The Florida Housing Market is not necessarily busting at the seams, but statewide housing data indicates that the market is growing along normal trend lines. This means that the pace of sales, median sale price increases, and other significant data tell of moderate and sustainable growth. Florida continues to be one of the most desirable places to live in the country and this is evident, as the state’s population has been growing along with its economy. Florida is the second fastest growing state in the U.S. and is now the 4th most populous. In the past year the housing market in Florida has seen some of the highest increases in home appreciation rates in the country. Check out the past Florida housing market here.
Florida has all the perks: some of the best beaches, great weather, and a healthy business climate with no state income tax. The state is home to the world’s largest theme park in Disney World, and also Universal Studios, Sea World, and Busch Gardens among others. Florida also has some of the most unique state parks, including the country’s only undersea state park, and the Everglades. Tourists flock in the millions to Florida every year helping to boost the economy.
For this reason, and Florida’s own nation-leading citrus fruit production, the state’s job growth and economy continue to prosper.
As a whole the percentage of cash sales for Florida real estate has been declining. This means that investors are starting to pull back on purchases as home prices rise and any potential profits begin to shrink. And all of this is happening as home financing becomes easier for first time home buyers to obtain. This bodes well for the 2015 housing market in Florida. “At the end of the day, it’s about home ownership and not investors flipping homes,” says former president of Florida Realtors Summer Greene.
Buyers looking for condos for sale in Florida are now finding it easier to get mortgages, as there are fewer units that are foreclosed. Most mortgage lenders limited financing in buildings with a large number of delinquent and foreclosed units. And now that cash buying investors are backing off banks need to get these vacancies filled. As of March of this year townhouse-condo sales were up 13.7% compared to the same time a year ago.
So the 2015 housing market for Florida looks to be so-so. North and South Florida real estate is in high demand, leaving the middle of the state with affordable and available housing. But while there are different levels of home value gains, unfortunately Florida still ranks among the top 5 states with the most homeowners underwater on their mortgages (they owe more than their home is worth.) “The decrease in underwater properties is promising, but the floodwaters aren’t receding as quickly as they were before,” say vice-president of RealtyTrac Daren Blomquist. Until this changes Florida’s real estate status will likely remain the same.
Below are some of the factors to consider when making housing market predictions in the state, and the best places to live in Florida. Also be sure to check out sites like Realtor.com FL that update their information every 15 minutes for the latest housing trends in the state.
Influencing Factors for the 2015 Florida Housing Market
- According to Zillow the home value in Florida is $171,800. This is compared to $163,000 a year ago.
- The median list price is $224,000 and the median sale price is $190,000. There is room for negotiation through most of the states housing markets. Overall it is still a buyers market.
- Home values have gone up 6.8% in the past year and Zillow predicts this will increase 1.8% within the next year. Florida is seeing slow but steady growth, following the trend seen through much of the country.
- The median rent paid is $1,500. Higher than the national average, and most likely driven higher buy the rent prices of North and South Florida where homes are either very expensive (Miami) or just in high demand (Jacksonville and Tampa).
- The percentage of delinquent mortgages is 10% (higher than the national percentage of 6%), and the percentage of Floridians underwater on their mortgage is 18.9%. These factors contribute to Florida not seeing a larger increase in home appreciation gains.
- Florida has the fastest-growing labor force in the country and the state expects between 2.2 to 2.4% growths in the job market in the next year.
Best Places to Live in Florida
The Jacksonville housing market, and Northeast Florida in general, has seen a boom in sales recently and is considered a sellers market. It’s not unheard of for homes to go on the market and sell within a day. “The fact is, with inventory as low as it is, finding good deals is few and far between,” says Yellow Fin Realtor Cole Slate. What makes this even more amazing is that Jacksonville is the state’s largest community. The fact that there is a shortage of homes to buy is telling of how much people are looking to own homes in the city. Jacksonville has a median home value of $123,900. There has been a 3.2% increase in the past year and real estate forecasters predict that this will increase 1.7% in the next year. The percentage of delinquent mortgages in Jacksonville is 8.3%, and the percentage of Jacksonville homeowners underwater on their mortgages is a staggering 30%. Although cash investors are backing off in South Florida, Jacksonville could still be a place for flippers to find deals if they have cash in hand.
The Jacksonville home value index saw a significant increase from August 2012 to August 2014 but has tapered off to a slow but steady increase since. The median sale price for homes in Jacksonville is $159,175 and the median list price is $149,000. This absolutely backs up the point that this is a sellers market. Buyers have little room for negotiating because there are so few homes to buy and competition between buyers is driving up prices well over the listing price. What’s bringing this demand to the area? The climate is great, the area is teeming with award winning schools, and mortgage rates are still historically very low. As of now Jacksonville is the place to be for people looking to relocate to Florida. Just be ready to compete heavily for that house you want!
As the third largest community in the state, the Tampa housing market, has seen a more significant increase as of recently. Home values have seen an increase of 5.3% in the past year and the number is expected to increase another 2.1% in the following year. Median home values in Tampa stand at $141,800 and the median rent is $1,285. According to a Buy vs. Rent study conducted by Trulia FL, it is 43% cheaper to buy a home rather than rent one in Tampa Bay (assuming the buyer puts 3.5% down and will stay in the home for 7 years). Delinquent mortgages in Tampa are 10.5% and homeowners underwater on their mortgage come in at 22.2%. Median list price is $199,000 and median sale price is about the same, meaning that homes are being bought up for the asking price. There does seem to be a shortage of homes for sale and a surplus of apartments for rent. For those looking to purchase a home in Tampa, the search may be a little more extensive than past markets in the area as supply is down and demand continues to rise.
One area of Florida that forecasters expect to cool off as far as home values is the Miami housing market. Miami is second only to Jacksonville in size. In the past year home values increased by 5.1%, but forecasters see this rate leveling off in the next year. Miami boasts some of the most expensive real estate in the Florida housing market. The median home value in Miami is $284,300 and the median rent price is a staggering $2,350. Median list prices come in at $409,000 and sale prices at $324,000. This differential in pricing is an indicator that the South Florida market has become a buyers market. According to RealtyTrac, South Florida flips were down 25% at the beginning of this year. Flippers can no longer make large profits on homes and because of this the market is turning towards the buyer. The percentage of delinquent on mortgage comes in at 12.6% and 20.4% of Miami homeowners are underwater on their mortgage. Miami is a great buy if you can afford it, but don’t look for a large return on your investment anytime soon.
Unlike Miami, the Orlando housing market is expected to see growth in the next year. Orlando home values saw an increase of 3.6% the past year and predictions have this number rising another 2.2% within the next year. As the fifth largest community in Florida there are homes to be bought but without the demand that is driving up sale prices between buyers as it is further north in areas such as Jacksonville. The median home value in Orlando is $138,700 and the median rent price in Orlando is $1,167. The percentage of delinquent mortgages is some of the lowest in the state at 9.5%. However, the percentage of homeowners underwater on their mortgages is 20.8%, which is slightly higher than the state average. The median list price AND median sale price are both roughly $180,000. Orlando is great for affordability and supply, but the market does not necessarily favor the buyer or seller at this point, which means both parties should get a fair deal.