Florida Housing Market Warning Issued

As Florida sellers slash the prices of their properties in an attempt to attract reluctant buyers, local realtors say this might be the right time to purchase a home in the Sunshine State.

Read more: How To Sell Your Home

As of February 29, the average Florida home value was $392,306, up 3 percent over the past year, according to real estate company Zillow. That was above the national average of $347,716, up 3.6 percent year-on-year.

While home prices in the Sunshine State remain high compared to the country level, the vertigo-inducing growth that characterized the pandemic year has lost pace, presenting a good opportunity for aspiring homebuyers waiting for the right time to buy.

The state's housing market has experienced an explosive boom since the pandemic, with the average home value going from $240,308 in September 2019 to a peak of $385,360 in September 2022. While prices dropped modestly between the end of summer 2022 and spring 2023 during the so-called correction of the housing market, they've since started to climb back, albeit at a much slower pace than they had in the previous three years.

This slowdown is largely in line with Zillow's prediction for 2024 that home prices would soften in Florida, enhancing affordability for potential homebuyers. Newsweek contacted Zillow and Florida Realtors for comment by email on Thursday morning.

Sam Yaffey, a Cape Coral-based realtor, told NBC2 that now is the time to buy in the state, as inventory has increased and mortgage rates are not expected to rise further.

"We've got a little bit of a hangover with the hurricane [Idalia in August 2023], with people having to repair their homes before they could sell them and a whole bunch of things like that. So, we have a sudden increase in inventory once everybody suddenly got their houses fixed," he said.

Read more: First-Time Homebuyer Guide

Yaffey warned that homebuyers should not risk waiting any longer. "If they wait when the interest rates drop, all the buyers that have had uncertainty are going to swarm in, and then the sellers will probably be in a multiple offer situation," he told the channel.

Newsweek has been monitoring the price of homes listed for sale on Zillow in the past month in Florida, noticing the increase of motivated sellers and properties which have had a price reduction.

As of March 4, there were 47,335 homes listed on Zillow with a price reduction out of a total of 202,463 properties listed by agents on the real estate marketplace. Among properties listed by owners or others, 1,167 out of 8,654 had a price reduction.

A month later, on April 4, there were 50,401 homes listed on Zillow with a price reduction out of a total of 206,059 properties listed by agents on the real estate marketplace. Among properties listed by owners or others, 1,111 out of 8,942 had a price reduction.

These numbers show the increase of inventory mentioned by Yaffey, which is also due to the fact that many homeowners who were holding on to their properties when mortgages were really high now feel more comfortable selling. Florida, along with Texas, has also been among the states to build more new homes in the entire country in the past year, in an attempt to address the supply shortage which is keeping prices high.

Still, relatively high prices, together with the skyrocketing cost of home insurance in the state, are still preventing many Florida homebuyers from being able to afford purchasing a new property.