Florida Real Estate Market: Prices, Trends & Outlook 2023

The real estate market always seems to be changing and developing. That’s been especially true over the past few years, as plummeting interest rates gave way to an extended season of heavy market activity. Things have changed in recent months, and the market seems to be slowing down in many locations. When could things begin to pick up again, and what does this mean for the housing market as a whole? You’ll learn more about where the market currently stands and where things could be headed as you read this article. Hopefully, you’ll find this information especially helpful if you’re considering shopping for homes for sale in Longboat Key at any point this year.

As mentioned above, average prices are stalling – and even dropping slightly – in many locations throughout the country. Interest rates are usually around 4% on average, but they are currently close to 7%. It’s hard for potential buyers to feel motivated to shop for a home when mortgage rates are so high. It’s especially difficult when they could have purchased a home for a rate closer to two percent less than two years ago.
 
Inflation is another issue that is currently plaguing the housing market. Average inflation rates usually hover around 4%. Right now, inflation is closer to 8%, which represents a mark higher than at any point over the past 40 years. All of these economic challenges are coming during a time when people already have concerns and reservations about the overall state of the economy. With a rising cost of living and general uncertainty about the future, it’s easy to see why market activity is down in many places.

The market remains fairly competitive, with many homes selling quickly and some receiving multiple offers. This doesn’t change the fact that average home prices are dropping quickly on Anna Maria Island, and it’s hard to say when trends may begin to reverse. The Federal Reserve has expressed optimism that interest rates will come down in the near future, indicating that it would create a more favorable market climate for both sides. Most experts believe that inflation will need to get under control before the interest rate could come down, and it’s hard to say with any degree of certainty when this could happen.

Not necessarily. There is encouraging evidence to draw conclusions from, despite the current challenges that the market is up against. For starters, most believe that any recession will be mild and short-lived. Nobody expects the market to crash as it did back in 2008. It’s also worth mentioning that the market has faced significant trials in the past and always seems to come back stronger than before. Home prices have risen at a rate higher than inflation over the past 100 years, a time period that contained the Great Depression along with the recession of 2008.

Another statistic many experts will bring up in a conversation about the current health of the housing market is the mortgage delinquency rate. They believe this number sheds light on the overall condition of the housing market and reflects where things are headed in the short-term future. A higher mortgage delinquency rate would signal greater volatility or concern about the present state of the market. Right now, mortgage delinquency rates are lower than they have been at any point over the past 25 years. Current and potential property owners should be happy to hear this news.

The market is usually most active during the summertime. Once April and May come around, buyer activity starts to pick up. Some people are ready to use their tax refund as a down payment. Families with young children are hopeful that they can find a new home to move into once their children finish school. Everyone is excited about the prospect of loading and unloading boxes when temperatures are more pleasant. In September and October, things begin to slow down. The market can be pretty quiet from November to February. Homes will still sell during these months, but for lower averages than what you would see during the summertime. Don’t be surprised to see average prices rise in May and June and come down before the end of the third quarter.

While buyers and sellers will each experience a unique set of challenges in 2023, this doesn't mean that everyone should avoid the market this year. There are still advantages to hitting the market in this type of climate. Buyers will benefit from sales prices that are coming down and unlikely to rise again in the near future. Some may prefer to wait for interest rates to come down before they begin shopping for a home, but it’s likely that home prices will start to rise again around this time. You may not benefit from waiting to make a purchase as much as you might like to think.

Sellers can capitalize on prices that have risen significantly over the past few years far beyond where they were before. If you’re thinking about selling your home, you may consider asking your realtor to run a Comparative Market Analysis for you. This report will help you imagine what your home might be worth given recent sales of similar homes in your area.

Alexis Smith-Frady has the tools and expertise necessary to help her clients succeed regardless of what the market is doing. She is willing to work tirelessly to ensure that her buyers and sellers are informed and well-represented throughout the entire process. Reach out to Alexis when you’re looking for someone to help you with your upcoming sale or purchase.