Florida is the third largest state in the country and one of the most popular places to acquire real estate for both Americans and foreign nationals. Future owners are attracted to this place due to the excellent weather conditions and the good perspectives for the housing market, which has been currently experiencing a multi-year boom - over the past 5 years, home prices in this state have gone up by almost 80%.
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Two noteworthy tendencies can be seen if you look at market data from the previous year. Firstly, there was a 2.5% decline in closed transactions between the first quarter of 2021 and the first quarter of 2022, decreasing from 78,000 to 76,000 deals. Additionally, and very noticeably, the number of offers on the real estate market dropped by as much as 10%. Moreover, approx. only 28,000 units were up for sale at the end of the period, nearly three times less than the typical quarterly sales rate in previous years.
However, both transaction speed and value rose. Another record was set by the 21% growth in the sold property's median value. Instead of taking nine weeks, the transactions began to close, on average, after seven weeks. Small to medium-sized single-family homes, the market segment appealing to primary buyers the most, are the focus of these statistics, while the rest of the market exhibits comparable tendencies. These numbers have an obvious explanation: individuals want to purchase real estate in Florida as soon as possible, and due to a decreasing supply, are willing to spend more.
Florida was the country's leader in the real estate price rise at the start of 2022 compared to the overall US property market. The "sunny state" claimed the lead with a 31%, rise in prices, well above the national average of 20%. Tampa and Orlando, two of the largest cities in Florida, were at the top of the list of the most expensive real estate.
The above-mentioned tendencies strengthened by the end of 2022. The third quarter of 2022 saw a 22% decline in sales compared to the same period of the previous year, while prices for residences sold rose even higher. At present, a single-family home costs, on average, roughly $550,000 - up from $495,000 a year ago. Therefore, a buyer in 2021 would save around 10% compared to costs at the end of 2022 when purchasing a similar home.
It’s important to note that while the median price (remember that half of the homes sold are cheaper than the median price, and half are more costly) is practically always increasing. The average house price in Florida is prone to seasonal changes typical of the American market. This indicates that the "average price of a house" in general—the price around which the majority of offers are centred—has gone up. However, the overall picture of the market in the area is significantly impacted by the price of luxury real estate.
Forecasts for the foreseeable future anticipate that the costs of houses in Florida will increase and that supply will not keep up with demand. In the medium term, a house purchased at the end of 2022 can be expected to rise in value by 10-15% yearly.
The real estate market in major Florida cities is still expanding, but several factors are slowing this down.
- Firstly, we can mention the increase in mortgage rates. The fact that most buyers are Americans plays a significant role in their decision to buy.
- Secondly, fewer individuals will purchase due to the price hikes. Naturally, this won't lower the price of a specific villa in Florida, but it’ll push sellers to offer a discount if they don't want to wait around for a while.
- Thirdly, experts anticipate a rise in the real estate demand in the once undemanding little Florida areas e.g., Fort Myers or Lakeland, as a result of the growing acceptance of remote employment.
Acquiring property in Florida generally continues to be a lucrative investment in a market that is expanding and has a promising future. Be aware that selecting a second house or a brand-new property in Florida involves several factors. The location of a unit is crucial in making this decision. Here are a few of the "sunshine state's" most intriguing locations for a prospective home purchase.
Tampa, Florida
Tampa, Florida, was chosen as the best US real estate market in 2022 by Zillow, the largest US real estate website. Unfortunately, the best isn't always the easiest to purchase. A small number of offers with a significant number of purchasers, along with an overall strong economic performance, helped the city to take the top spot. The Tampa market has a lot to offer if you're seeking an older but well-renovated 92 m2 three-bedroom, one-bathroom home that costs $325,000, is close to the city centre, and has 600 m2 of land. Tampa, Florida's third-largest city, offers excellent chances for both work and leisure.
Iona, Florida
With a population of just over 10,000 people, it’s unlikely that many Americans are even aware of the existence of this remote region. However, it reached an astounding result, with the cost of homes in this area almost doubling by the end of 2022 compared to the end of 2021. For an average price of $500,000, you can purchase a brand-new, large house with three bedrooms, two bathrooms, and a total floor area of 300 m2, all on a 2,200 m2 lot. Indeed, there isn't much real estate available because Iona is only a small area of land on the river's edge that flows into the Gulf of Mexico. Its popularity is consistent with the contemporary trend of working remotely from home and avoiding the hustle and bustle of large cities. In this area, 24 homes were sold this year whereas 40 homes were sold the previous year. It’s clear that this is the most extreme illustration of Florida's basic trend of rising real estate prices with shrinking markets.
Daytona Beach, Florida
Fans of NASCAR are familiar with this modest resort city of just over 60,000 thanks to the prestigious Daytona 500. The value of real estate is growing at the speed of a race car, with an average price increase of 40% between 2021 and 2022. As you can see, Florida real estate sales may be as exciting as the car races. Here, a house with four bedrooms, two bathrooms, and a total floor area of 133 m2 on 400 m2 land will cost $270,000, as opposed to $350,000 in Iona. Daytona Beach, a slice of "one-storey America," will appeal to people who enjoy sunny weather and seaside vacations as well as car enthusiasts.
