A new data study determined that Florida home buyers are paying much more than they should for their properties, based on long-term pricing trends.
According to the Real Estate Initiative at Florida Atlantic University (FAU), all nine of the state’s nine measured metro areas ranked among the top 14 of the 100 most overvalued markets in the country. Buyers in third-ranked Cape Coral-Fort Myers paid Florida’s largest premium at 45.34%, followed by fourth-ranked Tampa at 45.18% and fifth-ranked North Port-Bradenton at 44.63%. Miami was the least overvalued of Florida’s metro areas, although it still ranked at a rather high 14th place at 39.38%.
As for the metro areas that came in first and second, those rankings went to Atlanta (49.71%) and Detroit (45.91%).
“It’s clear that higher mortgage rates over the past year have helped moderate housing prices in many areas of the country,” said Dr. Ken H. Johnson, an economist in FAU’s College of Business. “But consumers, particularly in Florida, still need to be wary of the current climate because those who buy now could end up having to hold onto the properties for years before values rebound enough for owners to fetch an acceptable profit in a resale.”
As for the state’s latest housing numbers, Florida Realtors today announced there were 26,161 closed sales of existing single-family homes in March, down 15% year-over-year, while existing condo-townhouse sales totaled 11,188, down 23.5% from March 2022.
For the first quarter of this year, the statewide existing single-family home sales totaled 59,554, down 22% from the same period one year earlier, while statewide existing condo-townhouse sales totaled 24,931, down 30.5% from the same quarter in 2022.
The statewide median sales price for single-family existing homes in March was $405,000, up 2.1% from the previous year, while the statewide median price for condo-townhouse units was $320,000, up 3.9% year-over-year.
In regard to inventory, active listings for single-family existing homes were at a 2.7-months’ supply while condo-townhouse inventory was at a 3.4-months’ supply for both the month of March and the first quarter.
“Florida continues to be a hot spot for residential purchases by buyers from both in state and out of state, and buyers are finding significantly more inventory available than last year,” said Florida Realtors Chief Economist Dr. Brad O’Connor, who nonetheless acknowledged “inventory does remain well below pre-pandemic levels in most Florida market areas. New listings continue to be somewhat weak compared to recent years, which is helping keep prices stable but also putting a cap on how much additional inventory we could potentially see in the coming months.”
Nonetheless, O’Connor sought to accentuate the positive by noting, “Although mortgage rates have remained elevated so far this year, they’ve also generally fallen in a consistent range. Consistency alone can be a comforting factor on the demand side in housing, as it reduces prospective buyers’ sense of uncertainty and makes them more comfortable wading back into the market.”