How to Learn Where Florida Real Estate Prices are Heading Before You Buy or Sell
Thinking of selling your home in the state you now live so you can buy a home or condo in Florida? If so, knowing exactly where the Florida real estate market is now, and where it’s heading is extremely important. Why? There are many reasons, but here’s just a couple:
- About 30,000+- people move into, and out of Florida every month. Changes in the number of people moving in compared to people moving out can cause wild swings in Florida home and condo prices.
- It’s not common for Florida real estate prices to rise steeper and faster during booms and then fall quicker and farther than in most other states.
- Studies show a very high percentage of people who relocate to Florida will eventually decide their relocation was a mistake and want to move out of the state.
Why is This Important?
Because Too Many People Have Moved to Florida During Good Economic Times, Paid Too Much for Their Home, and Then Had to Sell at a Loss When Their “Florida Dream” Didn’t Pan Out and They Wanted to Leave.
When a higher number of people are moving to Florida, it’s easy to pay too much for a home during a strong sellers market when prices are high. If you later decide that moving to Florida was a mistake and you want to sell and move out of Florida, you may find yourself in a strong buyer’s market when Florida real estate prices are low. This can lead to a large financial loss. Florida real estate prices dropped an average of 60% during the last recession. Yes, the person who bought a $340,000 home purchased just before the last downturn, ended up with an “investment” that was worth only roughly $136,000 afterwords. Read further and I’ll explain how you can move to Florida and avoid this devastating trap.
However, if you move to Florida and buy a home when prices are low during a strong buyers market, then later want to sell and move out when prices are climbing steeply during a strong seller’s market, you could stand to earn a large profit. If moving to Florida turns out to be a mistake (over 12 million+ have already moved out) because it wasn’t what you expected, how bad could you feel if you got to leave Florida with $150,000 more cash in your pocket than you moved to Florida with? Best mistake you ever made, right? That’s why it’s extremely important to move to Florida the right way, just in case.
The 3 Common Florida Real Estate Markets and Which Ones Are Best to Buy or Sell In
1) A Balanced Florida Real Estate Market
A balanced real estate market is where both the supply and demand for homes and condos in a particular area is roughly equal. In a balanced real estate market there is about a six month supply of homes on the market.
A balanced real estate market is not something that usually happens for a long period of time in Florida. It’s usually just a threshold that is passed as Florida is transitioning from a buyer’s market to a seller’s market or vice-versa. The odds are that you will not likely move to Florida when it’s a balanced market.
2) A Florida Buyer’s Market
A buyers market in Florida happens when there are more people who what to sell (often to leave the state) than there are people who want to buy. During a buyer’s market in Florida there will be more than a six month supply of homes for sale. This means there will usually be a lot of homes to chose from in your price range.
Because the supply of homes exceeds the demand for them in a Florida buyer’s market, buyers can take their time when shopping for a home because homes will sit on the market for many months, possibly a year or longer without selling. Buyers may not want to be too eager to make an offer because sellers will often reduce their prices. Even if they don’t drop the price, more sellers are willing to entertain low offers because they have no idea how long it may be until the next offer comes along, if at all. And that offer may even be lower.
“The best time to buy in Florida is during one of the many frequent buyer’s market’s, when homes and condos are selling at steep discounts of 30% or more”
In a strong buyers market, you will notice more for sale signs appearing on more homes every week. Those new listings may also be priced lower than existing for-sale homes in the area thereby pressuring those older sellers to reduce their price in order to compete. Buyer’s markets can be lots of fun for buyers but not much for sellers and real estate brokers. The best time to buy in Florida is during one of the many frequent buyer’s market’s, when homes and condos are selling at steep discounts of 30% or more and there’s more homes coming on the market every day.
3) A Florida Sellers Market
A seller’s market is when there are more buyers looking for homes and condos in an area than there are properties for sale. When this happens, sellers can expect to sell their home in less that six months. In a strong seller’s market a nice home may sell within weeks, days or even hours.
