Real Estate Trends: What’s the 2023 Florida Outlook?

What should consumers, Realtors® and policymakers expect when it comes to Florida real estate over the next year? After the unexpectedly strong years of 2020 and 2021 despite an ongoing pandemic, Florida’s housing sector in 2022 was affected by rapidly rising inflation and higher mortgage interest rates, Florida Realtors® Chief Economist Dr. Brad O’Connor told nearly 500 Realtors during the 2023 Florida Real Estate Trends summit last Thursday.

“Now, we expect the state’s residential real estate market to return to a more typical pace,” he said. “I believe 2023 will look more like the ‘traditional’ housing market years of 2018-2019 in Florida as supply and demand become more balanced.”

One major question currently on the minds of real estate professionals, homebuyers, home sellers and others: Is a price correction on the way? (more…)

How have home prices behaved after previous major Hurricanes?

Veros Real Estate Solutions has published a report looking at real estate markets after 5 major storms. All the cities that experienced these massive hurricanes experienced higher levels of home value appreciation in the year after the storm than the year before.

There may have been other factors impacting house prices in the year prior to and the year following the hurricanes that were unrelated to the hurricane itself. For example, house prices might have been going up rapidly in a given market simply due to an overall seller’s market in that city at the time of the storm. This was certainly the case with Ft. Myers in 2004 during Hurricane Charley.

To mitigate the effect of other factors outside of the hurricane and to normalize the appreciation statistics, the appreciation of each city pre- and post-hurricane was taken as a percentage of the US national average appreciation during the same timeframes.

Overall, the same trend is observed. For example, in the year prior to Katrina, New Orleans had appreciation of 97% of the US average appreciation. In the year after Katrina, the average appreciation skyrocketed to 109% of the US average – an increase of 12%! For these five storms, the post hurricane annual appreciation (as a percentage of average US house price appreciation) ranged from a low of 2.4% to a high of 11.9% more than the annual appreciation in those markets prior to the storm. The average increase was 6.6% Thus, both methods of analyzing the data show the same results.

At first blush, this may seem like a surprising result, but it all comes down to supply and demand. People whose homes have been severely damaged have to find a new place to live in the short term while their home is being repaired. This causes demand to increase for an existing pool of housing inventory. Likewise, some of the inventory of homes to purchase will have been damaged by the storm thereby reducing the supply. Increased demand and reduced supply for an asset means (all other things being equal) that there will be upward price pressure. Thus, post-hurricane housing markets follow classic economic theory.

And read these recent articles:
Economic commentary
No, the Federal Reserve does not control mortgage rates
Federal Reserve tries to rewrite history
Has Inflation Peaked?
Have Mortgage Rates peaked?
Are we already in a Recession?
Federal Reserve in Fantasyland: Implications for Housing Market
How far Behind the Curve is the Federal Reserve?
Will the Federal Reserve show chutzpah today?
Why are Mortgage Rates so high?

Other
How to protect your house from title fraud
Florida Lawmakers Pass Insurance, Condo Reforms
Florida Regulator: Insurers Can Offer Roof Deductibles
Expansion Plans for Fort Myers Airport
Guide to Buying and Selling in Southwest Florida

Market Summaries
Florida Market Update in 4 minutes
Naples mid-year Market Report
Sales Resemble Pre-Pandemic — But Not Pricing & Inventory

  • Andrew Oliver, M.B.E., M.B.A.
    Real Estate Advisor
    Andrew.Oliver@Compass.com
    www.TheFeinsGroup.com
    www.OliverReportsFL.com
    m: 617.834.8205
    ———-
    800 Laurel Oak Drive, Suite 400, Naples, FL 34108
    ———-
    Licensed in Massachusetts
    www.OliverReportsMA.com

If you – or somebody you know – are considering buying or selling a home and have questions about the market and/or current home prices, please contact me on 617.834.8205 or Andrew.Oliver@Compas