Real estate across the Sunshine State for condos and homes is experiencing a slowdown in sales and a drop in prices.
This comes after the COVID-19 pandemic powered a desire for Florida housing, pushing prices up and out of reach for some residents. In April, there was a double-digit drop in the pace of condo sales, and in general, it's been dropping since last summer.
According to Juan Arias, the director of market analytics at real estate data firm CoStar, condo sales were down 20% in April in Hillsborough County. He added they were also down 21% in Miami-Dade County, down 15.5% for Southwest Florida in general and down 27% in the Panama City area.
"I think we are beginning to see the real pain in the condo market right now," Arias said.
Brad O'Connor, chief economist with Florida Realtors, told "The Florida Roundup" that condos are facing factors such as high mortgage and insurance rates, which have also affected the single-family home market. Then, on top of that, they have association fees rising to meet new reserve requirements following the deadly Surfside condo collapse.
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In terms of single-family homes, the pace of sales of existing homes compared to a year prior has been falling since February, and median prices dropped by 4% in April. This can prompt concerns about home value.
"We remain over 50% higher than where we were at this time in 2020, still 4% is the largest year-over-year percentage decline," O'Connor said. "We've observed for Florida's single-family home prices going all the way back to October 2011, so it's worthy of our attention."
O'Connor added that affordability continues to be the No. 1 issue impeding sales growth across Florida.
On "The Florida Roundup," host Tom Hudson spoke with three journalists across the Sunshine State to get some insight on different market areas.
They were Southwest Florida Business Today publisher Karen P. Moore, Tampa Bay Times reporter Rebecca Liebson, and Jacksonville Business Journal Managing Editor Stuart Korfhage.
Southwest Florida
According to Moore, the sales slowdown is different compared to the housing crash, which began to see impacts around 2006.
"It's a different set of factors that are out there that are influencing the economy than in 2006 when the bubble burst," Moore explained. "So I really think we're not in the same situation, and I do think there's more safeguards in place for that. There are some of those same red flags, but it's not the same situation."
What Moore said is similar to over a decade ago is the fluctuation of the housing market.
Moore also explained that realtors said there were deals on the table that would go away after hurricanes devastated areas.
"And then when you have the back-to-back hurricanes and that damage is occurring to those same geographically located homes, they did lose deals," Moore said. "You did have some skittish buyers inland as well."
And for condos, Moore said the southwest Florida market is still recovering from Hurricane Ian and even the deadly 2021 Surfside condo collapse. Moore added that homeowner associations were not prepared for the recovery and insurance issues.
"I think especially in the coastal condo properties, those are going to take the longest to recover here," Moore said. "They are the ones that are lagging the most in southwest Florida, and the factors just don't seem to be lining up to help them recover any faster. It's going to be a slow recovery for the condo market, I think."
Tampa Bay region
Liebson said that back when the COVID-19 pandemic happened in 2020, there was a boost in sales.
Liebson said this is because there were historically low interest rates that people were getting that were sometimes even 2% or 3%.
"When you're offered a loan for so little, you really can't turn that down," Liebson said. "It influenced a lot of people to kind of jump into the housing market."
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But since rates have now returned to around 7% to 8%, people have been more hesitant to buy a house, Liebson said. This is especially because prices have gone up since the peak pandemic era.
"So financially, it's just not making as much sense for a lot of people," Liebson said.
In terms of any potential for a housing market collapse, Liebson said it's too soon to predict or say anything about it.
"I mean if I could predict a housing market crash, I'd be a billionaire," Liebson joked, adding that things have slowed, but people are still buying.
Liebson said that in this current market, people aren't buying a home unless they really need to, compared to the pandemic, where people were purchasing because it was a good deal.
In terms of the Tampa Bay area following the 2024 hurricanes, Liebson said there was a "decent bump" in homes that were selling in the months are the storm. These were homes that needed a gut job and were being sold to those who flip and renovate houses. And even still, there weren't as many homes as you'd expect to be sold, she said.
"I think it is tough for people that have storm-damaged homes," Liebson said. "I think we'll probably continue to see more sales, but it definitely wasn't like a rush blood of those houses on the market."
Northeast Florida
In Northeast Florida, there have been decreases, but it's on the smaller side.
Korfhage said that Realtors have said that any decrease has been more of a correction.
"Nothing's falling off the cliff here," Korfhage said. "It's not like people don't still want to move here. It's just that things are not at the peak anymore."
Korfhage told Hudson that we're getting closer to a balanced market.
"What agents are telling me is that buyers are still thinking that it's become a buyer's market, and sellers are still thinking that it's a sellers' market," Korfhage said.
The journalist added that one of the reasons why the market has slowed a bit is because buyers and sellers are having a hard time meeting in the middle — which is the only way you can get a sale.
Korfhage added that inflation is believed to be one of the factors fueling the slower market. The journalist said the area had a lot of people moving from other places and that northeast Florida was a real bargain.
"But if you've been here for 20 years or your whole life or whatever, those numbers don't look so good," Korfhage explained.
There are typically no longer the same competitive situations, like 20 people make an offer on the same week, and all cash is involved.
"People are doing their due diligence. It's slowing things down and not necessarily in a bad way," Korfhage said. "You can look at the numbers and they're not catastrophic. They're just edging off the peak."
The journalist added that people are having trouble coming to grips with how interest rates aren't going to suddenly drop to 3%, along with other factors. In addition, Korfhage also said that insurance rates are going up. This means something like the age of your roof and whether a company will insure it can change the dynamic of a transaction.
Overall, Korfhage agreed with the other journalists that from the insight they've gotten, nothing suggests a housing crash.
"But of course, none of us are fortune tellers, and neither are the agents that we've been talking to," Korfhage said.
This story was compiled from interviews conducted by Hudson for "The Florida Roundup."
