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Southeast Florida 2024 Outlook: Sales Rebound and Sustained Price Appreciation
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·3 min read

With a decline in mortgage rates and robust economic fundamentals, Southeast Florida's real estate market is poised for a resurgence in sales and sustained price appreciation throughout 2024. Here are the five major trends anticipated for the year:

1. Downward Trend in Mortgage Rates:  Mortgage rates are expected to continue their downward trajectory in 2024, potentially reaching 5.25% by the end of the year. The slowdown in inflation, coupled with the Federal Open Market Committee's forecast of a cumulative 0.75% rate cut in 2024, supports this trend. The 30-year fixed mortgage rate may hit 5.25% by the fourth quarter, with a full-year average of 6%, down from 6.8% in 2023.

2. Rebound in Existing Home Sales:   The decrease in mortgage rates is likely to drive a rebound in Southeast Florida's existing home sales, projecting a growth rate of 7%. Single-family home sales are expected to outpace condominium sales, with an 8% increase in the former and a 5% increase in the latter. This follows the trend observed in 2023, where the preference for single-family homes strengthened, possibly influenced by the rise of hybrid work and increased suburban living attractiveness.

3. Modest Rise in Home Prices:   Despite cumulative price gains of over 50% since 2019, home prices in the Southeast Florida counties of Miami-Dade, Broward, Palm Beach, Martin, and St. Lucie are expected to continue rising at a modest pace of 5%. Tighter supply conditions in the single-family home market will support a stronger price growth of 6%, while condominium price growth is moderated to 4% due to an increase in inventory.

4. Continued Tight Supply Conditions:   The supply of homes is expected to remain tight, with single-family homes experiencing tighter market conditions than condominiums. Single-family home months' supply is projected to be at 3 to 4 months, maintaining a seller's market. The inventory is likely to tighten further through mid-2025, with fewer new single-family homes in the pipeline, leading to a decrease in authorized permits compared to the previous year.

5. Intensified Competition in Affordable Housing Segment:   Competition is anticipated to intensify for homes priced below $400,000, catering to households earning $100,000 or less. On the other hand, the $1 million and above market is expected to see sustained demand from high-income and high-net-worth buyers, with a supply buildup resulting in 18 to 24 months' worth of inventory.

6. Elevated Migration Levels:  Out-of-state and international migration are likely to remain elevated, surpassing pre-pandemic levels. Southeast Florida's robust economy, low business taxes, absence of state income tax, and the ongoing recovery of domestic and international tourism contribute to the region's appeal. Florida's low tax environment, exemplified by the reduction in the business rent tax rate, further enhances the business climate. Despite challenging economic conditions, the area saw $4.7 billion in commercial sales transactions in the first quarter of 2023.

7. Foreign Buyer Dominance:  Florida remains the top destination for foreign buyers in the United States, accounting for 23% of foreign buyer transactions. The Miami-Ft. Lauderdale-West Palm Beach metro area stands out as the largest foreign buyer market, attracting 47% of  Florida's foreign buyers. Foreign buyers contributed significantly to MIAMI member's dollar sales, representing 18%, compared to 6% at the state level and 2% nationally.

Florida's foreign buyers. Foreign buyers contributed significantly to MIAMI member's dollar sales, representing 18%, compared to 6% at the state level and 2% nationally.