The Florida property market began 2022 as it had ended 2021 with more sales and ever-increasing house prices. As a result, analysts predict another busy year, although with the caveat of a slight slowdown in the face of higher mortgage rates.
More price hikes for Florida real estate
Buyers received no joy in terms of house prices in Florida in January. Instead, all types of properties saw double-digit hikes in the year. Single-family homes went up by 23% in 12 months to reach an average of US$375,000.
Prices for condos in Florida increased by a similar amount (23.9%) and stood at a median of US$285,000.
“2022 began with market conditions similar to what we saw over the previous months, including high buyer demand,” said Florida Realtors President Christina Pappas. She pointed out the pressure the conditions are placing on home prices.
More sales in January
Despite the ever-increasing house prices, the latest statistics for the Florida property market reveal no change in the hectic pace of activity. In the first month of the year, sales increased for all property types. Single-family homes saw a rise of 1.4% in sales, while condos went up by 6.7%.
The pace of transactions also continued to be brisk. In January this year, it took just 14 days for single-family home properties to go to contract, down from 21 days a year ago. Condos and townhouses experienced an even higher drop and it took an average of 16 days to sign compared to 39 in January 2021. “When homes are available for sale, they’re going under contract very quickly,” said Pappas.
Dwindling supply
One of Florida real estate’s main problems lies in the rock-bottom inventory levels. In January, the supply of single-family homes stood at just one month. That for condo properties was scarcely any better (1.2 months).
The shortfall in supply coupled with continued solid demand puts pressure on house prices and explains why properties continue to post double-digit hikes. Moreover, there’s no sign of an influx of new inventory over the next few months.
Mortgage rate increases could slow down market
Analysts are watching mortgage interest rates closely to monitor whether the recent rises will temper activity on the market. The average interest rate for home loans stood at 3.45% in January, up from 2.74% a year earlier.
Although less than 1%, the difference has a considerable impact on monthly repayments, which could put some would-be homebuyers out of the market. They may, in turn, be forced to remain in rental properties where rents are also rising. A recent survey found that rents for single-family homes in the US increased by 11.5% in the year to last November.
(Source: Florida Realtors)
