Florida

Q1 2024 kicked off another strong year for the Florida real estate market. It was marked by a 3.4% increase in home prices compared to the previous year, with the average home price nearing $400K.

Despite the impressive sustained price surge, the market saw a 11.9% decline in the number of homes sold, totaling 378,188. Ironically, the median days on the market decreased to 33 days, indicating a slightly faster pace compared to the previous year.

Key Trends and Predictions for 2024

1. Population influx (demand) persists

Florida continues to attract a substantial number of residents encompassing a broad demographic from other states. The top states people are moving from include California, New York, and Illinois, driven by climate, lack of state income tax, and appealing lifestyle. Popular destinations within Florida include Sarasota and Cape Coral.
In light of this, the state is anticipated to experience substantial population growth, which should keep the housing market buoyant, especially in urban and suburban locales. This steady influx of new residents will likely support real estate prices and prevent any significant downturn in the market.

2. Rise in carry costs affect where buyers are buying

Rising HOA fees, insurance costs, and property taxes are becoming significant concerns for residents, potentially impacting buyers’ choices, especially in high-demand areas like Miami and Tampa.

3. 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.

4. Luxury buyers spike the increase in home prices

Florida’s luxury property market is expected to remain robust in 2024, with high-end buyers from Latin America, Europe, and Asia driving demand. This trend is especially evident in Miami, which has emerged as a global center of finance, tech, and culture.

Properties on the waterfront and walkable neighborhoods are in high demand, but buyers may also consider emerging areas for more affordable luxury options due to rising land costs.

5. Upward trend in new home construction sales

New construction is on the rise again, with builders offering attractive incentives and a shift back to traditional sales methods like “first come, first served,” which is a relief to buyers tired of bidding wars. Although supply chain issues still present minor setbacks, they have significantly eased compared to 2023. This improvement in the new construction sector is crucial, as it helps to meet the persistent demand from various buyer segments, including retirees and young families looking for community-rich environments and good school districts.

6. 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.

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:

• 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. The November result may even affect the pulse of the DOJ as they continue to observe the NAR settlement policy fallout.
• 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.
• Communicate your Value
  With the upcoming procedural pivot it has never been more important to know and be able to clearly communicate your value to represent your exclusive seller or buyer. The days of an agent leaning primarily on charm to attract and maintain a dedicated client base is likely coming to a close. Educate yourself on the process and educate your potential client on your expertise. The cream in our industry will rise.