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2023 Florida real estate market update – will it crash or will it not?
2021 and 2022 have been red-hot years for the real estate market in Florida. In 2022, according to Florida Realtors data, the median price for a single-family home went up + 15.7% and it went up +21.6% for condos and townhouses. The million-dollar question is: will the Florida real estate market crash in 2023 or in the coming years? Well, so far it hasn’t.
Early Jan-2023 at the 2023 Florida Real Estate Trends summit, Florida Realtors® chief economist Brad O’Connor predicted the prices would relax a little in 2023: “We expect the state’s residential real estate market to return to a more typical pace. I believe 2023 will look more like the ‘traditional’ housing market years of 2018–2019 in Florida as supply and demand become more balanced.”
He wasn’t wrong: in 2023, home prices in Florida are almost flat compared to last year. According to Zillow, the average home value is 392.922$ in Florida (+0.7% vs last year). In comparison, it is 473.700$ in Palm Beach County (+2% vs last year), and 467.700$ in Martin County (+2% vs last year).
We also see more inventory on the market in 2023, but still not enough to reach a balance point: it is still very much a seller’s market. Overall in Florida by December-2022, the month’s supply of inventory (also called absorption rate) was 2,7 months, the highest it had been in nearly 2 years: this data represents the time it would take to sell all the properties listed on the market at a given moment. 2021 and 2022 saw extraordinary lows of 1 month of real estate inventory, so 2.7 months is significantly higher but a good balance sellers-buyers would be closer to 5.5 months.
For my geographic zone in Palm Beach Gardens, the median price for houses sold year-to-date 2023 (grey line in the graph) in MLS is 670.000$ with a peak in September at 800.000$.
In Palm Beach Gardens, the absorption rate in 2023 is around 4.2 months, so it is getting closer to a balanced market.
Each real estate agency can provide their own data, so prices can be slightly above or lower, but Zillow prices give us a good idea of the average estimate. Zillow estimates (October-2023) show an average home value of 654.600$ (+2.1%) in Palm Beach Gardens, and they go to pending quite fast in 30 days. As a comparison, the average home value in Jupiter is 685.500$, +1% versus last year, comparing quite high versus 388.000$ in Stuart (+2.6%) and 392.400$ in Port-Saint-Lucie (-2.2%). For all three cities, houses go to pending fast, in 17-22 days on average. In Jupiter, some homes get multiple offers, which is still quite rare in Palm Beach Gardens.
To conclude, in 2023 we see less transactions and more properties for sale, but this is still a sellers’ market. For those who are waiting for the prices to drop drastically, they may have to wait for a long time. The market is slowing, but prices remain stable. With a high interest rate, the number of transactions in 2023 is down by approx. -15% to -20% according to different sources. But sellers are not willing to reduce the prices, and the market will not collapse unless there is a high number of properties that would arrive massively in the market all at once, like what happened in 2008 for very specific reasons (foreclosures, and excessive supply of newly built properties).
This scenario is unlikely today and so, it might not be a good idea to delay your real estate purchase. If and when the interest rates go down in the future, there is a possibility for a sudden housing price surge. If you feel you are ready to become a new homeowner in Palm Beach Gardens, the Palm Beaches and Martin County, reach out to me: Veronique Howley, real estate agent at Coldwell Banker realty, +1 (772) 530-2458.
