Best Florida Cities to Retire

 By Jennifer Torres

Wallethub ranked four Florida cities – Miami, Orlando, Fort Lauderdale and Tampa – as the best for retirement due to lower taxes and high-quality healthcare.

MIAMI – With such celebrity residents as Oprah Winfrey, Jennifer Lopez and Jeff Bezos, the Sunshine is already a major magnet for the rich and famous. A recent study reveals retirees are also flocking to Florida, with four cities across the state snagging spots among the nation’s top five best places to retire.

To arrive at its ranking of the best states to retire, WalletHub compared the “retirement friendliness” of more than 180 U.S. cities across 45 key metrics ranging from the cost of living and tax laws to the availability of activities and the quality of health care.

Orlando, Florida claimed the top spot overall, followed by Miami in second place. Minneapolis, Minnesota came in third, followed by Florida’s own Tampa and Fort Lauderdale in fourth and fifth respectively. And out of the top 10, another Florida city, St. Petersburg, came in eighth place.

Orlando: Swapping snow shovels for sunshine

For those with their retirement sights set on Orlando, get ready to trade in your snow shovel for a set of golf clubs. With world-class theme parks, a vibrant arts scene and a plethora of dining and shopping options, your new backyard is essentially an endless vacation, with countless recreational options.

The average home price in Orlando is $385,207 and while the city doesn’t have a particularly low cost of living, with housing expenses 5% higher than the national average – utility prices are 6% lower than the national average and transportation expenses are 4% lower.

It also ranks at the top of the country when it comes to gerontologists and home health care facilities per capita. The Villages is also just under an hour’s drive from Orlando, a sprawling retirement suburb that’s become a widely popular destination for the over 55 set. The retirement mecca was recently named as the fourth most popular place in the U.S. to retire by Realtor.com®.

Miami: Retiring in style with sun, surf and sophistication

As the second-best place to retire on WalletHub’s list, Miami is a bit pricier, with an average home value of $587,252. But the city offers an abundance of activities popular with retirees – ranking at the top in the country when it comes to adult volunteer activities, art galleries and fishing facilities per capita. The city also has the fifth most museums and a large number of recreation and senior centers.

Miami is also home to some of the country’s most gorgeous beaches and many well-known healthcare facilities.

It’s also the fifth most walkable city in the country, with the majority of residents having access to quality public transportation within walking distance of their homes.

Tampa: Retiree life means smooth sailing

Last year, the city of Tampa came in first place on WalletHub’s 2023 list of the country’s best places to retire. This year it comes in at number four. Similar to Orlando, the average home price in Tampa is $385,903.

As for healthcare, Tampa General Hospital was recently named as one of the two best hospitals in Florida by U.S. News and World Report. There’s also plenty to do in Tampa, with numerous options for boating, sporting events, entrainment and fine dining.

And Sun City Center, Florida, a 55-plus community located just 30 minutes outside of Tampa, was recently selected as the most popular place in the U.S. to retire. According to Hannah Jones, an economic research analyst at Realtor.com, “It has the magic combo that aging populations prioritize: a warm beach and a big city nearby.”

With a variety of condos, duplexes and single family homes available, ranging from $50,000 to $350,000, the average price of a home in Sun City Center is $315,000 and everything is accessible by golf cart, including doctors’ offices, shopping, 11 golf courses, indoor and outdoor pools, a fitness center and a sports complex.

Fort Lauderdale: Blending luxury and relaxation

Located just a short drive away from Miami and West Palm Beach, in fifth place, Fort Lauderdale closed out the list of the country’s top five best places to retire.

With an abundance of housing options including high-rise condos, waterfront homes and gated communities, retirees have many options, but like Miami, the cost of living is higher, with an average home value of $529,481.

A number of well-known health care facilities are located within the city including the highly rated Holy Cross Health and it’s home to numerous boat marinas, golf courses, beaches, resorts and restaurants. There’s also horse racing at Gulfstream Park and gambling at the Seminole Hard Rock Hotel & Casino.

Why is Florida such a retirement hot spot?

Of course, Florida offers 1,350 miles of coastline, warm, sunny weather (233 sunny days per year, on average) and an array of recreation and entertainment options, but the state also has no income tax, no estate tax and no inheritance tax – leading the Tax Foundation to rank Florida among the top five best states as part of its 2024 State Business Tax Climate Index, while California, New York and New Jersey rank among the worst.

Just before Amazon founder Jeff Bezos’ home state of Washington enacted a new state capital gains tax in 2022, Bezos sold about $15.7 billion worth of Amazon stock – sidestepping approximately $1.1 billion in taxes that would have been due under the new tax.

He then purchased two opulent estates in Miami’s Indian Creek Village, commonly referred to as “Billionaire Bunker,” where Florida’s tax laws offer Bezos another advantage; His heirs are now insulated from Washington’s estate tax, which stands as the highest in the nation at a top rate of 20%.

