful beaches and warm sunny weather continue to attract new residents, investors and second-home buyers, especially in the work-from-anywhere world today,” said Christina Pappas, Florida Realtors President.

But supply still sits at rock-bottom levels

Inventory availability continues to be a significant obstacle facing buyers in Florida and supply levels remain very low. For example, in April, the market had just 1.1 month’s supply of single-family homes, well below the 6-month level considered to represent a balance.

For condos and townhouses, the situation was hardly better. Inventory levels for this property type stood at a mere 1.3 months.

The outlook for the Florida property market

Although demand remains high in the market, several factors indicate a slowdown over the next few months. They include interest rates that have risen considerably over the last few months in the US, putting the brakes on mortgage applications.

As a result, analysts believe the market will register slower growth this year. “2021 was characterised by near-record-low mortgage rates that allowed for a huge surge in homebuying demand,” said Brad O’Connor, Chief Economist at Florida Realtors. He pointed out that closed sales in Florida are now at pre-pandemic levels “despite higher mortgage rates, low supply and much, much higher sale prices.”

(Source: Florida Realtors)