When there are more buyers than available homes, prices go up. In Florida, it’s not uncommon for demand to far outstrip the supply of homes for sale and push list prices skyward. During a strong seller’s market you may notice fewer for sale signs in the front yard of homes every week.
Seller’s markets are not fun for buyers. Prices are high. There is less inventory to chose from. Buyers may feel pressured to buy now because if they don’t prices may even be higher next month. During strong seller’s markets, many buyers may end up paying far more than they want for a home they really don’t like very much, simply because they believe it will be even worse if they don’t act now.
“When inventories get low and prices shoot up fast, this can be the worst time for a buyer to make a purchase in Florida because a real estate bubble may be forming. This is where I see the Florida real estate today”
Strong Seller’s markets are fun for sellers, real estate agents that can still successfully compete for listings as inventory gets scarce, flippers (investors that buy homes, do no or minimal improvements, then jack up price and put it right back on the market) and new construction builders. When inventories get low and prices shoot up fast, this can be the worst time for a buyer to make a purchase in Florida because you may be buying in a real estate bubble right before it is about to pop. This is where I see the Florida real estate today. In bubble territory, right before it pops.
How to Learn Where Florida home Prices are Heading in a Specific City or Town
- Go to Realtor.com
- Put in the name of the city you are interested in knowing where home prices are heading, and hit enter.
- A page of listings will appear. Scroll down past the listings until you see Facts about “the city you entered on the previous screen”
- You will see a Median list price for the city, and an arrow pointing up or down. This indicates if home prices are currently heading up, or down, in that particular Florida city.
- You will also see Median Days In Market and an arrow. If the arrow is pointing down, prices will likely be rising in the future because homes are selling quicker and vice versa.
- You will also see Active Listings and an arrow. If the arrow is pointing down, this is another indication that prices will likely rise in the future. This is because the number of homes for sale is decreasing and vise versa.
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Ron Stack “That Best Places Guy”
- Want to be certain if moving to Florida is right for you or your family? You’ll know after reading the Florida Move Guide.
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Hi, Ron.
Thanks for great blog, I am 30+ years old and I own 2 town houses without mortgage in South Florida (Plantation, FL).
Like you’ve said, I bought in cash the 1st one (where i live) in 2010 for 100k that were selling in for 250k in 2006 and again i purchase another one in the same community in 2014 for 150k cash as rental income. (now they are selling for 190-200k)
*fully remodeled was selling for 225k on Nov. 2016
I am thinking on moving to a larger home now and rent my townhouse to help pay for the mortgage. My question is what would you do in that situation since prices went up on single family home average 3/4 bedroom in decent place are 385k-450k?
Should I buy high and sell high one of the townhouses? Should I buy high and rent both? or Should I just wait for the next “pop”?
I am planing on buying single home with 20% down and the rest with mortgage and I remember after the 2008 market crush the banks didn’t give mortgages so what will happen again if I wait and banks will not give me mortgage? I will not be able to buy unless i have cash. Am I missing something? What would you do if you were investor and home buyer at the same time?
Thanks!
Happy New Year!
(01/03/2017)
Hello Tom,
Only you can decide what is best for you and the right course of action to take. What I may do may or may not be of any help. The first thing I want to clear up is the notion that banks stopped doing mortgages during the last housing crisis. Banks, mortgage companies and other lenders did not stop giving mortgages, the just stopped doing the ones that should have never happened in the first place. They never stopped giving mortgages to people who qualified income and credit-wise who were buying a home that actually appraised for its true value.
1) Is it a home or an investment? I always consider the investment aspect of any purchase of any asset, especially if it costs hundreds of thousands of dollars. If I move in and out homes frequently, they are more investment than home.
1) I would never buy real estate during a strong seller’s market. It’s called a seller’s market because the seller has the buyer at a disadvantage. If inventory is low and prices are high, that’s a good indication that you’re in a seller’s market. This is the time to sell, not buy. Only buy low, only sell high if you’re going to sell.
2) I would never buy any asset (like real estate) if I expected the price to drop shortly after the I purchased. I would wait until after it drops, then buy. Again, buy low, sell high.