Bezos later purchased a third, $90 million property on the island to temporarily reside there as the demolition of the other houses he acquired on the island proceeds.

According to WalletHub, around 68% of workers are somewhat confident that they will have enough money to retire comfortably, but only 21% are very confident. As a result, more than half of people expect to retire at age 65 or later – and three-quarters expect to do some work even after retiring.

“It’s important to choose wisely when picking where to retire, as many retirees are on a fixed income,” WalletHub Analyst Chip Lupo, said. “As a result, the best cities for retired people are those that minimize taxes and expenses, as well as have good opportunities for retirees to continue paid work for extra income, if they choose to do so. In addition, the top cities provide high-quality health care and offer plenty of enjoyable activities for retirees.”

© 2024 Advance Local Media LLC. Distributed by Tribune Content Agency, LLC.

Housing Payments at Lowest Level Since January

 Brokerage Redfin said national pending home sales are falling despite declining housing payments because buyers hope rates will fall further.

SEATTLE – The median U.S. monthly housing payment fell to $2,534 during the four weeks ending September 1, the lowest level since January and down nearly $300 from April's all-time high, according to a new report from Redfin. Housing payments are falling because even though home prices remain near record highs, weekly average mortgage rates have dropped to their lowest level in a year and a half.

But declining housing payments have yet to improve home sales. Pending homes sales fell 8.4% year over year, the biggest decline in nearly a year. Some would-be homebuyers are on the sidelines because they’re still priced out of the market and are waiting for mortgage rates to fall further.

Mortgage rates may not come down much more than they already have. That’s because markets have already priced in interest-rate cuts from the Fed, starting in September and going through 2025. If the cuts are smaller and slower than expected, mortgage rates would rise from where they are today. If the Fed cuts faster than expected, mortgage rates are likely to decline further. If rates do fall substantially more than they already have, that could push up demand, competition and home prices.

There are some signals that more prospective buyers are touring homes and prepping to purchase, even if they’re not yet buying. Mortgage-purchase applications are up 3% week over week. Redfin’s Homebuyer Demand Index – a measure of tours and other buying services from Redfin agents – is up 4% from a month ago and is near its highest level since May.

The supply of homes for sale is increasing modestly. New listings of homes for sale are up 3.7% year over year, on par with increases over the last few months, and total listings are up 16.6%. Total supply is rising partly because some homeowners who had been locked in by their relatively low mortgage rates are selling now that rates have come down a bit. Also, sluggish homebuyer demand is causing unsold listings to pile up.

Source: Redfin

© 2024 Florida Realtors®

US: Ultra-Luxury Home Sales to Set New Record

 Billionaires globally have seen their wealth boom, spurring major home purchases and agents’ optimism. Some are buying plots of land in Florida to build large estates.

WASHINGTON – A $115 million purchase of a duplex high above New York’s Central Park in June ended a nearly two-year drought for the city’s ultra-luxury real estate market.

The closing was ultimately a turning point. Less than a month later, a nearby five-story penthouse went for $135 million.

With more than four months of the year still to go, home sales of $100 million or more are on pace to set a new record in the city. Billionaires globally have seen their wealth boom, generating momentum for major home purchases. The pace of sales is spurring optimism among agents tasked with finding buyers for other top listings around the US.

Nationwide, there have been six deals at $100 million or above this year through the end of July, just three shy of a record set in 2021. Those have stretched from Southern California, where an oceanfront estate notched a record for the state at $210 million, to Aspen, Colorado – where a transaction this year crossed the nine-figure threshold for the first time.

The pace of ultra-luxury deals isn’t expected to let up anytime soon. Over in Malibu, one agent is preparing to put a mansion up for sale in a private listing for $300 million, which would set a record for the most expensive US home sale if it gets an offer at that level. Another agent in the area, Aaron Kirman, said he’s working with a few buyers who are looking for mega-mansions in Los Angeles or Malibu, and also has a pair of nine-figure listings, including a $115 million European-style villa in Bel Air.

“I’ve had more billionaires call me so far this year for $100 million homes than I had in the whole of last year,” said Kirman, who is chief executive officer of Christie’s International Real Estate Southern California. “They want what they want when they want it – and they’re willing to pay for it.”

While the pool of potential buyers is still small, top-tier billionaires have watched their wealth swell over the past few years. In early January, the median net worth of the world’s 500 richest people was $9.3 billion, according to the Bloomberg Billionaires Index. By August, it was almost $9.9 billion, meaning a $100 million home purchase would account for just about 1% of their wealth.

Now, there are even more homes for them. As the wealth of billionaires boomed, construction started on various projects catering to the richest, and many of those properties are becoming available. Plus, business titans including Jeff Bezos and Ken Griffin are becoming even more strategic about their massive real estate portfolios, finding ways to snap up plots of land in Florida to create even larger estates for their families.

