Are Florida Real Estate Prices Trending Up or Down?
Knowing where the Florida real estate market is heading can help you determine if buying now or waiting is in your best financial interest.
So you’re thinking that a move to Florida might be in order. Maybe a particularly cold or snowy winter has you dreaming of a warmer climate. Perhaps retirement is approaching and you’ll no longer be tethered to a physical location in order to earn a living. Or maybe you just returned from a wonderful vacation in the sunshine state and are asking yourself why you still live where you do, if you always enjoy being in Florida more.
If you’re like many people contemplating a move to Florida to live full-time, you probably plan to sell the home you now live in and buy a new one in Florida. So you’re trying to get an idea of what your current home may be worth, and what homes in Florida are going for.
While you probably have a good idea of if the housing market in the area you now live is heading up or down, how do you find out where Florida home market is heading?
Where Can You Find Florida Home Price Forecasts and Projections?
One way some people use to learn where Florida home prices are heading and if it’s a good time to buy, is to ask a real estate salesperson. But is this the best way? Real estate agents and brokers aren’t trained to provide forecasts because it’s not considered a basic part of their job.
So if you ask a salesperson where Florida home prices are heading, you’ll most likely get nothing more than an off the cuff opinion that is not based on research. But you will almost certainly hear, is that it’s a good/great time to buy. I have been in the real estate business for over 30 years and have never heard a salesperson tell a buyernot to buy now. To be fair, a salesperson’s job is to sell homes and most of them can’t pay their bills if people don’t buy now. So while now is always a good time for you to buy for a salesperson, it may not be in your best interest to buy now.
How You Can Learn Where Florida Home Prices Are Trending, By Yourself, Using Publicly Available Facts
That’s Right. You can learn where Florida home prices are trending, on your own, by using publicly available statistics. Using this method, you won’t have to worry about the accuracy of a salespersons answer or possible bias.
Florida real estate prices rise or fall according to the supply of homes vs the demand for them
First, lets take a quick look at what moves prices in any area up or down. Supply and demand for real estate is what determines prices. The tow publicly available numbers we’ll be looking for to determine where prices will be heading in the future are:
- “Number of active listings” which represents “supply”
- “Days on/in Market” which represents “demand”
If the “number of active listings” is increasing, supply is increasing. This will lead to lower future prices if the increase continues.
If the “number of active listings” is dropping, supply is decreasing. This will lead to higher future prices if the decrease continues.
If the “days on market” is increasing, demand for available homes is dropping.This will lead to lower future prices if it continues.
If the “days on market” is dropping, demand for available homes is increasing.This will lead to higher future prices if it continues.
Step by Step Instructions to Determine Where Florida Real Estate Prices are Trending
Keep in mind that all real state is local. This means that even if prices are trending up everywhere within 50 miles of the town you’re interested in, home prices in your place of interest could be tending down. Now for the steps…
- Go to Zillow.com, Realtor.com or other major home listing site you use to search for home listings.
- Type in the city/town and state you are interested in, in the search bar, then hit enter.
- On the page that appears, find the average or median days on/in market. You may have to scroll to the bottom of the page, or click on a link for housing market data (or statistics) to find it. Once you find it, take notice if there is an arrow or other indicator pointing up or down. If there is, this shows you if the days on market is increasing (homes are taking longer to sell) or decreasing (homes are selling in less time).
- Now find the number of active listings. Take notice of any arrow or other indicator showing whether this number is increasing or decreasing.
- Now use those two numbers to determine which scenario below applies.
The Following Indicates a Florida Real Estate Market That is Slowing and Prices Are Trending Down
- Days on/in market is increasing: Homes are sitting on the market longer before they sell. This indicates a real estate market that is slowing or trending down. If the days on market continues to increase, home prices will decrease in the future as highly motivated sellers lower their prices in order in an attempt to have a better chance to sell in a slower market. As those lower priced homes sell. Those lower sale prices then become the comps that appraisers use to determine value, forcing other sellers to lower their price also.
- If the days on market continues to increase at the same time that the number of active listings is also increasing, over time this can lead to a market in Florida where prices fall rapidly.
The Following Indicates a Florida Real Estate Market is Heating Up and Prices Are Trending Up
- The days on market is decreasing because homes are selling quicker. If this continues, home prices will rise.
- If the days on market continues to decrease at the same time the number of active listings also decreases, this can lead to rapid home prices increases in Florida.
- If you see the number of active listings and days on market fluctuating up and down from day to day or week to week, the market is “stalled”. In Florida, chances are this stalled market will switch from the market it was previously, to the opposite. For instance, if it was a strong seller’s market before the stall, it will likely become a buyer’s market when the market starts to move again in a definite direction.
- Tracking the days on market and number of active listings on a piece of paper weekly, like every Sunday for example, will over timeprovide you with a better understanding of where your market of interest is trending.