3) I would never borrow money to buy an asset when I thought there was a good chance that the value of the asset would drop below what I owed on it. I wouldn’t put $100,000 down on a $400,000 home, then borrow $300,000, if I felt that 2 years later the home likely would only be worth $300,000 because at that point my $100,000 cash down turned to $0. I would have to turn in my investor badge.
4) I would never allow low interest rates to entice me into making a foolish decision.
If someone is in a good financial position because they bought low when no one else was buying, why would they now do the opposite of what they know works? Good luck Tom.
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Ron Stack
Thanks for clearly few good points!
I Think will be best for me to hold off on purchase house high and wait for the “pop”
With that been said, I was still hoping to get some of your insight on this possible move which I call “upgrade”. my house where I live as I said is worth 200k and I purchased it for 100k.
Buying a house for 300k and selling mine for 200k will make sense since my total investment will be 200k now and in case price drops my money is still safe. (Unless it drops more then 33%). Is that make sense ?
I understand the idea of buying low and sell high and not to buy something base on emotions or low rates but I don’t think I can sell and rent until price drops again.
Thanks again,
Tal.
Hello again Tom,
You asked for my thoughts, I gave them to you. You know what the best move most like would be if you were looking at this strictly as an investment. It seems to me, the reason you’re “conflicted” is that emotionally, you want to do something contrary to that. On an emotional level, you want a bigger place to live and you can afford it now (because of investments made that paid off). If you strongly want to do something based on emotion and can afford it, are aware of the possible downsides and are willing to risk that, then just do it. You don’t need any outside blessing of any uninvolved party because only you will benefit from the emotional high and you’ll own the financial consequences, positive or otherwise. You indicated you would be OK with a drop of 33% on a larger number, so isn’t that proof this is an emotional purchase of a home and not a real estate investment?
Take for instance, buying a car. Maybe the best “investment” according to Consumer Reports would be a boring sedan that is great on gas mileage, safer in crashes, holds it value better, is reasonably priced, etc. However, the car you really want isn’t good on gas, isn’t the safest, in much more expensive and will lose more value every mile you drive it, but guess what? That’s the car you really want because it’s fast and it’s looks turns heads. Is it the best investment? Absolutely not. But do you want it? Absolutely. Why? Emotion. Good luck Tom.
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Ron Stack
Hi Ron
I have been relocated to Melbourne FL with my Company from Long Island NY. We are selling our home in NY and hope my wife and the kids can move down with me by the end of this June. We are looking to buy a new built or resale home in Viera (Brevard County). I read your articles and see that the best option for us is We should be renting in FL for now and waiting for another year or two to see how the real estate market will be before we can make a good decision on buying. What’s your suggestion?
Thank you
Thanks for your reply. I appreciate your time.
Hello Robert,
Thanks for sharing your experience. Florida 2018 is much like FL 2005, badly inflated home prices. However, the problem is that everyone who moves to Florida truly believes they will stay forever. However, my experience of talking to 1000’s of SELLERS in Florida and actual statistics show that a very high number will end up deciding that Florida was a mistake, want to sell and move back. Too often they want to sell in the years after the bubble pops, before things start to rise again. Then they get mad at their agent their formally $300,000 home they have a $240,000 mortgage on, is only worth $150,000. Believe me, agents would rather get you that $300,000 because that pays a higher commission.
But you can’t get $300,000 (or finance that) when the value is now only $150,000 because all of the other formally $300,000 homes are now on the market for $150,000. Then they either just walk away from the home (it then goes into foreclosure further depressing prices) or they stay and pay and are miserable…for 10 years until prices reach the top again.
Again, thanks for taking the time to comment Robert.
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Ron Stack
I have started building a house in Florida in September of this year. From what I am reading I should walk away and wait for the prices to drop because when the home is finished in early 2019 more than likely the price of homes will drop sharply in 2019 during the next inevitable recession. Do you agree?
