Are Home Prices Dropping in Florida? Review of the Florida Housing Market for Your Florida Home
Home prices decreased from January 1st 2023 to June 1st 2023 by $352.87. However, this change is relatively small. If we calculate the percentage change, we can get a better understanding of the magnitude of the decrease: The average home prices in Florida have decreased by approximately 0.0981% from January 1st, 2023, to June 1st, 2023. This decrease is relatively insignificant and indicates a relatively stable housing market during this period. Our team used AI and machine learning to process large data sets to determine what is true and not true as accurately as possible for 2023. Read one of our other data studies on the cheapest housing in Florida.
Florida Housing Market Overview
According to a 2023 report by Florida Realtors, the market has faced challenges due to rising mortgage rates, leading to a decline in both single-family and townhouse/condo closed sales. Despite these challenges, the market has seen a significant increase in end-of-month inventory levels for both categories, although still short of pre-pandemic levels. The median sale price for closed existing single-family home sales in May 2023 was nearly $358,351.20, which is still 2.7% % higher than last May’s median price of $348,933.85.
Florida home values have risen by 72.9% over the past 5 years however a positive trend is not likely for the next 5 years. The recent spike in mortgage payments due to rising interest rates may restrict house price increases. Although the desire to buy a house is strong that does not mean people are able to buy a house. Especially as credit card debt and personal expenditures have risen dramatically.
If you’re a seller, this is wonderful news since it implies property values are holding steady and there isn’t much selling competition. However, higher mortgage rates may cause unprepared house buyers to postpone their purchases. If this reduces buyer demand sufficiently in some Florida areas, price appreciation may decrease. This lower price increase may provide remaining buyers who can afford higher interest rates more confidence in locating a home they can afford. Meaning the environment could shift from a sellers environment to a buyers environment where buyers have the advantage to negotiate lower prices.
Will the Home Price in the Florida Housing Market Continue to Go Down in the State of FL?
It is likely that home prices in the Florida housing market will continue to go down especially as inflation falls and if interest rates stay steady or go higher. Take a look at this graph of the real estate costs in Florida without being adjusted for inflation and being adjusted for inflation:
If you look at 2012 you see that real estate costs actually decreased below the true adjusted for inflation value because of deflation. Currently we are on a fast train steaming head first into a deflationary economy which means all of the perceived equity in people’s homes due to inflation will disappear as inflation goes down. If we head into a deflationary environment you could expect home prices to dip below the true adjusted for inflation value.
The trend in Florida’s housing market has been slightly fluctuating, with the all-transactions house price index for Q1 2023 standing at 766.75, compared to Q4 2022’s 766.60, and Q1 2022’s 678.13. These numbers suggest a general trend of rising house prices over the past year, with some mild fluctuations between quarters. However, it’s crucial to consider other economic indicators that can influence housing market trends when the economy explained by these other money experts and their advertisement story.
The inflation rate and federal funds rate, which affect the cost of borrowing, stand at 4.0% and 5.06% respectively. These factors can potentially deter homebuyers, leading to a decrease in demand and subsequent drop in home prices. The GDP deflator, another measure of inflation, shows a percentage change of +4.1% from the preceding quarter, indicating an overall increase in the prices of goods and services. Consumer credit card debt is also at a significant level of $991.37 billion, which could impact personal financial stability and affect the decision to invest in property.
Personal expenditure, a measure of consumer spending, has been steadily increasing from $17,736.5 billion in December 2022 to $18,267.7 billion in April 2023. This trend might suggest that consumers are still confident about their economic prospects, potentially maintaining demand for homes. However, the interplay of these economic factors can make future housing market trends unpredictable for homes townhouses.
Examining Florida’s housing price data, we see a slight decrease from the third quarter of 2022 to the fourth quarter, followed by a slight increase in the first quarter of 2023. This indicates a level of Florida markets fluctuation rather than a clear downward trend in housing prices1.
Several factors can influence this trend. Notably, the inflation rate in the U.S. has seen a significant increase, reaching 8.00280% in 2022, up from 4.69786% in 20212. This rise in inflation, coupled with the steady increase in federal interest rates, which stood at 5.06% in May 20233, could put downward pressure on real estate costs as borrowing becomes more expensive. Furthermore, consumer credit card debt as of June 7, 2023, was 991.37464, suggesting that personal debt levels could potentially affect individuals’ ability to purchase homes. However, it’s also important to note that personal income and savings have both seen an increase from December 2022 to April 2023, which could offset some of these pressures.
Here is an overview of the economic situation in the United States as of June 2023:
- House Price Index for Florida: The House Price Index for Q1 2023 was 766.75, which shows a slight decline from Q3 2022 when the index was 767.011.
