Florida quarterly real estate report shows 30% drop in sale values vs 2021 The fourth quarter 2022 report showed that while the end of 2021 showed a $43.8 billion sale volume for Q42021, this past quarter fell to $30.6 billion. Additionally, the median sale price of a single-family home in Florida rose 9.6%, even as the overall sales that closed fell 33%. The median sale price of a Florida home was $400,000 from October to December, but in the Tampa market, it was a hair lower at $399,000. Compared to Q42021, Tampa homes had a 12.4% median price increase, while sale levels fell 32%.
Volume is down in commercial real estate transactions as well. But, similar to residential, values are not.
The median household income in Florida is 63k or so. 400k just isn’t sustainable. I have posted this before but for comparison, the county I live in has a median income of 156k, and a home price of 600k. So we are less four times the income for a home, Florida, the entire state, is 6.5. Bad things are gonna come for that at some point.
I just looked it up this morning for a post in another place, but our county has 16 houses that the median income can afford, and 220 houses priced at over a million dollars.
We are buying a townhouse in Winter Garden tomorrow for our daughters to live in/pay rent. 420k and they estimate that Orange County won’t get caught up in inventory for ten years. It’s crazy out there.
We have to remember lots of retirees and snowbirds not participating in the labor force will be skewing the RE numbers for as long as retirees keep coming to FL. Not saying it isn’t a problem, just that it doesn’t necessarily portend any sort of RE collapse - there are forces which defy the normal relationship between job income and housing prices (same thing with Californians cashing out huge home equity and driving up prices in the previously affordable nearby states). Maybe at some point we run out of rich snowbirds who can afford $1 million homes for 4 months out of the year. As FL is a relatively low income state, this is of little comfort to the median income person who can’t afford a median priced home.
This is the last few years in home prices in FL. Don’t know what their unit of measurement is, but it doesn’t matter, the chart speaks for it. There have always been retirees and snowbirds in FL. It’s a supply issue mainly.
The delays/supply chain shortages coming out of the pandemic definitely didn’t help. Seems to me lots of building activity going on now (at least anecdotally). Will be interesting to see if all these contracts close or builders need to slow their role a bit. I’m not watching too closely, but I’ve heard some reports of cancellations and incentives, but doubt they are anything game-changing (yet). With mortgage interest rates also being higher, you’d think something would have to give. Even cash buyers or investors could just as easily park their money elsewhere, and probably should if the expectation is for home price appreciation to finally take a break.
The other thing to watch is the institutional investor market. If they start dumping their rental properties, the turn could happen quickly. But they are a big buffer against a crash right now.
Its also cost to develop. More rules, higher impact fees, NIMBYs wanting lower density, higher material costs (pipe, concrete, asphalt etc) driving up cost to develop housing
Family is seriously considering moving out of Florida for that reason. The traffic is getting out of control, and the quality of life is sinking fast. There are just too many folks wanting to live here and COVID plus the boomers hitting retirement is making it worse. Add in the fact that there really isnt much more land in Florida that is developable. Most of the undeveloped land is either farmland, protected or unsuitable swamp. You have to go to the 1-10 corridor to find land that can be built on. It's just not sustainable long term.
From book to boom: how the Mormons plan a city for 500,000 in Florida Deseret Ranches: 300,000 Acres of Old Florida This will double in density to at least a cool million with urban planning. Keep an eye on this. Mormons are going to make bank on this.
Agree however as rental rates are still very high and in large demand it’s less likely those institutional investors will be dumping those properties.
