Florida real estate isn’t the easiest market to buy or sell in right now. Due to so many changes such as insurance reform and these higher interest rates, we’re seeing a lot more buyers take a bit longer to try and ensure they’re making the best financial decision possible.
Watch this YouTube short for a brief explanation of the current market:
Rising Housing Rates
Florida housing prices have risen by 78% in the past five years, and we could expect that same trend to continue for the next few years. Moreover, there has been a great increase in interstate migration causing the population to rise in the Sunny State which in fact, is the primary driving force for rising housing costs.
As mortgage rates rise and demand persists in Florida, house sales across the state were down 6.4% in July compared to the year prior. According to the July report from Florida Realtors, the median home cost statewide was $415,000 in July, up slightly from $412,000 in July 2022.
Now with the rise of interest rates near or above 7%, there has been an impact on some homebuyers. While the Florida home prices are cooling some, the increasing mortgage rates make monthly payments higher for potential buyers. This has greatly caused some prospective buyers to shy away from purchasing a home.
However, in the high-value areas within the state, the interest rates have minimal to no effect on those cash buyers with no financing involved.
Rising Issue: Home Insurance
Florida residents currently face a significant rise in their home insurance premiums, which poses a significant threat to the real estate market and current residents. Due to the increase in insurance claims, a number of property insurance companies have been deemed insolvent, and their expenses have fallen to the Florida Insurance Guaranty Association (FIGA). Subsequently, FIGA is imposing two 2% levies on all Florida homeowners’ policies to help pay for these rising costs. FIGA assessments and the overall increase in homeownership policy premiums mean that the average annual premium in the state spiked to $2,385. For comparison, California’s (the state with the highest cost of living) average homeowners insurance cost is only $1,380.
Florida Housing Market Statistics
According to the July 2023 data of Florida real estate market statistics from Redfin.com,
Home Sales: Home sales are at a low of 6.9% YoY. In July 2023, 31,825 homes were sold, down from 34,187 in July 2022.
Median Days on Market: The median days on the market for homes for sale was 40 days, up by 15 days YoY.
New Listed Homes: The number of newly listed homes is at 38,722, down by 21.3% YoY.
The rising cost of homeowners insurance has greatly impacted the Florida real estate market.
It’s crucial to align yourself with a Realtor® and other real estate professionals who understand how to navigate a turbulent market like the one we’re currently in.
You can still accomplish your goals, whether you’re buying or selling, but you need the right team to help you achieve them. If you need a professional real estate agent to guide you in this current volatile market, you can book a call with us by clicking here.