Hello J b,
I found that for me personally, it’s always better to thoroughly research (due diligence) a subject before making decisions, than after. Additionally, when I enter into an agreement with a party, I would never consider making any changes to it until getting appropriate paid professional advice on the matter. Please note that I do not provide legal or any other type of professional services on this website. Good luck J b and have a nice day.
I am one of the unfortunate ones who bought a very “overvalued” property in SWFL in 05’/06′ at the urging of real estate agents, appraisers and friends who owned property in the area. Looking back now we should have all seen the signs but literally NOBODY knew the catastrophe that was just around the corner.
The story was the same, “hurry up and buy now before the prices get totally out of reach” so I put $100,000 down (which I had made off of a previous property that I bought and then sold only a year later for double what I paid for it) on a $500,000 gulf access canal property. A year later I was told that it was worth $650k. Woo Hoo! Then the slide started, and continued for YEARS. At one point in about 2011 my appraiser friend said that if we could find a buyer at all, We’d be lucky to get an appraisal of $225k. In 2014 we had to move due to relocation and the property was finally sold in a short sale for $275k.
Fast forward 4 more years and those same properties have shot back up into the $400,000+ range again. I don’t know what is going to happen this time, but I can tell you that for a victim of the last crash that lost a massive amount of money, I’m very leery. I am now moving back into the same area for work and don’t know what to do. Rent is sky high, sale prices have shot up and I feel like it’s 2005 all over again.
I am seeing a lot of price reductions on Zillow over the last few months and there are places that are sitting on the market for extended periods so maybe a correction is already starting. That’s how it happened last time as well. In hindsight it seems like the crash happened overnight but in reality it was a slow skid that everybody though was going to end any day. A downward skid that actually lasted about 5 years.
Another person, I’ll call him John, that mistook owning a home for owning a self-filling ATM machine and then tries to portray himself as a victim. Taking you at face value that you sold a home for (I’m guessing) approximately 216 K and netted 100K after expenses and commissions when the market was hot, the next thing you did was get greedy, thinking this was easily repeatable and that all you had to do spend MORE money and buy a bigger home and you’d begin making obscene amounts of profits on home sales. I mean, the sky’s the limit right? You state that you were “told that it was worth $650k” – what does that even mean??? You know what something is worth? What one agrees to sell for and another agrees to pay without influence or interference on or by either party.
First, I’m not John. My wife and I were first time home buyers in 2005 when we had saved 35k as 25 year olds, 4 years married, working our tails off. We, like John, were told if we didn’t buy a house then we would be priced out of Florida (Orlando specifically). We purchased a house for $185k that, like many of the houses at the time was literally going up about $4k per week. They financed us with a first and second mortgage, the second being a HELOC. $140 on the first, $26 on the second after closing costs. In two years we paid off the HELOC in full and also $5k toward the principle of the $140. Both were ARM loans but neither were subprime. Our credit at the time of buying was in the high 700s/low 800s and we had zero debt. We short sold that house 7 years later because the neighborhood was unsafe and because we would have never gotten out of the house. The house sold to an investor for $95k…yes, that’s $95k, not $195k. The bank made us bring $3k to the table in order to agree to forgive the remaining debt.
So, Vince, the housing crash had many faces and I would invite you not to be a COMPLETE ASS and assume everyone was greedy. We all made the mistake of putting our trust in investors and realtors who said “bull market” all the while knowing or not knowing all of the subprime loans the banks were packaging up as investments behind our backs. I would have never in a million years not paid my debts but we didn’t have a choice and knowing the banks were behind the demise, it became much easier to ask them to participate in the suffering. Housing, like healthcare, is the Wild Wild West in this country and no one on either side in Washington has had good answers and consequently families in this state now willingly pay $1500 rent for modest 3 bedroom residences in mediocre communities with no relief in sight. That is absolutely insane.
Since you decided to pompously chime in, I thought I’d set you straight. Here ends the lesson. Back to the city of self-righteousness for you.
Has the 2018 hurricane season had any impact on housing prices?
The short term effect of hurricanes on housing prices in Florida is different than what happen in the long run. However, right now there are so many “moving parts” that affect whether prices will rise or fall, it’s harder than ever to predict but overall things are heading south.
