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)