- Inflation: The inflation rate for 2022 was 8.00280 percent, a significant increase from 1.23358 percent in 2020 and 4.69786 percent in 20212.
- Federal Funds Rate: As of May 2023, the federal funds rate was 5.06 percent, an increase from 4.33 percent in January 20233.
- Consumer Loans: The value of consumer loans, including credit cards and other revolving plans, was 991.3746 billion dollars as of June 7, 20234.
- Personal Income: Personal income in April 2023 was 22,639.1 billion dollars, showing a steady increase from 22,281.9 billion dollars in December 20225.
- Personal Saving: The amount of personal savings in April 2023 was 802.1 billion dollars, compared to 702.3 billion dollars in December 2022, indicating an increasing trend6.
- Housing Inventory: The active listing count for housing supply in May 2023 was 582,0327.
- Unemployment Rate: The unemployment rate for May 2023 was 3.7 percent8.
These data points suggest a complex economic environment, with rising inflation and federal funds rate, a slight decline in house prices in Florida, an increase in consumer loans and personal savings, and a relatively low unemployment rate.
Why are Housing Prices Going Up in Florida For People in Major Cities?
In 2023, a snapshot of the Florida housing market presents an interesting picture. The majority of the major cities have seen a rise in home prices compared to the previous year, 2022. This is contrary to the notion that home prices are dropping in Florida.
Average Real Estate Costs by City in 2023
Miami Florida 2023
$451,436.44
Tampa Florida 2023
$370,274.20
Orlando Florida 2023
$384,884.02
Jacksonville Florida 2023
$362,670.75
North Port Florida 2023
$462,583.02
Cape Coral Florida 2023
$385,317.21
Lakeland Florida 2023
$312,247.29
Deltona Florida 2023
$345,609.58
Palm Bay Florida 2023
$357,456.33
Pensacola Florida 2023
$300,258.58
Port St. Lucie Florida 2023
$392,212.57
Tallahassee Florida 2023
$262,778
Naples Florida 2023
$590,612.64
Ocala Florida 2023
$280,640.20
Gainesville Florida 2023
$291,620.62
Crestview Florida 2023
$454,164.43
Punta Gorda Florida 2023
$365,610.44
Panama City Florida 2023
$360,201.57
Sebastian Florida 2023
$372,412.26
Homosassa Springs Florida 2023
$281,821.98
The Villages Florida 2023
$408,234.96
Sebring Florida 2023
$236,812.27
Key West Florida 2023
$958,087.14
Palatka Florida 2023
$187,209.92
Lake City Florida 2023
$248,506.22
Okeechobee Florida 2023
$248,836.65
Clewiston Florida 2023
$242,978.69
Arcadia Florida 2023
$258,368.05
Wauchula Florida 2023
$202,690.81
Average Real Estate Costs by City in 2022
Miami Homes FL 2022
$406,066.24
Tampa Homes 2022
$348,722.28
Orlando Real Estate Prices 2022
$359,859.46
Jacksonville Homes 2022
$337,927.80
North Port Homes 2022
$427,307.36
Cape Coral Homes 2022
$361,472.07
Lakeland Homes 2022
$293,516.54
Deltona Homes 2022
$324,938.72
Palm Bay Homes 2022
$338,453.09
Pensacola Homes 2022
$280,181.29
Port St. Lucie Home Fla 2022
$368,168.27
Tallahassee Home 2022
$242,561.25
Naples Houses 2022
$540,027.62
Ocala Florida’s in the Real Estate Market 2022
$255,381.18
Gainesville 2022
$270,301.81
Crestview 2022
$427,248.90
Punta Gorda 2022
$345,456.63
Panama City 2022
$329,260.06
Sebastian 2022
$341,613.19
Homosassa Springs 2022
$260,710.78
The Villages 2022
$386,519.71
Sebring 2022
$216,067.59
Key West 2022
$871,033.33
Palatka 2022
$174,707.54
Lake City 2022
$229,466.43
Okeechobee 2022
$234,567.96
Clewiston 2022
$219,289.75
Arcadia 2022
$237,897.52
Wauchula 2022
$187,126.78
Miami, for example, witnessed an 11.2% increase in average real estate costs, from $406,066.24 in 2022 to $451,436.44 in 2023. A similar trend can be observed in Tampa, where real estate costs increased by 6.2% from $348,722.28 in 2022 to $370,274.20 in 2023. Orlando also saw a 7% rise, with average real estate costs moving from $359,859.46 in 2022 to $384,884.02 in 2023.
It’s not just the major cities either. Smaller areas and towns are following suit. In Clewiston, the average real estate cost number rose by 10.8% from $219,289.75 in 2022 to $242,978.69 in 2023. In Arcadia, the increase number was 8.6% from $237,897.52 in 2022 to $258,368.05 in 2023.
