Across the nation, the housing market has been feeling the impact of rising interest rate changes and demand shifts. In Florida alone, sales of single-family residences have declined across the board. Detached homes, condos, and townhomes have all seen decreases in closings.
In addition to interest rate woes, home sales in Florida have seen 15% year-to-year price increases. According to a report from Florida Realtors, Florida took six of the top-ten spots for major metros with home price increases. According to Dr. Polkovnichenko, supervisory economist in the FHFA’s Division of Research and Statistics, “House prices grew at a much slower pace in recent quarters amid higher mortgage rates and a decline in mortgage applications.” He also states that “historically low inventory” plays a part in Florida’s slowdown in home sales.
Per Norada, single-family home listings were more than double levels seen in the previous year at the end of January of 2023. While this may seem impressive, it’s still lower than levels seen prior to the COVID-19 pandemic. With Florida’s increasing popularity among those looking to relocate, competition within the market continues to drive prices upward.
So what can we expect moving forward?
Miami: A case study
Florida’s popularity seems to have unlimited growth as business, individuals, and families across America seek to land in states within the Sunbelt. Florida can lend a lot of its popularity to a warm climate, lack of income tax, and business friendly environment.
For Miami, the seventh-largest metro in the United States, the real estate market continues to see strong demand, regardless of rate and price increases. Norada reports, per a Goldman Sachs analyst, the city is predicted to be one of the few major markets expected to see sustained housing prices within the remainder of 2023. They foresee home prices having a small climb towards the end of the year, and moving into December, those increases should reflect about 1.8%.
Investing in Miami
When it comes to investing, Miami shows signs of remaining a solid choice for the remainder of the year. Businesses seeking to move out of the west and northeast continue vetting Florida, especially Miami, as potential landing spots for headquarters relocations. This influx of jobs and business will drive home sales and a continuation of housing trends seen throughout 2023. While prices remain high, investors can look forward to seeing the value of property rise modestly.
In light of the favorable conditions, Bay Mountain Capital has recently started lending in Florida. Our efforts in the sunshine state are spearheaded by Joshua Pomerantz, our knowledgeable and stellar Florida Investments Associate. If you’re interested in seeing how we can help you achieve your investing goals, give him a call!