Market Watch

So you’re thinking about buying or selling a house in beautiful, sunny Florida. But real estate has been crazy the last few years and you’re not sure what’s the smartest move to make. We get it. We want your home to be a blessing, not a curse. That’s why we dug into the latest news on the Florida housing market to give you a heads-up on what to expect in the Sunshine State. But before we start, know that ultimately the best way to learn about Florida’s housing market is to talk to one of our agents! We can guide you to make your best housing decisions.

What’s the Florida Housing Market Like?

Overall, the Florida housing market is still pretty hot and is expected to stay that way throughout the next year. This is great if you’re a seller because it means home prices are going up and there isn’t much selling competition—so you get the luxury of choosing from the best offers on your timeline.

On the flip side, Florida home buyers have it pretty rough since post-pandemic buyer demand is on the rise and available homes for sale are still down. The best deals are getting plucked off the market fast! And now that mortgage rates are going back up after record lows, it’s no wonder why home closings in Florida are slightly down compared to the booming market of 2021.1

Even so, don’t let that get you down—there’s still hope for you buyers out there, which we’ll cover later.

Florida Housing Market Predictions

Real estate gurus are predicting that the Florida housing market will stay hot throughout 2022, as we mentioned earlier. However, Florida REALTORS® Chief Economist Dr. Brad O’Connor said the only factor that might change things a bit is the impact of increasing mortgage interest rates.

1. Higher Mortgage Rates Could Slow Price Growth

Higher mortgage rates might make unprepared home buyers pause on their purchasing plans. If that lowers buyer demand enough in certain Florida markets, it could result in slower price growth. Slower price growth could help remaining buyers who can handle higher rates feel more confident about finding a home they can afford.

2. Home Sales Will Go Down a Bit

For the last 15 years, the supply of new homes in Florida has been trailing behind population growth. Top that off with the increase of post-pandemic migration to Florida and that creates a huge gap in supply and demand—which drives home prices up. As a result, buyers feel less confident about finding a home they can afford. And that leads to fewer home sales.

But Florida experts think this could actually end up being a positive factor that’ll help the long-term health of the market. After all, it’s not like home sales will drop to zero—experts think there will just be fewer of them. For example, instead of getting 15–20 offers, a good house might get four or five offers in this market.

That’s not a bad deal for both buyers and sellers. And it could make homeowners who are thinking of selling feel more confident about finding a new home, which could lead to more listings.

3. Affordable Homes Will Be in High Demand

Okay, reading that might have you saying “no duh.” But hear us out. O’Connor noted that in the first half of 2021 there was a never-before-seen explosion of affluent buyers from the Northeast and California moving to Florida. And, of course, this drove prices up on luxury homes. For example, last year one in every five home sales in Miami-Dade sold for $1 million or more, compared to one in 13 sales a few years ago. In other words, luxury homes took the spotlight in 2021. But in 2022, experts think buyer demand for luxury homes will level off and shift to more affordable homes.

4. Florida’s Smaller Markets Will Receive More Attention

The real estate gurus predict that 2022 will be about Florida’s gulf coast. As the popularity of remote work continues to grow, they believe people will continue to move from major cities to find a slower-paced lifestyle with a little more “legroom.” This trend could spotlight smaller markets like the Panhandle which are generally more affordable compared to Florida’s larger metros.

Keep in mind, that Florida housing market forecasts like these are about as reliable as a weather forecast—no one can predict what’s going to happen with 100% accuracy. They can only give you an idea of what to expect if you buy or sell a house in the coming months.

Should You Buy or Sell in This Florida Market?

First, don’t let what’s happening in the Florida housing market control your housing decisions—only your personal situation and finances should do that! With that said, here are some things to consider whether you’re selling or buying in Florida.

Florida Sellers

If you’re selling a house in Florida this year, chances are you’ll still probably make a nice profit. The question then becomes, will you have a hard time finding your next home with inventory so low? For help with that, check out our advice for Florida buyers.

Florida Buyers

Yes, home prices and mortgage rates are rising, and the limited supply of affordable homes is getting plucked off the market fast. So, what can you do to be ready to buy in this market? Here are some tips:

  • Don’t buy a house you can’t afford. It doesn’t matter how much money a mortgage lender will give you, if you’d struggle to make payments, now’s not the time to buy. To figure out your housing budget, use the 25% rule—never buy a home that comes with a monthly payment that’s more than 25% of your monthly take-home pay. That 25% limit includes principal, interest, property taxes, home insurance, private mortgage insurance (PMI), and homeowners association (HOA) fees. Use our mortgage calculator to enter your down payment amount and try out different home prices within your budget.
  • Save at least a 10–20% down payment. In this housing market (and every market), it’s so important to have a big down payment. Not only does a down payment of 10–20% lower your monthly payment and save you thousands and thousands of dollars in interest over the long term, but it also makes it easier for you to get approved for a mortgage. We get that a range of 10–20% might sound out of reach. But you can do it! 
  • Get pre-approved for a mortgage. A mortgage preapproval is more than getting prequalified—it means a lender has looked into your finances and has given you the okay on how much money you can borrow. This gives you a leg up on competing buyers because it shows sellers you're serious about buying a house and that you won’t be denied a mortgage if they decide to sell you their home. To get pre-approved for a mortgage you can pay off fast, talk to one of the home loan specialists we trust!
  •  An experienced agent with The Lawrence Group is your best ally in a crazy housing market. We will work to understand your budget. We'll help you consider all the costs of living in Florida to make sure you only pick an area that’s affordable compared to where you live now. We will also be your guide in finding the right house on your timeline so you can focus on your moving-to-Florida checklist.

If you have questions or need help with buying or selling, just complete the form below and a member of our team will be in touch shortly!

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