As we get deeper into 2023, talks around a potential housing bubble continue to outpace the reality of the market. Is there still cause for concern? Current prognostications indicate a gradual cooling of the market will lead to a slight decline in home prices, but not enough to completely upturn the entire housing market. Real estate and finance experts are optimistic about the stability and strength they expect the new year will bring.
We have compiled an analysis of what to expect in the upcoming year. If you are one of many planning on relocating to Florida or are already a resident looking to buy a new home, this guide is for you.
Housing prices will begin to level off
The pandemic saw a dramatic surge in home prices over two years, resulting in historic highs further exacerbated by rising mortgage and interest rates. Interest rates have continued to grow as the federal government raises rates in response to increased borrowing. Still, experts predict the government will lower them to incentivize buyers to return to the market. Consequently, experts hope to see housing prices level off and perhaps decline by a marginal amount — enough to renew buyer interest without a massive toll on the market’s profitability.
Demand continues to exceed supply
The major ongoing problem in real estate nationwide is a lack of supply. Homes are not being built fast enough to meet demand. Labor shortages and supply chain issues are vestiges leftover from the pandemic. And supply will continue to be a concern for Florida.
With its business-friendly climate, pleasant year-round weather, and status as a top retirement destination, Florida is known for attracting hordes of new residents hoping to buy a home there. Compared to other popular states like California, Florida’s home prices and cost of living are low, making it the top choice for thousands of people looking to relocate. The yearly influx of people will continue to strain the housing supply, keeping home prices relatively high.
A market snapshot
As of March 2023, Sarasota, Fla., has 860 properties actively listed for sale; many of these are expected to sell soon as the high relocation rate pressures the limited housing supply. We have compiled a market snapshot based on select property types and their values to give you a general idea of the housing market in one of Florida’s most popular cities.
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With a little over 300 residential homes currently for sale, Sarasota features a wide range of costs and sizes. These properties include multi-bedroom estates, smaller luxury homes, and manufactured homes. These homes' prices vary significantly — about $100,000 for manufactured, one-bedroom units to $10,000,000+ for gorgeous bayfront manors and private estates.
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Sarasota is home to hundreds of beautiful condos as well. These units are expected to sell out quickly, with young professionals and couples comprising most people relocating to Florida. Like residential homes, condos vary in price from the low six figures to $10,000,000+ for multi-bedroom luxury units.
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Multi-family homes are a niche market in Sarasota, with only 19 available in March 2023. If you want multi-family homes, contact Victoria Turner with your size, amenities, and location preferences.
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Sarasota also contains parcels of land for those interested in building custom luxury homes. Bayfront land is in high demand and can cost several million dollars. Remember that construction delays and supply-chain issues have affected the housing market. Consult Victoria for accurate estimates of construction costs and timeframes.
Cost of living in Florida
If you plan on moving to Florida, you’re likely interested to learn about what it’s like to live there. Compared to the national average, the cost of living in Florida is 3.1% higher. This percentage is based on several factors, including housing costs, utilities, transportation, groceries, and healthcare.
The following is a breakdown of these components to help you better understand the cost of living. Intended as a practical estimate of day-to-day expenses, these figures don’t factor in taxes.
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Housing costs slightly more in Florida than the national median (both figures approach $300,000).
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As for rent, you can expect studio apartments to go for about $1,000 monthly, with additional bedrooms worth about $200–$400 each depending on location.
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Florida’s utility costs are comparable to the national average. Transportation, on the other hand, is a whopping 12.6% higher.
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Groceries are mere percentage points higher than the national average, while healthcare services and resources are slightly more expensive in Florida.
The final verdict
In conclusion, the Florida real estate and housing markets are expected to hold steady throughout 2023 thanks to stabilizing rates and excess demand leading to limited supply. The low prices we saw before the surge are not likely to happen again, but as the federal government lowers national rates, the resulting home prices may be just as promising. Nowadays, buyers are looking for any reprieve, no matter how small. Even a marginal decrease in housing costs will be a big move toward renewing buyer interest.
Prices will remain high primarily because of limited inventory and the number of people who relocate to Florida yearly. These factors indicate a strong and stable market heading toward a much-needed equilibrium.
For additional guidance and information regarding the current state of the Florida housing market, reach out to elite realtor Victoria Turner. Her commitment to reaching her clients’ goals and her diligent approach make her a talented agent dedicated to seeing you succeed. Get in touch with Victoria today!
*Header photo courtesy of Shutterstock
