We continue to see positive momentum in Florida’s housing markets with steady home sales, varied levels of price appreciation, and higher construction levels. But the pace of growth differs tremendously across metropolitan areas. If we entered each of Florida’s major housing markets into a race, this would be the lineup:
The 4-Minute Mile: Miami, Naples, West Palm Beach, and Fort Lauderdale. These markets are on fire, fueled by foreign capital, second-home buyers, wealthy retirees, and lack of developable land, creating an “urgency” for buyers in the market.
The 5K: Orlando. Orlando’s housing market mirrors a 5K; some racers sprint, while others run at a steady pace. Orlando’s South and Southwest submarkets are booming, fueled by demand from foreign buyers (Brazil, China, UK) and investors, while the primary markets in the Northwest and East—which do not experience foreign/investor demand—are experiencing a modest pace of sales activity and minimal price appreciation.
The Marathon: Tampa and Jacksonville. Characterized by steady absorption and minimal price appreciation, these housing markets depend primarily on affordability, which is starting to decline.
The Obstacle Course: The Panhandle of Florida is seeing stronger demand on the single-family side as second-home buyers re-enter the market. This metro is constantly “plagued by obstacles”, including hurricanes and the oil spill. We believe the market is on its way back to housing market recovery.
Every race has a finish line, and we are constantly monitoring when each of these markets reach their respective “finish”. Factors such as affordability, foreign capital inflows, economic indicators, and consumer confidence will all play a major role in Florida housing markets in the future and warrant close observation over the next few years.
For 137 markets, we have developed the Burns Home Value Index™ (BHVI), our best estimate of accurately modeling historical and current home price trends. This allows us to forecast without having to worry about shifts in the mix of homes selling and other issues. As we release our estimate for the BHVI on a monthly basis, the other available major indices are months behind.