Ocala Housing - April 2024
Florida's Housing Market Faces Challenges as Inventory Rises and Demand Shifts
Florida's housing market is experiencing a significant shift as the state grapples with rising inventory levels, changing demographics, and economic uncertainties. According to the Florida Realtors agents' association's April 2024 market report, while median home prices continue to rise, the pace of growth has slowed, and the market is showing signs of stabilization.
The report reveals that the median single-family home sale price in Florida rose to $429,900, a 4.9% year-over-year increase, while the median townhouse and condo sales prices reached $335,000, a 3.1% year-over-year increase. However, these price increases are more moderate compared to the frenzied market conditions witnessed in recent years.
One of the most notable changes in Florida's housing market is the surge in inventory levels. The statewide active listing inventory for single-family homes has increased by 52.9% compared to April 2023, reaching just over 89,487 properties. This rise in inventory can be attributed to several factors, including demographic shifts and economic uncertainties.
As early-stage baby boomers who moved to Florida more than a decade ago begin to pass away, their properties are entering the market. Additionally, widows and widowers often choose to downsize or relocate, further contributing to the growing inventory. This trend is particularly evident in popular retirement destinations across the state.
Furthermore, the combination of rising interest rates and the increasing cost of living has caused some potential buyers to pause and reconsider their plans for moving and retirement. Late-stage baby boomers, who are approaching retirement age, are especially impacted by these economic factors, leading to a slowdown in demand.
While closed sales remain lower than pre-pandemic levels, they are holding steady. The typical single-family home that sold in April spent about 35 days on the market before going under contract, which is 13% longer than a year ago but comparable to market conditions in April 2018. That said, a "one size fits all" economic analysis does not hold water. For example, where there are a grouping of 55+ retirement communities and extensive new construction of amenity galore communities, resales are struggling.
The supply of single-family existing homes statewide has increased to a 4.2-months' supply, moving closer to the benchmark of 5.5 months, which indicates a balanced market. However, the months' supply inventory for townhouses and condos has reached 6.9 months, a staggering 97.1% increase from April 2023, a potential true oversupply in this market segment.
Investor activity remains strong in Florida, based on "cash" sales. Cash sales are more common among well financed investment companes, and cash sales accounted for 30.1% of all single-family home transactions and 54.9% of townhouse and condo sales in the past year. This high level of cash purchases indicates that investors continue to view Florida's real estate market as a valuable investment opportunity, despite the changing market dynamics.
Once again, Florida's housing market is undergoing a significant transformation as inventory levels rise, demographics shift, and economic factors influence buyer behavior. While prices continue to appreciate, the pace of growth has moderated, and the market is showing signs of stabilization. Real estate is always about trends, location, market conditions, and demographics.
