Learn more about the housing market in Florida

Every state is unique when it comes to the real estate market. That’s why it’s critical to understand the market you live or operate in. Whether you’re renting, buying, or selling, it will impact many aspects of your life. The housing market Florida is currently boasting is somewhat nuanced, so continue to do research on the area you’re looking into and do so diligently.  

Florida Housing Market Overview 

The Sunshine State is known for its beautiful weather and popular tourist attractions like Disney World, Universal Studios, and the Everglades National Park. Both retirees and spring breakers alike frequent Florida’s shores, as do young professionals to Tampa or glitzy businessmen to Miami. There is no limit to Florida’s appeal, but is it equally appealing to purchase a home there in 2024? 

Florida used to be known for its affordability and favorable tax laws—combine those traits with beaches and a warm climate and you have people fleeing other, colder states for Florida when the pandemic freed 9-5ers from their offices. This sudden surge of buyers triggered new construction that has seemed to continue to today. However, no longer does Florida have the flood of new buyers that the pandemic brought, and the Florida housing market is being somewhat cooled by an excess of inventory in some zip codes. While this may sound good for buyers, keep in mind that the most recent new inventory is due in part to renovations and rebuilding projects necessary after the devastation of Hurricane Ian, which caused an estimated $112.9 billion in total damage. Most Florida zip codes still have inventory levels below their pre-pandemic 2019 numbers sustaining high prices and a difficult market for middle-class homebuyers.  

Florida has not seen a decrease in home prices, despite new inventory numbers in certain areas of the state. In fact, cities like Tampa have seen price increases of nearly 70% since 2019. Sky-high pricing is due in part to unprecedented insurance costs and mortgage rates.  

Insurance prices in Florida have made some long-time Floridians vacate the state for areas that are not in the line of as many natural disasters. A recent Redfin survey found that homeowners have reported their insurance prices jumping by thousands of dollars, and that nearly 70% of people who have bought houses there saw a rise in insurance pricing. About 12% of Floridians have been completely dropped by their insurance company as of April 2024, as a few companies got rid of their service to Florida entirely.  

Coupled with rising mortgage and interest rates, Florida is no longer as affordable as it used to be. Prospective homebuyers may want to double check their savings before jumping into this market, as Florida home prices keep housing affordability as only a pipe dream for many American families.  

Florida Housing Market Trends 

To understand the Florida real estate market, it’s important to keep up with trends. Let’s look at some key ones in Florida: 

Note: These statistics are based on Redfin’s monthly housing data from May 2024. 

Median Home Price 

The median home price in Florida is currently $420,700, up 3.3% from last year. Some cities in Florida have risen as much as 17% in Miami-Dade County, marking a record-breaking $650,000 sale price for homes in that area. A Florida State professor told the Miami Herald that the higher market within some Florida towns like Miami is pushing the median price up and up while the rest of the market will decrease in price due to high interest rates.  

Homes Sold in April 2024 

In April, Florida saw 36,193 homes sold according to Redfin. For the first quarter of 2024, there were over 57,000 homes sold, marking an increase over last quarter. However, keep in mind that this number might be inflated compared to other months since nationally speaking, sales usually peak during the spring and summer months and slow in the winter. In fact, the National Association of Realtors (NAR) predicts that in February and March alone, sales activity increases by as much as 34% and prices by 3%. 

Median Days on Market (DOM) 

Days on market (DOM) is a measure of the average length of time a home remains listed on the market before being put under contract. A lower DOM signals a highly competitive seller’s market with more pressure on buyers to make higher offers and remove contingencies. A higher DOM signals a buyer’s market as sales are slower and sellers have less leverage. 

The current median days on market (DOM) in Florida is 53 days. This is one of the highest DOM rates in the country, only following Hawaii, Louisiana, New York City, South Carolina and South Dakota. In Cape Coral, FL, the average single-family home took 31 more days to sell than the previous year, making the biggest jump of any city in the nation.  

What’s a leading cause of this stagnation in DOM rates? New construction.  

