Experts Say These Signs Point To Affordable Housing Ahead In Florida’s Key Markets – Benzinga

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Florida’s red-hot housing market, which has seen prices soar since 2020, may be entering a cooler phase that could benefit prospective homebuyers, according to a new real estate data analysis.

A study by Parcl Labs covering over 1,000 U.S. housing markets identified 15 metropolitan areas at the highest risk of price corrections — 13 of them are in Florida, suggesting a shift in the state’s real estate landscape.

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The analysis found growing imbalances between supply and demand in key Florida markets, putting the state in the high-risk category. 

Pensacola (in Florida’s panhandle) leads with a 52% increase in housing supply and a 28% decrease in demand. In the southwest portion of the state, North Port follows Pensacola with a 50% supply increase and an 18% decrease in demand, while Naples saw a 44% increase in supply with a 14% decrease in demand. On the east coast, Port St. Lucie and Palm Bay are showing similar trends, with supply increases of 40% and 39%, respectively, against demand decreases of 22% and 18%.

According to the report, high supply and low demand are beginning to impact prices. In North Port, 52% of listings have seen price cuts, while Tampa and Naples are close behind, with 49% and 46% seeing reductions.

“When inventory rises faster than demand, prices have to adjust eventually,” senior economic analyst Hannah Jones said in a recent report. “Increasing inventory levels are a sign that the market is starting to balance out.”

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Other markets in Florida are seeing price corrections. Lakeland, which saw prices rise 51.36% since March 2020, has now recorded a 4.63% decline from its peak. Sebastian, with a 61.43% increase since 2020, is now down 4.14% from its high. Gainesville and Deltona show similar patterns, with declines of 2.28% and 1.96%, respectively, from their peaks.

The Parcl Labs data found that new construction has had an impact. In Ocala, over 20% of new listings are from new builds. Crestview and Pensacola had over 12% of new builds listed, indicating an influx of new inventory that gives potential buyers more choice.

The surge in supply comes as Florida grapples with other market pressures. Recent spikes in home insurance premiums and rising property taxes have added to the cost of homeownership in the state.

While the trends may concern current homeowners, they could create opportunities for buyers priced out of Florida’s competitive market in recent years. The combination of increased inventory, more frequent price cuts, and the beginning of price corrections in some areas may signal a shift toward a more balanced market.

Despite the trends, the state’s housing market remains robust overall.

According to data from Redfin, home prices in the state were up 3.1% in May compared to the previous year, with a median price of $419,700. The number of homes sold in May decreased 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 median time to sale increasing from 42 days to 55 days over the same period. The figures suggest a gradual shift toward a more buyer-friendly market, even as prices increase steadily.

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