1) Continually rising interest rates always normally =’s lower prices as people can no longer afford the monthly payments to buy overpriced homes. – for housing.
2) But the FED did not raise rates as expected at it’s last pow-wow as it said it would. Temporary + for housing.
3) We are overdue for a recession but this current economic expansion has become like the energizer bunny due to recent government policies that have extended it past it’s expiration date. + for housing
4) Gas prices were heading up fast, talk of $100 a barrel oil, but now it’s dropped to around $50 from over $70. + for housing
5) Hurricanes & flooding obviously are terrible for housing long term because less people will move to Florida to replace the 1000 a day that leave. Higher insurance rates due to larger losses make homes less affordable. But hurricanes can be good for home (and rental prices) in the short term. +- for housing short term, – in the long run
I will be adding some links in the above article to news stories about Florida price reductions. When (not if) this expansion ends and another recession happens it will be like 2008 all over again in transient states like Florida for housing prices.
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Ron Stack “That Best Places Guy”
I still don’t see this setting up anytime soon for a bust. I would love to see near to top and sell. What I see is a huge build out in commercial. Creates lots of jobs. People are working. Trump wins in 2020 and the economy continues strong for some time after. Rates are still low and they seem to be managing rates very carefully. My house continues to increase in value and there are zero houses for sell in our community. So maybe in a few more years. But not now. I do think that this feels nothing like 2006.
Oh and remember, the bottom was not until 2012. It took six years to hit bottom. So when the peak is met and prices start to fall, it isn’t like you can rush out and get a good deal. You will have to wait.
Hello Paul,
You Wrote:
1) “My house continues to increase in value and there are zero houses for sell in our community.”
But you also wrote
2) “I do think that this feels nothing like 2006.”
Think about it Paul, isn’t what you described about today in #1, EXACTLY what was happening in 2006?
You also wrote: “Oh and remember, the bottom was not until 2012. It took six years to hit bottom. So when the peak is met and prices start to fall, it isn’t like you can rush out and get a good deal. You will have to wait.”
I disagree. An expert in this space can find homes to flip at a profit even in a difficult market as prices are heading skyward with low inventory. It’s far easier to get a nice homes at a huge discount without having to wait for the “bottom”, when prices are heading south in Florida. Besides, no one knows know when the bottom has been hit, until after prices have already started to rise again.
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Ron Stack “That Best Places Guy”
Thanks for the report.
I lived the experience in 2008 when I bought my home and lost 35% of my home. Just moved to Florida 1 year and a half ago in 2017 and truly experiencing PTSD since I am in my mind 40s and cant afford another financial loss.
Your report on this housing issue in Florida and other areas has help me to decide and keep put. I’ve been renting for for 1 year and a half and will keep renting for now.
Excellent housing reporting!
Thank you
Hi, Ron,
Happy March 2019! (although in Chicago today, it feels like January, with below-zero wind chills).
Wanted to get your thoughts about where the Florida real estate market is heading these days. Our daily checking of the Brevard MLS website reveals that prices are still crazy high. With the Fed chairman caving on raising interest rates (he calls it being “patient”), the stock market doing so well (at the moment), the economy at least appearing to be robust, and with at least some people relocating from high SALT states to FL, NV, and TX (just read your new page on that subject today), has your prediction timeline for the bubble burst changed?
Thanks,
Steve
Hello Steve,
This current economic expansion is the now the longest in US history, so yes, I’ve had to adjust my timelines in the article.
When agents put listings in their local MLS, they get auto-populated to Realtor dot com. If you go to that site and put Brevard County in the search box, at the bottom of the page of listings that appears after hitting enter, scroll down to the “facts about” heading. I think you’ll see that that median prices are heading down and inventory is increasing. If the days on market starts to increase while inventory continues to grow, prices will go down at a faster pace. It will probably take the next recession to bring about the 50% off sales event.
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Ron Stack “That Best Places Guy”
Ron, I don’t think it is going to happen like that. No 50 percent clip. Maybe 25 percent.