New Supply Statistics 

The housing market after the great pandemic migration to Florida has finally plateaued, in part due to new construction rates.  

Florida has the highest rate of new construction permits in the nation. When people began working remotely, Florida was known for its affordability and beautiful weather, so those untethered by an in-person job fled to the state. This increase in demand led to more new construction permits being issued.  

However, now that Florida has become increasingly unaffordable due to a combination of rising home prices, interest rates and insurance premiums, people are leaving the area in favor of states like Tennessee and North Carolina, states with a lower cost of living and low/no income tax.  

Although there are still more people moving to Florida rather than immigrating out, the rates of emigration have increased over the past year. Those new construction properties from 2020 have now hit the market, leading to the staggering 38.4% increase of homes for sale in May 2024, climbing to almost 199,000 homes on the market.  

It’s important to note that some of these new construction permits could have been issued due to rebuilding and renovating efforts following Hurricane Ian. Various organizations like the Hurricane Ian Rebuild Housing Repair and Replacement Program have launched, using federal funding to help families rebuild from the devastation Ian caused. Most planned construction efforts like renovations or rebuilding projects need a permit, so this could have impacted the high level of permit issuing rates.  

Property Tax Rate 

The average property tax rate in Florida is 0.91% according to Rocket Mortgage. The average effective property tax rate for the United States is 1.10%, so Florida is relatively below the median.  

Florida also is one of the seven states that does not collect personal income tax, and Florida citizens can benefit from no state tax on Social Security as well as other convenient tax benefits. However, though the tax rates are lower, certain costs associated with living in Florida like insurance premiums and heightening home prices can offset what little you pay in property tax. 

Foreclosure Rate in Q1 of 2024 

Per ATTOM, there was one foreclosure for every 973 Florida housing units in the first quarter of 2024. Florida ranks number five for the highest rate of foreclosures in the nation, marking a 23.78% increase over the first quarter of 2023.  

There has been an increase in home repossession filings across the country, but Orlando and Miami in particular have seen as many as one in every 1,938 housing units being foreclosed upon in February of 2024, ranking highly in foreclosures for areas with populations above 1 million people.  

In Florida, there were 2,732 homes that began the foreclosure process. Realtor.com figures that since foreclosure moratoriums have expired (along with their numerous extensions), homes that would have been foreclosed upon without this government assistance are now experiencing those filings, spiking that number to new highs.  

Hottest Local Markets in Florida 

1. Winter Park

Winter Park’s housing market is on the rise with an average median home price of $800,000, marking an increase of 16.1% compared to May of 2023.  

Redfin says Winter Park’s market is somewhat competitive. Homes typically sell around 21 days, and some can sell below the list price. However, this signifies a rare opportunity for buyers—in the current market, many homes sell above list price and at a breakneck pace. In Winter Park, although home prices have spiked, buyers may have more options than is typical for the current market.  

2. Orlando

Home to Disney World and SeaWorld, Orlando seems like the perfect tourist destination. But what is the housing market like for those who want to live there full-time?  

Redfin says Orlando is somewhat competitive, and some homes get multiple offers. The hottest homes can go pending in around eight days and will on average sell about 2% below list price.  

However, Orlando home prices are up 8.7% compared to May of last year, selling at a median price of $407k. This market is slowing compared to its 18-day DOM last year, but Orlando still is an area for buyers to keep an eye on. There were 556 homes sold here in May alone.  

3. Coral Gables 

Coral Gables is one of Florida’s most expensive zip codes, with homes selling for a whopping average of $1,350,000. This median home price is around 23% higher than last year. The New York Post claims that Florida’s influx of pandemic-era movers boosted Coral Gables above ritzy Manhattan listings that once held the number one spot. The elite gated Gables Estates homes sell for an average of $21 million. In fact, Florida now has seven of the ten most expensive United States neighborhoods according to Bloomberg. 

While the median DOM in Coral Gables is slower than most at 57 days, this signifies a quicker clip than last year, where Coral Gables homes were going pending at around 70 days.  

Multiple offers on one home in this area are rare. The hottest homes in this market can go pending in 29 days.  

