by: Patti@LivebytheWater | Livebythewater.com
The Florida housing market has long been a subject of fascination and speculation, with its dynamic shifts influenced by a myriad of factors. As we navigate the market in 2024, homeowners, investors, and industry observers are keenly watching to discern whether the market is poised for another surge, stabilization, or, in more ominous terms, a potential crash.
It’s an interesting time to be in real estate. This has been true for the past 20 years. And it is always a perspective of each individuals situation that makes them love or hate the market. For those who owned real estate before covid and the surge in prices, they are happy with the market. For those who didn’t, many have been priced out and are not happy. And of course, these are the people waiting for the crash! Not to hurt anyone who owns real estate, but simply to make it affordable again for them.
Then we have the surge in big investment companies and corporations buying up housing and, in my opinion, keeping the real estate market high with their hold and influence in the market. With over 25% of the homes being owned by real estate investment companies, it is not difficult to see how they have some control in individual markets. It is easy for them to keep properties off the market to keep the inventory low and rents high because they have billions of dollars and profit from keeping prices high.
So the big question is, will the real estate crash in 2024 or beyond? Can it crash with investment companies having such a big hold on the market? Truthfully, it is hard to predict in today’s crazy economy. Many say the economy is headed for a crash. While others are saying it will just settle down and the prices will steady. And even if the economy crashes, some believe the real estate will simply level out and not crash. Again, I believe that is because the investment companies will maintain their hold and keep control of the market value.
While we can’t give absolute predictions, we can look at the current state of the Florida housing market, key indicators, and factors that might affect the trajectory in the coming years.
Current Market Overview
Current Data on Single-Family homes for 2023 from Florida Realtors and Redfin. (numbers are rounded and compared to prior year)
- Closed sales were down 10.3%
- Cash Sales were down 17.2%
- Average sale price was $574,000 – up 2.1%
- New listings – down 10.2%
- Inventory – Active Listings – up 17.8%
- Months in inventory 3.6 – up 33.3%
It is interesting in Florida that while the inventory may be up, the price has still gone up in many markets.
Will Florida’s Real Estate Market Stay Strong?
Florida is the fastest growing state in population currently and doesn’t show signs of slowing. Florida’s economy, closely tied to sectors like tourism, technology, and real estate, has shown resilience in the face of various challenges.
Job growth and economic stability are crucial indicators for a healthy housing market and Florida has shown strong job growth and job opportunities. Florida’s emergence as a tech hub, with major companies and startups choosing the state as their base, presents opportunities for job creation and increased demand for housing in urban and suburban areas.
The real estate industry is evolving, with innovative solutions such as co-living spaces, sustainable housing, and smart home technologies gaining traction. These advancements could reshape the housing landscape. Large investment companies and builders are building more communities and offering amenities for today’s distinct home buyers making it a top choice for many to relocate to the Sunshine State.
Potential Market Disrupters
External economic factors, such as a broader economic downturn or geopolitical events, could have ripple effects on the Florida housing market. As a globally connected state, Florida is not immune to international economic shifts.
Interest rates are a pivotal factor in the real estate equation, and rising rates could impact the affordability of homes, potentially slowing down the market.
Investors in Florida have been buying up about 20-30% of all homes for sale on the market (reference: pew trust) depending on the location, keeping the market seemingly strong. However, with investors buying up more real estate, the impact on home ownership for the average Floridian becomes more dismal.
Forecasting the trajectory of any housing market presents inherent difficulties. However, a thorough grasp of prevailing trends and potential catalysts empowers stakeholders to make well-informed choices. Adaptability, strategic foresight, and vigilance regarding market dynamics will prove indispensable for individuals navigating this constantly evolving terrain and seeking the help of professionals will make the road easier and less stressful.
Here’s what our Experts have to say…
I predict the real estate market will hold due to big corporate investments and at most, will experience a slight correction and leveling out, even amidst a possible economic downturn. Florida is very diverse in it’s real estate and pricing of the market. Certain areas may have price drops, while areas such as Miami, may continue to increase. I also believe rents are never going back to anything near what they were pre-covid. With the big corporations controlling the market, and the small guys happy to get a higher rent payment, no one is dropping rents.
