Florida Real Estate Forecast Next 5 Years: Will it Crash? The Florida housing market has continued to face challenges caused by rising mortgage rates, resulting in a decline in both single-family and townhouse/condo closed sales. Despite the challenges, the market has seen a significant increase in end-of-month inventory levels for both categories, albeit still short of pre-pandemic levels. In this article, we will take a closer look at the current trends and what they mean for the Florida housing market.
Closed Sales
According to the recent report by Florida Realtors, single-family home sales in January 2023 were down by 32.5% compared to the same period in the previous year, a trend that has persisted for several months. The decline in townhouse/condo sales was even steeper, at nearly 41%. While this is not unexpected given the high mortgage rates, it has resulted in a significant drop in buyer demand.
New Listings
The level of new listings for single-family homes for sale has been below normal, with a decline of about 5% compared to a year ago. This trend is partly due to the high mortgage rates, which are discouraging some potential sellers from listing their homes. In contrast, new listings for townhouse/condos were down by 2.4% compared to the same period in the previous year.
Inventory Levels
At the end of January, the number of single-family homes listed for sale was more than double what it was a year ago, with an increase of over 134%. The inventory levels for townhouse/condos were up 90% on a year-over-year basis. However, these levels are still short of pre-pandemic levels, and in most parts of Florida, we were considered to have an inventory shortage even before the pandemic.
Median Sale Price
The shift in the ratio of active buyers to active sellers has resulted in a deceleration of overall home price growth, but not a full reversal. The median sale price for closed existing single-family home sales in January 2023 came in at nearly $390,000, which is still 4% higher than last January’s median price. The median price for townhouse/condos grew by almost 9%, up to $310,000.
The above report shows that despite the challenges posed by rising mortgage rates, the Florida housing market continues to remain resilient. While the decline in sales and new listings is not surprising, the increase in end-of-month inventory levels offers a glimmer of hope. As we move further into 2023, it will be interesting to see how the market continues to evolve and how it responds to the changing economic landscape.
