Florida is setting records for real estate transactions this year. The sunny state has always been attractive to those wanting to move closer to the tropics or buy property in Florida for a beach holiday. Over the past 5 years, houses and apartments in Florida have increased in price by about 80% on average, and the trend is likely to continue in 2023. At the same time, depending on the specific location, a similar budget will allow you to buy real estate of a different size and quality in Florida.
Content:
- Average prices for finished properties and properties for sale off plan in Florida
- Expectations and forecasts for 2023
Average prices for finished properties and properties for sale off plan in Florida
Low interest rates and the continued migration to the state from both northern states and overseas fueled a record increase in Florida property prices in the first half of 2022. Starting at $374,000 per unit, the state's median price rose to $402,000 in October, with intermediate price peaks in May and June. The growth in home sales naturally led to an increase in the population of the state. Fort Myers, whose population grew by 6%, and Cape Coral, which added almost 30,000 residents from January to December, set the records. Over the last 5 years, the top of the list of the fastest-growing cities are:
- The small town of Doral is located 20 kilometres from the centre of Miami. It now has 76,000 residents, up from 45,000 in 2010, and the average property value is around $490,000.
- The city of North Port in the south of the state has seen its population grow by 20% in 5 years and now stands at about 80,000 inhabitants. The average cost of a house there is somewhat lower, about $390,000.
- St. Cloud in the north of the state has a population of about 62,000 inhabitants. The number of residents has grown by 20% in 5 years, and the value of real estate is approaching $ 395,000.
After reviewing this data, we can conclude that both Americans and foreign buyers tend to purchase houses in Florida in small towns if possible. The fast pace of life in urban mega areas does not appeal to everyone, and pollution and crime in small towns are significantly lower than in megacities such as Miami, Tampa or Jacksonville. Rapid population growth is an indicator of a corresponding increase in property values. These cities in Florida are ranked as the top cities that have shown significant growth in residential property value:
- Over the year, the average cost of sold real estate in Doral increased by 40%. Despite some cooling of the market towards the end of the year, there’s a trend towards further price growth.
- Property values in North Port are growing at a slower rate. After experiencing a sharp rise in 2021, the market has declined slightly this year but is still showing a 20% increase over the past 12 months. Interestingly, here the selling price of the house is often equal to the originally requested, in contrast to Doral, where sellers sometimes make significant discounts to serious buyers.
- In St. Cloud, prices have risen nearly 30% over the past year. Now a typical real estate offer here looks like this: a house of 190 square meters with 3 bedrooms and 3 bathrooms can be bought for $385,000.
These and some other cities from the list of the fastest-growing cities will be of interest to buyers who want to purchase property in an expanding market. If a potential owner has the right amount to buy immediately and thus does not incur additional costs from an increased mortgage rate during the transaction, then the increase in the cost of the purchased house will please them even more.
Expectations and forecasts for 2023
The main prediction from realtors is quite simple: in the next 5 years, the real estate market is expected to grow in Florida. However, in this area, even short-term predictions sometimes fail badly. An example is the situation with the COVID-19 pandemic, which also affected the American real estate market. In the current situation, the growth in demand in the housing market in Florida is fueled by the desire of most buyers to buy property here in the warm South. It affects demand and the fear of being late, because now the supply does not keep pace with demand, and especially interesting options leave in a matter of days.
But the rise in prices provokes the opposite trend. Those who want to buy an apartment in Florida are now faced with the fact that the houses they need are significantly more expensive than they expected. Therefore, they can make a decision: either postpone the purchase until better times or change the area. And this is already slowing down sales growth: the remaining, not so numerous, buyers will seek offers from sellers who cannot afford to wait and therefore will readily offer discounts.
The main advice to real estate buyers from Florida realtors is to carefully evaluate your options and develop an investment strategy. For an average American, buying a home in Florida is a tough move right now, partly because of high mortgage rates. Foreign buyers are rarely put off by this consideration, so they should look to cities with rapidly rising prices. Residential properties purchased in such locations are likely to continue to rise in price in the next 5 years. Population growth will increase demand from tenants, and a price increase will allow, if desired, to resell the purchased property at a higher price and make a profit. A few more locations should be added to the cities listed above:
- The small village of Iona is not far from the already mentioned Cape Coral. Real estate prices here have almost doubled in a year. Sales are naturally limited by a small supply: a maximum of several dozen houses are sold in Iona every year.
- Daytona Beach is a resort town with 60,000 residents. Prices of real estate here grew by 40% in 2022.
But the mentioned cities of Tampa and Jacksonville, on the contrary, should be avoided if possible. At the end of 2022, the entire area in Tampa Bay County, including Tampa, Lakeland, Clearwater, and St. Petersburg, was considered to be some of the most overvalued in Florida in terms of residential real estate costs. Although prices here continue to rise, they will increase slower than in other places.
