ORLANDO,
Fla., Feb. 4, 2025 /PRNewswire/ -- Is
Florida's housing sector on the
cusp of transitioning to a buyer's market? The answer could be yes,
especially in some local areas, according to Florida
Realtors® Chief Economist Dr. Brad O'Connor, who spoke to standing-room crowd
of Realtors at the 2025 Florida Real Estate Trends summit last week
during Florida Realtors' annual Mid-Winter Business Meetings.
"If we go by the general rule of thumb that five to six months
of supply is a balanced market, single-family homes ended 2024
still just barely in a seller's market at 4.7 months of supply,
while condos and townhouses are now firmly in buyer's market
territory, at 8.2 months' supply," O'Connor said.
At the end of the year at the county level, one-year growth in
single-family inventory levels was fairly uniform across the state,
with most counties falling in the 25 to 35% range. One-year growth
in active listings of condos and townhouses was strongly positive
across the state as of the end of 2024, but some areas have seen
more of an increase than others.
"In 2024, several challenges weakened demand for housing in
Florida, including the fact that
mortgage rates remained elevated along with property insurance
rates," O'Connor said.
Florida's housing market was
disrupted by several hurricanes during the year, from Hurricane
Debby to the almost back-to-back devastation of Hurricanes Helene
and Milton.
Other challenges that impacted the state's residential real
estate market last year were:
- Domestic in-migration still above the long-term trend, but is
slowing down
- Statewide job growth slowed, but remained quite strong
- International buyer demand remained tepid
- Issues impacting the condo market, specifically reserve
requirements and insurability
Looking back at the year, December was a good month for existing
single-family home sales, and that strong performance put the
statewide total at nearly 253,000 statewide single-family closed
sales for the year, 1.9% below 2023's total of nearly 258,000
sales, but also the fewest annual sales since 2014. According to
O'Connor, there was little variation across the state in 2024, as
most counties only saw small year-over-year declines.
Annual closed sales in the condo and townhouse category came in
at more than 94,000 for 2024, a 10.5% decline compared to the prior
year.
"Multiple factors were responsible for the underperformance of
this category throughout the year, including concerns about
insurance coverage and reserve requirement compliance giving some
prospective buyers cold feet," he said. "The result was the lowest
number of condo and townhouse sales we've seen for any year in
Florida since 2010.
"Declines were most prominent in coastal counties along both the
Atlantic and the Gulf. The lone bright spot was in the I-4 Corridor
in the exurban areas between Tampa
and Orlando, and further north
into The Villages and Ocala. These areas actually saw condo and
townhouse sales grow in 2024 compared to 2023."
Looking at new listings, over 360,000 single-family homes came
onto the market in 2024, a 9.5% increase compared to 2023. However,
the chief economist noted that 2023 was characterized by abnormally
low levels of new listings relative to recent years. The number of
single-family new listings in 2024 was more comparable to new
listings from 2018 to 2022.
O'Connor added, "As was the case with closed sales, county-level
changes in the number of new listings were fairly uniform across
the state in 2024, with the key difference being that new listings
were on the rise while closed sales were mostly on the
decline."
Year-over-year growth in new listings of condos and townhouses
slowed in the second half of 2024, especially when compared to the
first half of the year, he said, noting that because of the surge
of new listings that occurred in the early months of 2024, the
annual count of new condo and townhouse listings came in more than
11% higher than 2023's count.
"That increase is not much larger than the 9.5% increase we saw
for single-family homes, though, and it suggests that the narrative
of panicked condo owners across the state scrambling to sell in the
face of the new state-mandated reserve requirements has been a bit
overblown," O'Connor said. "We do think the requirements are having
an impact on the market, but this impact is being felt more so on
the buyer side than on the seller side."
With new listings growing and sales declining, inventory levels
for both the single-family category and the condo and townhouse
category ended the year slightly above the typical levels reported
during the pre-pandemic period of 2014 to 2019.
"Inventory is still largely moving along an upward trajectory so
we should continue to watch it as we move into the spring buying
season here in Florida," he
said.
The monthly median price for closed sales of single-family homes
did not change much over the past eight months, reflecting the
balance in the market for this property type; it was $420,000 at the end of 2024, up 2.4% from the
previous year. The median price for condos and townhouses, which
was $320,000 at the end of 2024 (down
0.8% from 2023), was lower than a year ago in each of the last six
months – which tracks with what months' supply says about this
property type being in buyer's market territory.
Still, throughout the year, the median price for this category
remained above 2022 levels.
According to O'Connor, "It will take significantly more
inventory to threaten the large gains in price appreciation that
occurred in between 2020 and 2022. Overall, the 2024 Florida
housing market saw mostly modest declines in sales and little
change in the way of home prices. Even though there were some
fluctuations in mortgage rates, they remained in the high range
relative to recent years. The most significant changes occurring in
2024 were the widening performance gap between the single-family
market and the condo and townhouse market and the overall rise in
inventory levels."
Going into 2025, interest rates are still going to dictate much
of how the market performs, but the challenges from 2024 are still
factors facing Florida's housing
sector over the coming months, he said.
Florida Realtors® serves as the voice
for real estate in Florida. It
provides programs, services, continuing education, research and
legislative representation to 238,000 members in 50
boards/associations. Florida Realtors® Newsroom website
is available at http://floridarealtors.org/newsroom.
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SOURCE Florida Realtors
