What’s new in the Florida property market?

What’s new in the Florida property market?

Over the last year, the Florida property market has increasingly shown the effects of higher interest rates. Resale property transactions have dropped in annual terms, pushing inventory levels slightly higher. However, prices continue to rise, and new-home sales have experienced a sharp uptick.

Resale transactions down but new-home sales up

According to the latest data from Florida Realtors, sales of single-family homes dropped by 15% in the year to March. Those for apartments and townhouses saw a 23.5% decrease in 12 months.

In quarterly terms, single-family home and apartment sales fell by 22% and 30.5%, respectively, compared to Q1 2022. However, as Florida Realtors Chief Economist, Brad O’Connor, pointed out, sales of both types of property improved in March over January and February.

However, the new home market told a different story. Sales soared by 9.6% in March across the country, driven by the lack of inventory in other property sectors. “A lack of resale inventory combined with many builders offering price incentives helped to push new home sales higher in March,” says Alicia Huey, chairman of the National Association of Home Builders (NAHB).

Florida property market has more supply

Would-be buyers received some good news in March when inventory levels in Florida rose slightly. The supply of single-family homes stood at 2.7 months, while levels for apartments and townhouses reached 3.4 months. However, both remain considerably below the 6-month metric that indicates a balanced market.

In addition, demand remains strong. “Florida continues to be a hot spot for residential purchases by buyers from both in-state and out-of-state,” said O’Connor. “However, inventory remains well below pre-pandemic levels in most Florida market areas.”

New-home supply fell by 9.5% in March but continues to run considerably ahead of resale properties with 7.6 months of inventory available. The 70,000 homes available in March account for just 16% of all property for sale in the US.

Property prices still rising

Despite the slowdown in sales, real estate values in Florida continue to rise. In March, the median price for a single-family home reached US$405,000, up 2.1% in 12 months. The uptick for condo properties was slightly higher (3.9%), taking the average value to US$320,000.

Quarterly rises were somewhat higher. Single-family homes went up by 3.9%, while apartments and townhouses saw a 7.3% increase.

Pockets of higher rises

Some parts of Florida have experienced even higher price rises over the last year, particularly for apartments and townhouses. Southwest Florida saw the biggest upticks, with prices in metros such as Tampa soaring by 28.9%. In North Port-Sarasota-Bradenton, condo properties prices leapt by 25%.

(Source: Florida Realtors)