There are, however, exceptions to this upward trend. Certain areas such as Palatka and Lake City saw a less significant increase, indicating a relative stagnation in their real estate markets. While the reasons for these exceptions can vary, factors such as local economic conditions, population growth, and real estate demand often play a role.
In conclusion, while there are some exceptions, the general trend across the state’s major areas indicates that real estate costs are not dropping but are instead on the rise. This rise is evident in both major areas and smaller towns. Therefore, it might be safe to say that the state’s real estate market, as of 2023, is experiencing a growth phase. It’s a phase where homeowners might see the value of their properties appreciate, and potential acquirers might need to brace for higher price tags.
Where are the Hottest Real Estate Markets in Florida?
- Key West: $958,087.14
- Naples: $590,612.64
- North Port: $462,583.02
- Crestview, Florida: $454,164.43
- Price of Homes in Miami: $451,436.44
- The Villages: $408,234.96
- Cape Coral: $385,317.21
- Orlando: $384,884.02
- Sebastian: $372,412.26
- Tampa: $370,274.20
While we’ve explored several popular real estate markets, the state is bursting with diversity. Let’s glance at some less-known yet quickly growing areas. North Port, nestled in the southern part of the state, saw a substantial price increase of 8.27% from $427,307.36 in 2022 to $462,583.02 in 2023. It’s an ideal spot for those seeking a slice of coastal living without the Miami price tag.
Speaking of Miami, it’s hard to ignore the magic city’s allure. Despite a significant increase of 11.18% from $406,066.24 to $451,436.44 in a year, the city continues to be an attractive spot for investors and homebuyers alike. Its blend of culture, nightlife, and pristine beaches make it worth every penny.
On the other end of the spectrum, we have areas like Palatka and Sebring, offering affordable alternatives. Despite the real estate costs rising by 7.16% and 9.6% respectively, their 2023 prices remain well below the state average, making them attractive for budget-conscious homebuyers.
In our journey through the diverse real estate landscape, we come across the unparalleled luxury of Key West. With the highest increase in real estate costs in the state, an astounding 10.01% jump from $871,033.33 in 2022 to $958,087.14 in 2023, it’s a testament to its continued desirability.
Next, we have three charming towns – Clewiston, Arcadia, and Wauchula. Though smaller in size, they haven’t escaped the upward trend. Clewiston experienced an 10.8% increase, Arcadia saw an 8.59% rise, and Wauchula’s prices went up by 8.32%. Their appeal lies in a quieter lifestyle away from city hustle.
In conclusion, whether you’re drawn to the glamour of the city, the affordable charm of Palatka, or the tranquility of Clewiston’s housing market, despite its upward trajectory, offers something for everyone. But does that mean family homes costs are dropping? The answer, based on our analysis, is a resounding “No.” Yet, the diversity in price growth across areas indicates opportunities for all kinds of acquirers and investors.
Will Home Prices Drop in Orlando Florida?
In the Orlando housing market, the dynamics of the costs for different home types have been quite interesting. According to a report by Norada Real Estate, overall sales in the Orlando housing market increased by 13.9% in May 2023 compared to April, with 3,150 sales in May, up from 2,766 sales in April. However, it’s worth noting that sales in May 2023 were 20.2% lower than in May 2022, which had 3,946 sales.
The median real estate cost in Orlando has also seen changes. In May 2023, the Orlando list price were up 6.96% compared to last year, selling for a median price of $384,884.02 . On average, homes in Orlando sell after 18 days for sale compared to 8 days last year. There were 721 homes sold in May this year, down from 864 last year.
Looking forward, Realtors’ chief economist expects housing to return to a more “traditional” environment like in 2018-2019 “as supply and demand become more balanced”. This could mean that while we may not see a significant drop in prices, the environment could stabilize, leading to a more predictable and balanced housing market in Orlando.
Is the Housing Market in Florida Expected to Drop?
The Florida housing market has seen a significant shift recently. According to a report by Realtors, single-family home sales in January 2023 were down by 32.5% compared to the same period in the previous year. This trend has been consistent for several months, with townhouse and condo sales experiencing an even steeper decline of nearly 41%. However, experts predict a return to a more balanced environment similar to the years 2018-2019. This suggests that while we’re currently seeing a drop, the environment may stabilize in the near future.
Are House Prices Going Down in Florida 2023?
In 2023, the state’s housing market has shown a slight fluctuation. Starting the year at an average price of $358,704.07 in January, there was a minor dip to $357,205.05 by March. However, by May, the average home price rebounded to $358,351.20. This subtle ebb and flow suggest that while prices aren’t dramatically dropping, they aren’t significantly rising either. It’s a balanced environment, making it a potentially good time for both acquirers and sellers. Remember, real estate trends can change, so it’s essential to stay informed.