Florida’s housing market, which has seen prices soar since 2020, may be entering a cooling phase that could benefit prospective homebuyers, according to a new real estate data analysis.
A study by Parker Labs of more than 1,000 U.S. housing markets identified 15 metropolitan areas most at risk of price correction, 13 of which are in Florida, signaling a shift in the state’s real estate landscape.
do not miss it:
The analysis found a growing imbalance between supply and demand in Florida’s key markets, placing the state in a high-risk category.
Pensacola (in Florida’s Panhandle) leads the way with a 52% increase in housing supply and a 28% decrease in demand. In the southwestern part of the state, Northport follows Pensacola with a 50% increase in supply and an 18% decrease in demand, while Naples has a 44% increase in supply and a 14% decrease in demand. On the East Coast, Port St. Lucie and Palm Bay are showing similar trends with supply increasing 40% and 39%, respectively, while demand is decreasing 22% and 18%, respectively.
Oversupply and lack of demand are starting to affect prices, according to the report, with Northport seeing 52% of listings being cut in price, followed by Tampa and Naples, which saw price cuts of 49% and 46%, respectively.
“When inventory grows faster than demand, prices are eventually forced to adjust,” Hannah Jones, senior economic analyst at Realtor.com, said in a recent report. “Increasing inventory levels are a sign that the market is beginning to balance.”
trend: The Jeff Bezos-backed startup Become a homeowner in just 10 minutes. All it takes is $100.
Other Florida markets are seeing price corrections. Lakeland, where prices have increased 51.36% since March 2020, is now down 4.63% from its all-time high. Sebastian, where prices have increased 61.43% since 2020, is now down 4.14% from its all-time high. Gainesville and Deltona are showing a similar pattern, down 2.28% and 1.96% from their all-time highs, respectively.
Parcl Labs data found that new construction is having an impact: In Ocala, more than 20% of new listings are new construction. In Crestview and Pensacola, more than 12% of new listings are new construction, indicating that an influx of new listings is giving potential buyers more options.
The surge in supply comes as Florida struggles with other market pressures: Recent increases in home insurance premiums and property taxes have made homeownership more expensive in the state.
While this trend may be a concern for current homeowners, it may also represent an opportunity for those who have been priced out of Florida’s competitive market in recent years. The combination of increasing inventory, more frequent price cuts, and the start of price corrections in some areas could signal a shift toward a more balanced market.
Despite these trends, the state’s housing market remains strong overall.
State home prices rose 3.1% year over year in May, to a median of $419,700, according to Redfin data. The number of homes sold in May fell 2.9% year over year, from 39,521 in May 2023 to 38,363 in May 2024.
Homes are also staying on the market longer, with the average number of days to sell increasing from 42 to 55 days over the same period, suggesting a gradual shift toward a more buyer-friendly market even as prices continue to rise steadily.
Read next:
Up your stock market game with Benzinga Pro, the #1 “News and Everything Else” trading tool in the “Active Investor’s Secret Weapon” – Start your 14-day trial now by clicking here.
Want the latest stock analysis from Benzinga?
This article, “Experts say these signs point to more affordable housing coming in Florida’s top markets,” originally appeared on Benzinga.com.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
