Florida real estate market shows signs of shift

Florida real estate market shows signs of shift

The latest housing data reveals that although property prices continue to rise, the Florida real estate market is showing signs of a shift in trends. In particular, supply levels are rising and time to contract slowing, both of which are good news to buyers in the state.

Property prices continue upwards

Despite higher mortgage interest rates and a slight uptick in inventory, Florida property prices remain on their steady upward trajectory. Single-family homes cost a median of US$407,000 in August, a 15% increase in the year.

Figures from Florida Realtors also showed that condo and townhouse properties experienced an even higher price hike. They reached a median of US$305,000, which translates to 20.8% more than in August 2021.

Sales less buoyant but inventory growing

The Florida real estate market has been shackled by lack of supply for the last three years and as a result, the Sunshine State has seen fewer sales. In August this year, single-family home transactions fell by 15.8% in the year and apartment sales dropped by 20.3%.

Inventory levels have, however, seen a slight shift in trend. The supply of single-family homes stood at 2.4 months, up from 1.3 months a year ago. Condo properties in Florida had a 2.2 months’ supply compared to 1.7 months in August last year.

Less pressure for homebuyers

“The much-needed gains in active inventory will hopefully ease the pressure of rising home prices for buyers,” said Christina Pappas, President of Florida Realtors.

Nonetheless, active listings remain well below the levels seen in 2019, before the pandemic. As a result, Chief Economist Brad O’Connor cautioned that inventory growth “has slowed considerably”. He believes that the 4% rise in August compared to 17% in July could be down to the aversion among some homeowners of “listing in this uncertain economic environment”.

Time to contract still short

However, despite shifts in inventory and rising prices, one constant remains on the Florida real estate market. The time to contract continues to be brisk with buyers quick off the mark.

In August, it took an average of just 17 days for condo properties to go to contract, just 2 days shorter than 12 months earlier. Single-family homes went under contract in 16 days, slightly more than the 9 days registered last year, but the purchase process was still extremely quick.

New homes prices and supply also rise

For their part, the US Department of Housing released data for the new-home market in August. It showed that inventory for new single-family properties stood at 8.1 months’ supply and that median prices had risen by 8.2% to reach US$436,800.

(Source: Florida Realtors, US Department of Housing)