Economic Factors Impacting the Florida Housing Market 

A holistic view of Florida’s housing market requires a basic understanding of the main economic drivers affecting the market. Let’s look at a few critical ones below: 

Mortgage Rates 

As of June 24, 2024, Florida interest rates are 7.02% for a 30-year fixed mortgage. Mortgage rates in Florida are expected to stay lofty for the foreseeable future, according to Bankrate. High mortgage rates keep homeownership unattainable for many American families.  

First-time homebuyers may be eligible for certain affordable mortgage and down payment assistance. If you think you qualify, research programs like Florida Assist, the Florida Homeownership Loan Program, and HFA Preferred Grants.  

Inflation and Cost of Living 

Inflation in Florida reached 3.9% in March 2024. Governor Ron DeSantis blames rising interest rates for Florida’s inflation and promises further inflation-easing measures to come.  

Florida’s previously low cost of living and warmer weather was attractive for buyers, but its quickly increasing population has driven up housing prices, along with other expenses like groceries. This trend is congruent with the past few years of rising Florida inflation rates according to the United States Congress Joint Economic Committee. On average, a Florida family will spend about $1,203/month more than they would have in January 2021. Florida now ranks 8th in the nation for increased monthly inflation costs.  

Population Changes and Demographics 

Florida has seen over 1 million net new residents over the past few years, and they expect to welcome as many as 275,000 more in 2024.  

Nationwide migration rates hover around 1.5%, but Florida’s inbound rates are increasing by an average of 3.7% while their outbound rates are staying stable. More people are moving to Florida than moving out, but the immigration rates are certainly slowing and fingers are pointing to decreasing affordability as the cause.  

Other Factors for Florida: Insurance 

There is an insurance crisis in Florida, delaying home buying and slowing the entire housing market in the state. 

An April 2024 Redfin survey found that 70% of Florida homebuyers have seen a rise in their insurance costs or have experienced a change in coverage, if they weren’t apart of the 12% of homeowners who were dropped completely by their insurance company.  

Of those who lost coverage, a third have expressed plans to vacate the state. The residents in states like Florida and California are no stranger to the necessity of home insurance, since those areas have a higher than average risk of natural disasters. However, many insurance companies have stopped offering coverage to homeowners there. Florida in particular has been dropped by over 30 insurance providers in the past few years.  

For those who can find coverage, their premiums have been increased. While Florida has always been a risky market for insurers due to its natural disasters, things like insurance fraud have further exacerbated the issue. In fact, while Florida makes up only 9% of the insurance claims in the nation, it represents 79% of the United States’s home insurance lawsuits, many of which are fraudulent.  

What does this mean for Florida? In the nation, about 6.2% of people site rising insurance costs as the reason for them to relocate. In Florida, the percentage of survey respondents citing this as their primary relocation reason is almost double at 11.9%. However, while there has been an increase in people leaving the Sunshine State for more favorable insurance rates compared to earlier years, people are still moving into Florida at a steady clip.  

Florida Housing Market Predictions 2024 

Florida has seen an increase in new listings and median sale prices for the first quarter of 2024, signaling a healthy market despite mortgage rates that exceed 6%.  

As with most U.S. states, current homeowners are grappling with the idea of putting their home on the market for fear of a higher mortgage rate than they currently have. This trend is evidenced by Florida’s 10.4% decrease in closed sales of single-family homes in March 2024, and new listings were down about 17%. Florida Realtors note that this slowdown is typical for end of February to March, and buyers should expect to see the rate increase in the coming months.  

If house prices and mortgage rates continue to rise, buyer demand may wane and so too will median sale prices. Florida housing predictions 2024 note that for the coming months, prices may not decrease, but there is a chance for them to do so before the year closes out. For now, affordable houses are hard to come by, and if they do come around, they are quickly snatched up by a competitive market. This is expected to remain for as long as high rates do.  

