Florida Housing Market – Trends and Predictions


|10 min read

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Will Florida's red hot housing market crash?

Do you want to hear an absolutely shocking statistic? Florida housing prices have risen by 78% in the past five years, and the same trend is expected to continue through the next five years. 

Population growth in the Sunshine State has been a primary driver for rising housing costs. We are seeing more and more interstate migration, especially in the wake of the COVID-19 pandemic. New residents arrive seeking a better quality of life, including more space and more time in the outdoors. In fact, nearly 1,000 people move to Florida every day!  

Florida's housing market is driven by a massive population growth and high demand.

Let’s dive into the biggest drivers of this real estate market and some Florida housing market predictions for the end of 2022. 

Florida Housing Market at a Glance

September 2022

While Florida’s home prices have increased comparatively year over year, in Florida and the United States, we’re seeing a decline in home prices month over month. Additionally, homes are staying on the market longer than the national average, indicating that Florida’s hot market may be cooling. But don’t get too excited. Florida’s real estate market has been alluring for decades and even with bumps, the Sunshine State is expected to continue to have a strong buyer demand.

Florida home prices are up 15.1% year over year, with a median price of $465,000. Florida’s real estate market also has the most homes for sale in the Nation, with 82K on the market. The next closest state is Texas, with 78K homes for sale. These numbers are far above the national median of 9,808.

Oftentimes, high home prices and a large number of homes for sale would spell disaster in the real estate market. However, not in Florida’s housing market. Fueled by real estate investors, high population migration, and strong buyer demand, the Florida market will likely experience a softer correction relative to the nation.

The Market Survives the Hurricane 

Despite the havoc caused by Hurricane Ian, real estate prices in Florida are still expected to continue their upwards trajectory. A study by Veros Real Estate Solutions, a property valuation company, showed that, on average, cities hit by major storms saw the average home price increase by 7% over the following 12 months. Furthermore, growth levels in their subject cities maintained a 5.3% growth rate for the following five years. 

What does this mean for Florida? Don’t expect housing prices to drop despite the recent damage to western Florida. Ultimately, most storm victims aren’t looking to leave their home cities, and new residents are still hunting for their new Florida residences. The most recent and future storms that hit Florida will likely have the biggest impact on supply, not demand, which will further push prices higher. 

Home Insurance is a Rising Issue

Floridians face a significant rise in their home insurance premiums, which may pose a substantial threat to the housing market and current residents. Because of the increase in insurance claims, six 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 $4,231. For comparison, California’s (the state with the highest cost of living) average homeowners insurance cost is only $1,380, according to Insurance.com.

The rising cost of homeowners insurance could threaten the Florida housing market. However, its overall impact is still yet to be determined. The median home price sits at $465,000, which means that this state is still priced attractively for many interstate migrators and investors. 

The Impact of Rising Interest Rates on the Florida Housing Market

The Federal Reserve has been regularly increasing interest rates throughout the year and will continue until the inflation rate drops to an acceptable level. Interest rates directly impact buyers’ purchasing capacity and, subsequently, home prices. 

Despite rising interest rates, we still anticipate Florida housing prices to increase over the next five years. Ultimately, there isn’t enough supply to meet demand, as shown by the drop in the number of homes sold in the past year by 29.9%.

FastExpert partner and Florida real estate agent, Chris Spina, shares his professional perspective on the Florida housing market.

Florida Housing Market is Booming

The Florida housing market is still booming. All over the state we’re seeing large demand, especially compared to the states that were mostly shut down during the peak of the pandemic. Those states have proven to be a feeding ground for people moving to Florida, where we remained largely open given the ability to move things outdoors.

Further, with the ability to live and work remotely, people have taken advantage of no state income taxes in Florida. Housing is really determined by supply and demand, and the demand has been so great over the last 2-3 years prices have increased significantly.

Florida's housing market experienced a sharp increase in home prices.

Now with the rise of interest rates near or above 7%, there has been an impact on some buyers. While the Florida home prices are cooling some, the increasing mortgage rates make monthly payments higher for potential buyers. This has caused some to shy away from a home purchase.

However, in those areas with higher net worth, the interest rates have no effect since those buyers are usually cash buyers with no financing involved.

The market going forward will sputter a bit but, over time, will continue to chug along as it has over the last 3-4 years. 

Why is everyone moving to Florida?  

The most compelling reasons are – great weather and no state income tax. Also, there are no estate taxes either.

In addition, Florida is a homestead state, meaning that once you own a property and homestead your residency, your property tax assessments are limited to a maximum increase of 3% per year. You also get a total of a $50,000 reduction from your assessed valuation which ends up saving around $500-$700 per year in property taxes depending on where you live.

Finally, Florida has several cruise ports, Disney World, Universal, top-rated beaches, golf courses, casinos, and much more. Florida’s real estate market offers residents a multitude of lifestyle options. 

Disney World draws thousands of people to Florida annually

Living in Florida is Alluring

Florida has many reasons people are moving here. Currently, about 1,000 people and moving in per day, every day throughout the year. The most important reason is the lower taxation relative to other states. Florida has no state income tax and no estate state tax. This is huge for wage earners.

Additionally, the climate and lifestyle speak for themselves.

Central to South Florida is very temperate during the winter months, and South Florida, in particular feels like Summer year around! Many of the population split their time between two residences, with one in Florida’s housing.

Finally, with hundreds of golf courses, beautiful beaches, and lifestyle options, Florida has attracted a strong buyer demand and much selling competition.

Florida Housing Market Predictions

In the short run, the housing market will sputter. The recent impact of Hurricane Ian, the high inflation, and rising mortgage rates will pressure the Florida market.

However, this will be short-lived as people are still moving to Florida in droves.

In the 25 years of selling real estate in Southwest Florida, real estate agent, Chris Spina, has seen ups and downs. Yet, overall the market continues to chug along. Fueled by the continued infusion of people of all ages, ranging from families to retirees, coming to reside in the great State of Florida continues to draw the population. The alluring Florida market offers a life of fun, relaxation, and beauty in the Sunshine state.

Despite the damage caused by Hurricane Ian, the Florida housing market is expected to continue to increase due to a limited supply and a strong buyer demand.

Additionally, there will be fewer home sales due to higher mortgage rates putting pressure on buyer purchasing power. However, Florida’s low unemployment rate, strong demand, and beautiful climate will continue to keep Florida’s housing market attractive.

The Bottom line is:

Florida will continue to grow in leaps and bounds as it has over the last many years!

Find a Trusted Florida Real Estate Agent

The best way to find the home of your dreams is to work with a top real estate agent who puts your ideals first.  For a fast and easy way to find local Florida real estate agents, check out our FastExpert partners.  We rank our agents based on sales and customer reviews and will match you with the perfect real estate agent.  FastExpert makes real estate a little bit easier so that you can focus on what matters.

Find Top-Rated Real Estate Agents in Florida!

Chris Spina Spina Realty Company

Chris Spina of Spina Realty Company has 25 years of experience and leads local Real Estate Agents throughout Collier and Lee Counties on the Southwest Coast along with Orange and Seminole Counties in Central Florida. He offers Expert Negotiating Skills, Successful Strategies & Superior Service to guide clients through a stress-free experience.

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