Q4 2023 wrapped up a robust year for the Florida real estate market. It was marked by a 4.1% increase in home prices compared to the previous year, with the median home price reaching $380,000.
Despite the impressive price surge, the market saw a 4.5% decline in the number of homes sold, totaling 26,722. Additionally, the median days on the market increased to 35 days, indicating a slightly slower pace compared to the previous year.
Key Trends and Predictions for 2024
Job Growth and Population Influx
Florida’s enduring appeal as a destination for relocation is bolstered by its impressive job-growth rate. The state consistently ranks among the highest in job creation, attracting individuals seeking both employment opportunities and a vibrant lifestyle. This continuous influx of residents contributes to sustained demand in the housing market.
Return of Home Sellers
Analysts predict a resurgence of home sellers in 2024, particularly among those who delayed entering the market in 2023. Factors such as new job opportunities and the desire to relocate to more cost-effective areas are expected to drive sellers back into the market. Additionally, projections by experts like Meredith Whitney, who accurately predicted the 2008 financial crisis, suggest that baby boomers looking to downsize could contribute up to 30 million housing units.
Stabilization of Mortgage Interest Rates
After reaching a peak of 7.79% in October 2023, mortgage rates saw a slight decline to 7.35% in November. Analysts anticipate that rates will remain above 6%, but will stabilize in the second half of 2024. This stabilization is attributed to a softening labor market, a slowing economy, and a decrease in the annual inflation rate.
Rise in Homebuyers
The historically high interest rates in 2023 initially deterred many buyers. However, the decline in rates started in November led to a resurgence in mortgage demand. With easing inflation and stabilizing rates, the number of homebuyers is expected to rise in 2024.
Continued Increase in Home Prices
Home prices in Florida’s top metro areas exhibited steady growth throughout 2023. Florida Realtors Economists predict that this upward trajectory will persist as long as the low-supply-and-high-demand dynamic remains unchanged.
Upward Trend in New Home Construction Sales
In September 2023, 12.3% of homes purchased were new constructions, marking the highest percentage since 2022. Home builders actively offered concessions to attract buyers in 2023, a trend expected to continue into 2024, as builders and sellers compete to capture the attention of prospective buyers.
In summary, as Florida remains a hotbed for real estate activity, the coming year promises both challenges and opportunities for buyers, sellers, and investors alike. Stay tuned for a dynamic market landscape with evolving trends and strategic shifts in response to economic and demographic factors.
Actionable Advice for Florida Agents:
Track Interest Rates
The graphic below shows a direct relationship between dipping interest rates and increased demand. Leverage this information to convey a sense of urgency to consumers.
Plan for the Election Year
Historically, the economy does not have large swings during presidential election years. Remind your clients that this is a good time to act and not to wait to try to time the market.
Stay Florida Strong
The Sunshine State remains one of the nation’s great economic growth stories. Keep an eye on your local market, new developments, and capital investments. This continual enhancement of Florida communities should continue to drive inbound demand.
Focus on Listings
Even with the turbulence in the industry on the buyer’s side, the listing side rules and expectations remain the same — the Exclusive Right to Listing contract is not under scrutiny. Take advantage of this and allocate an extra 10% of your time and marketing budget towards listings.