Key Insights from May 2023 Florida Housing Market Report

Key Insights from May 2023 Florida Housing Market Report - 1 (800) 880-7954

The Florida housing market in May 2023 showed a stable median sales price, with no major fluctuations observed for single-family homes. There was a minor increase in condo-townhouse prices. Despite a drop in closed sales, which could be attributed to high mortgage rates that have persisted over the last year, the market seems to be awaiting a decrease in interest rates based on recent Federal Reserve activity. Supply remains low and demand is affected by mortgage rates, but overall, the Florida housing market appears stable for the near term.

Consistent Home Prices

In May 2023, the median prices for closed existing single-family home sales in Florida remained in line with the previous year. This trend, which has been consistent throughout the year, signifies a stabilization in price growth. High mortgage rates still pose a challenge for potential buyers despite the slowing pace of rising prices.

Decrease in Closed Sales

Closed sales for existing single-family homes in Florida amounted to 26,396 in May, down by 8.5% compared to the same month in the previous year. Similar trends were seen in existing condo-townhouse sales with a 14.1% year-over-year decrease. High mortgage rates have led to this reduced listing and sales activity.

Influence of Mortgage Rates on the Housing Market

Persistent mortgage rates, ranging from 6% to 7% for 30-year fixed mortgages, have led to a decrease in closed sales. While there’s no sign of a significant drop or boost in sales in the near future, the housing market seems to be waiting for a pullback in interest rates, potentially several months away according to the Federal Reserve.

Median Home Sales Prices in Florida

In May 2023, the statewide median sales price for single-family existing homes was $419,900, slightly lower than the $420,000 recorded in May 2022. The median sales price for condo-townhouse units in May 2023 was $325,000, a modest 0.9% increase from the previous year.

Impact of Mortgage Rates on Inventory

Higher mortgage interest rates have not only led to decreased sales activity but have also deterred some homeowners from listing their properties. The number of existing homes coming onto the market remains low as a result, contributing to the short-term stability of home prices.

Balance Between Supply and Demand

Inventory levels in May 2023 saw an increase compared to the previous year, with a 2.7-month supply for single-family existing homes and a 3.6-month supply for condo-townhouses. However, these figures fall short of a balanced market, which typically requires a six-month supply. Limited inventory helps maintain stable pricing in the Florida housing market.

Florida Housing Market

With higher mortgage rates potentially causing unprepared buyers to delay their purchases, price appreciation may slow down, providing remaining buyers with more confidence in finding an affordable home. Florida’s real estate market has seen substantial price increases over the last few years due to the imbalance between demand and supply. Over the past decade, real estate in Florida has appreciated by 174.83%, equating to an annual home appreciation rate of 10.64%.

Future Predictions and Real Estate Appreciation

Despite this, high mortgage rates are pushing many buyers out of the market, which may present opportunities for those who stay, but it will also likely slow down the rate of appreciation over the next twelve months. Tampa Bay, in particular, has one of the most overvalued housing markets in the country, with homes overpriced by over 53.2%. Overall, Florida’s real estate market remains resilient, with average home values increasing and properties selling relatively quickly.