Hello Paul,
You wrote: “Ron, I don’t think it is going to happen like that. No 50 percent clip. Maybe 25 percent.”
So you think it’s going to happen differently because…why??? Are you someone in with years of buy/sell or broker experience in Florida, with data to explain your prediction? Or is your comment based on your experience of having bought one home (that you haven’t yet tried to sell) in Florida that you still live in, and what you see happening as a homeowner in your neighborhood? Don’t get me wrong, all comments are welcome, but it would help readers to know what the basis was used to arrive at your prediction. Thanks for the comment.
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Ron Stack “That Best Places Guy”
I’m thinking of buying in Orlando now but it is completely a sellers market. Big time. But interest rates are extremely low as well ( can get 2.75 for 30 years). Have been looking at houses in Orlando in the mid 200s so my payment after 20% down before taxes and insurance would be somewhere between 800 and 900 a month. Do we still see prices tanking considering interest rates are so low?
Hello Mike,
I’m writing this on 11/15/2020. As of today we have a disputed election, possible covid worsening which could bring more lockdowns and more stimulus money to banks, businesses and more checks sent to individuals. To put it mildly, this year has not been normal making it next to impossible to predict where home prices in Florida are heading. Normally, recessions cause a steep decline of buyers in Florida and sinking prices. Sending money to directly to every adult and paying $600 a week extra to the unemployed prevented that, is completely new and together with trillions to banks and corporations, it has allowed the bubble to inflate further. This is artificial of course and will have to end sometime. The US can’t print new money forever.
This stimulus or something similar may be repeated soon, and depending on who the president is at the end of January 2021, the recently new $10,000 limit on deductions on federal tax returns may be repealed, taking us back to where we were before and therefore provide people less incentive to leave high tax states and head to places like Florida.
The picture of what will happen to Florida home prices may become much clearer in spring 2021. I’d only move to Florida now if I knew I was never going to sell it and therefore wouldn’t need to worry about prices dropping and having/wanting to sell when the house is worth less than what was paid/owed. Unfortunately, almost everyone moving to Florida thinks they’ll love it and never leave, but a large percentage eventually do.
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Ron Stack “That Best Places Guy”
Hi Ron:
I’m coming up on 60, wife early 50s. Gonna work a couple more years and 63ish retire to Florida where I lived back in the 90s. Seems the Gulf has less crime, nice coastal communities. If things time out properly and FL property drops in the next year or two (and remains low for a few years after that) we might be able to get a good deal on a condo or small house. We like Naples. We know it’s pricey but already see some properties there that aren’t bad.
Any thoughts on condo vs. owning maybe a small home with a small yard, low maintenance?
-Gary
Hello Gary,
It took an entire chapter to cover this topic in the Florida Move Guide so I can’t appropriately fit that into a comment response here, but the choice is critical to a successful relocation. What I will say is that too many retirees moving to Florida get that choice wrong, then sell and buy again to try to get it right while losing a lot of money in the process. This often happens because just like the decision to retire in Florida, too many people compare only the pros of one choice, to only the cons of the other. I’ve sold plenty of condos in Florida so people can move into a single family home and vice-versa. In any case, if someone buys a home or condo in Florida during a buyers market when home prices are down, and then waits until a sellers market to correct a “wrong home” choice, it makes everything a lot easier. Some have even made money correcting a mistake, but that was rare because most buy during a sellers market and pay too much.
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Ron Stack “That Best Places Guy”
Very good suggestions.
With many areas of Florida at 30% over evaluation, normal economic stabilization would be a 30% off sale.Recession? ???? Getting a forcast from a Realtor is called the Florida SNOWJOB.
The article has nothing to do with “getting a forcast from a Realtor”. It’s about the exact opposite of that. The article shows how consumers, on their own without any imput from an agent/broker, can see the current direction of the market and determine where home prices are likely going, based actual statistics of the local housing market publicly provided by the National Association of Realtors. The exact steps to take to learn where home prices are heading are at the bottom of the article.
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Ron Stack “That Best Places Guy” of Zeus Press Inc
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