Content:
- Overview of the real estate market in Florida and the US
- Market dynamics
- Housing prices in Florida
- Top 5 most affordable cities in Florida
Overview of the real estate market in Florida and the US
Where is the best place to buy a home to live in Florida? What is the most affordable location in the state? These questions are of concern to those who wish to retire to the Sunshine State and have limited income, as well as remote workers, the so-called digital nomads, who do not want to spend a large chunk of their wages on food, rent, transportation, and taxes.
To answer these questions, let’s review the current state of the real estate market in the country and specifically Florida in H1 2023.
Market dynamics
The median selling price of a home in the US in Q2 2023 was $436,800. This is $3,700 more than a year ago but $42,700 less than in the last quarter of 2022, when this figure was $479,500.
Housing prices in the country rose rapidly from mid-2021 to the end of 2022, but in 2023 the market began to cool down. Real estate in Florida, however, remains in high demand. Although transaction volume in the state has declined markedly this year, housing prices continue to go up, albeit at a slower rate than in 2021–2022.
The main reason why the market is cooling down is the rise in mortgage prices. Mortgage rates plummeted in 2020, boosting demand for owner-occupied homes as people sought to take advantage of this. The COVID-19 pandemic also caused consumers to shift some of their spending toward investing in real estate. From Q1 2020 through Q4 2022, the median home selling price increased 46% from $329,000 to $479,500, which is one of the fastest growth rates in the median home selling price in US history.
However, since 2022, mortgage rates began to skyrocket, and in Q1 2023, housing prices dropped for the first time since 2020. Experts note that such a drop is not a sign of the market overheating and average housing prices across the country are likely to start rising again once buyers get used to the new mortgage rates. According to local realtors, in Florida, the demand for apartments and houses still exceeds the supply. The units put up for sale wait for their buyers for a relatively long time, but this is more likely due to the unwillingness of sellers to reduce prices than to a lack of demand. So how much on average does it cost to buy local housing?
Housing prices in Florida
To buy a house in Florida, buyers should prepare approximately $383,063. This is the median home price in the state in the second quarter of the year. Let’s compare this with other states.
Hawaii is the most expensive state to buy a home with a median price of $835,000. In California, this figure is $728,134. The cheapest state for prospective homeowners is West Virginia, with a median home price of $147,000. As you can see from the ranking of the cheapest cities in Florida to buy housing below, some locations in the state are just as affordable.
On average, the typical price of a home in Florida exceeds that of the US as a whole by 15%. The median household income as a percentage of home value in the state is 16%. This is 10% lower than the national median.
This ratio largely explains the long (more than a month on average) listing time of local properties on the websites of real estate agencies, because it leads to a low ratio of income to home value and undermines affordability of housing for locals. The latter factor, however, increases the competitiveness of overseas investors in the Florida real estate market. Apartments in Florida are usually purchased by residents of large cities or foreigners moving to Florida from European metropolises. In the ranking below, prices are for single-family homes.
Top 5 most affordable cities in Florida
The ranking below is based not only on the value of real estate in the listed locations, but also on other factors such as the cost of groceries and services in the city, the average tax rate, the ratio of median household income to mortgage expenses and other real estate payments. These 5 cities are the most affordable for buying a home and further living in Florida.
1. Titusville
Titusville is a small city on the Atlantic coast near Orlando.
Average property tax: $1,236 per year.
Median household income: $46,609 per year.
Median home price: $143,555.
Titusville is located on the Space Coast and is the most affordable city in Florida. Nearby is a site from which rockets and satellites are launched into space. From a trip to the Kennedy Space Center to a holiday on the Canaveral National Seashore, people who choose to live in Titusville will always find some exotic entertainment, whether it’s local nature or a spaceship.
This city tops the list of the most affordable cities in Florida in terms of cost of living compiled by local real estate market participants.
2. Winter Haven
In second place in the ranking of the cheapest cities in Florida with a low cost of living is another small city, this time located inland in Central Florida between Tampa and Orlando.
Average property tax: $1,325.
Median household income: $46,669.
Median home price: $154,007.
There are many beautiful lakes in the city, which allows locals to go boating and fishing. This place is the epitome of a classic all-American city. Here you can go hiking on special trails, ride mountain bikes, and visit book clubs and fairs.
3. Lauderdale Lakes
As the name implies, this city, located 15 km from the Atlantic coast of South Florida, is also surrounded by numerous lakes and is a suburb of one of the largest cities in the state, Fort Lauderdale. Despite the proximity to the downtown of an expensive metropolis, the cost of living and real estate in this city, where Spanish is heard as often as English, is very low.
Average property tax: $1,849.
Median household income: $35,532.
Median home price: $119,742.
Among the popular spots nearby is Hugh Taylor Birch State Park, a local version of Central Park in New York, gifted to the city by the man for whom it is named. Fern Forest Nature Center, Everglades National Park, and Hillsboro Inlet Lighthouse are also within a half-hour drive. What’s more, you can find a huge number of great restaurants, cheerful cafes, shopping malls, and many more in the city. In this location, you can pick not only ready-made properties, but also off-plan projects in Florida.
4. Daytona Beach
Famous for its endless beaches, Daytona Beach is a city on the Atlantic coast with a vibrant downtown and the famous Daytona International Speedway, a track hosting one of the most prestigious motor races in the world.
Average property tax: $1,438.
Median household income: $35,893.
Median home price: $152,904.
Thanks to the climate, plenty of events and festivals are held here all year round, which means there is always something exciting going on in Daytona. Those who decide to live here will never be bored. Real estate here can be rented out both short- and long-term. Rental housing prices rise especially high during international sporting events.
5. Sanford
Last but not least among the top five most affordable places to live and buy real estate in Florida is one of the state’s oldest cities, Sanford.
Average property tax: $1,378.
Median household income: $47,217.
Median home price: $156,760.
This city has preserved impressive 19th-century architecture. Here you can find charming boutiques with unique local items, lively cafes and restaurants, and beautiful views of the lakes, which are abundant in the area. The city boasts a low cost of living, and a warm, balanced climate and a friendly local community typical of small American towns are the icing on the cake.