Likelihood of Florida Housing Market Crash  

When will the housing market crash in Florida? Not anytime soon. Florida’s housing market remains healthy for now, though if interest rates remain high the market may suffer slightly. A healthy market is in part evidenced by many buyers who can purchase homes with payments that are less than 30% of their monthly income—this ideal is becoming less and less realistic for many Americans today, especially in Florida. 

Some characterize a healthy market by the months of supply. Usually, a market with six months of supply is considered balanced, with fewer months meaning that buyers are favored in the current market. Florida’s housing supply is up 2% from last year for four months of supply, which is not quite at that six-month mark, but is not far enough off to indicate a worrying shortage.  

Experts do not expect a housing crash anytime soon, though they advise prospective buyers to save as much money as possible and improve their credit to increase their ability to purchase in this market. Fannie Mae warns that home prices will continue to rise for a year-over-year prospective increase of 4.8% by the end of 2024, so remaining within your budget when looking to purchase a home may remain difficult. 

Forecast for The U.S. Housing Market 

Now that we’ve looked at Florida’s housing market, let’s zoom out a little bit. What about the U.S. housing market? What do you need to keep an eye on in the coming years? 

The United States’s current median existing-home sale price is around $384,500 per the National Association of Realtors. The inventory, though, remains low. A balanced market typically has a 5-to-6-month supply, but the current figure is 2.9. 

We’re currently in a seller’s market with buyers looking at continued rising house prices. The same trend can be seen with renters. Housing continues to appreciate, in general.  

Dr. Lawrence Yun, Chief Economist and Senior Vice President of Research, National Association of Realtors, believes the housing market will appreciate 15 to 25% over the next five years. He thinks that the seller’s market will continue because housing inventory will remain low. In five years, however, he predicts a more balanced market, in which neither party has a built-in advantage. Thus, the market will shift to a case-by-case basis to determine what kinds of deals people can get. 

Hybrid work also impacts the housing market. This shift in work culture means suburbia will continue to grow. States like Texas, the Carolinas, Tennessee, and Florida should see continual growth. 

The number of single-family homes built decreased over the past couple years while the number of multi-family homes increased due to lower prices and a demand for affordable housing. Higher mortgage rates and inflation (affecting price of materials) were the main causes.  

Lower income households continue to struggle in the current housing market. This trend appears likely to continue into the foreseeable future. Without enhanced supply or helpful subsidies, the outlook is that many Americans will still wrestle with housing affordability in the years to come.  

Florida Rental Market 

The rental and buying market are obviously closely linked. When home prices fall, landlords are more likely to buy properties to rent out. Home prices and rental prices are correlated as well because a hot market means prices rise.  

Rents were more unaffordable than ever in 2021 and 2022. In 2022, 22.4 million households paying rent said it was unaffordable, which is the highest that figure has ever been, according to a January report from the Joint Center for Housing Studies at Harvard University. The study found that half of all renters in the United States spent over 30% of their income on rent and utilities.  

The markets cooled in 2023, though, due to new units and decelerating demand. But a serious problem persists: Rent increases are still outpacing income gains.  

Moreover, high interest rates are keeping borrowing and transaction activity down. Over half the banks surveyed by the Federal Reserve reported that demand for multifamily loans decreased year-over-year. 

The pandemic caused a housing disparity that isn’t going away anytime soon. Unaffordable housing is a serious issue across America. Whether high rents or low income is the main cause doesn’t change the fact that this problem is widespread.  

This short summary leads directly into Florida’s current rental market, with key trends from Zillow:

Florida Rental Market Key Trends 

• Median Rent: $2,500 

• Month-Over-Month Change: $0 

• Year-Over-Year Change: -$100 

• Available Rentals: 77,921 

Conclusion 

Whether you’re looking to buy a home in Orlando or Miami, it’s important to keep an eye on interest and mortgage rates in that area within the housing market Florida provides and continue to do research on the state and its fluctuating housing market. Buying a home is no small feat, and with this market, it will take time and effort. However, Florida homes are not impossible to purchase, and your dream listing could be out there. Consult with a trusted real estate agent or professional within the real estate space if you want to learn more about the Florida housing market scene.