The average sales price of single-family homes in the state increased 3.7% annually, reaching $575,832.
In recent years, Florida has become one of the Real Estate flagships in the United States, characterized by its luxury skyscrapers and a dynamism in national and foreign investment that, until now, had avoided the generalized real estate crisis in the country.
However, the region is beginning to show signs of deceleration due to the economic challenges caused by the increase in mortgage interest rates, which has had an impact on the market's decision to buy.
Data from the Florida Realtors Association show that, in August 2023, a total of 22,917 single-family home sales were completed, representing a 7.9% annual decrease.
The increase in the cost of financing adds to the increase in unit prices, as the average sales price in the state increased 3.7% year-over-year to $575,832. Thus, 14.9% of the homes were sold above the list price.
In this regard, Mauricio Moya, developer of Origin Residences, mentioned that Florida is a protected state when it comes to increasing interest rates, which is encouraging for the market.
He added that "it is likely that interest rates will go down a little in 2024 and this will relieve the sector, making it more comfortable to invest in real estate.
Inventory reduction
Interest rates and rising prices are not the only challenges for Florida, as there is also a decrease in the availability of units; at the moment, the state has three months of inventory and in August of this year there were 28,971 new real estate listings, 10.8% less than in the same month of 2022.
Despite the potential lack of availability, international investment is expected to be a catalyst for the market, especially from Latin American buyers, who have increased their search for a second home in the area.
"Many Latin American investors are still looking to purchase new construction homes due to the low inventory of move-in ready residences. Even with the high interest rate, refinancing options can be explored further down the road," added Peggy Olin, president of One World Properties.
Likewise, Jeff Polashuk, regional vice president of real estate firm Compass Florida, noted that some cities may experience a decline in home prices in the coming months, especially those that were popular with remote workers during the pandemic.
"While many people moved out of major metropolitan areas to live in more suburban areas during the health emergency, the full return to the office is expected to prompt many to leave and seek housing closer to their workplaces that is more conducive to their lifestyle," the expert mentioned.