“Clearly there’s demand, which seems to be increasing,” said John Gomes, co-founder of the Eklund Gomes Team at Douglas Elliman Real Estate. “There is definitely an upward trajectory, and we might even double this year what we did last year.”

Bargain-hunting billionaires

Sky-high listing prices won’t mean that the property always sell for that much. Both New York sales ultimately went for less than what the sellers initially asked.

The transaction at Central Park Tower closed in June for about $60 million less than the $175 million Extell Development listed it for last year. In July, Vladislav Doronin shelled out $135 million for the very top floors of a project he’d developed, the Aman New York. That figure was lower than the $180 million that a different buyer reportedly agreed to pay for the unit in 2018.

While some billionaires are looking for relative bargains, others have very specific demands and are willing to pay up to get what they want, said Fredrik Eklund, who worked with Gomes and Kent Wu to bring an undisclosed buyer to the Central Park Tower deal.

“They have their eyes on something and they only want that,” Eklund said. “They overpay or not – it doesn’t matter.”

Some of the richest homeowners have been stitching together massive estates through multiple expensive sales. In Florida, Bezos paid $147 million last year in separate transactions for two neighboring properties on Indian Creek island and agreed to buy another for $90 million in April.

Jills Zeder Group founder Jill Hertzberg worked with Griffin to stitch together adjacent parcels on Star Island that cost a combined $194 million. Now, she said, he’s being offered double or even triple what he paid for the assemblage but isn’t going to sell.

“He’s not interested,” she said. “Someone like him had the foresight when no one else was doing it.”

‘Master of the universe’ residences

The richest buyers are often interested in new homes, according to Hertzberg. But if they can’t find one that a developer or occupant is willing to sell, some are more open to knocking the buildings down and starting over instead of renovating the old properties, she said.

“It used to be when I first came to Miami Beach, people renovated these old Mediterraneans, the Art Decos,” Hertzberg said. “And then people started coming in with star architects who would say, ‘No, let’s take it down.’”

She expects her $132 million listing of four adjacent homes on La Gorce Island in Biscayne Bay to close in the coming weeks, with one buyer purchasing three and another acquiring the fourth. The larger transaction will fall just short of nine figures.

For buyers looking for newly built properties, there are more options under construction. A penthouse at Miami Beach’s forthcoming Shore Club Private Collection went into contract for more than $120 million in March. If it closes at that price when the building is completed in a few years, it would double the record for a Miami-area condo set by Griffin in 2015.

“The supply is finally coming,” Eklund said. “Every single project that we’re working on, we are doing these master-of-the-universe kind of residences on the top.”

© 2024 Penton Media

Report: Corporate Investors Own Over 117,000 Florida Homes

 Critics say large corporations are driving up home prices and reducing affordability for residential buyers. Many have private equity or Wall Street ties.

TAMPA, Fla. – A recent analysis by the Tampa Bay Times showed that corporate investors in Florida own over 117,000 single-family homes, which some say has led to higher prices and reduced affordability in the market for some potential home buyers. Others say it has allowed corporations to have greater control over communities.

The analysis also found that investment firms with ties to private equity or Wall Street own more than 10% of Florida's single-family rentals. Experts expect this trend to continue.

In one example, Lennar Homes sold about 100 homes in The Enclave at Twin Rivers neighborhood in Parrish to Invitation Homes, an investment company that owns thousands of properties across the state. Invitation Homes then installed two of its employees on the three-person homeowners association board. Invitation's spokeswoman said that its goal "is to be part of a community, not in control of it."

Meanwhile, previous analyses show that investors owned 27,000 homes across Hillsborough, Pinellas and Pasco counties. Other hot markets for investors have been the suburbs of Jacksonville and Orlando, as well as the Interstate-4 corridor.

Source: Axios (09/03/24) Varn, Kathryn

© 2024 Florida Realtors®

Florida Consumer Sentiment at 3-Year High

 Floridians in August remained cautious about the current economic conditions but expressed optimism about their personal finances and the national economy.

GAINESVILLE, Fla. – Consumer sentiment among Floridians rose for the third consecutive month in August, reaching its highest level in the past three years at 76.4 points, up 1.6 points from a revised figure of 74.8 in July. Similarly, national consumer sentiment also increased after four months of consecutive declines.

“Floridians grew more optimistic in August, driven by increased confidence in their personal financial situation and the national economy over the next year. Recent data shows that annual inflation fell below 3% in July. While employment figures have been revised downward, indicating a cooler labor market, second-quarter real GDP growth was revised up from 2.8% to 3% due to stronger consumer spending. Moreover, the Fed is expected to cut interest rates in September to prevent further weakening of the labor market. Overall, a soft landing seems achievable, matching the positive consumer expectations," said Hector Sandoval, director of the Economic Analysis Program at UF’s Bureau of Economic and Business Research.

Among the five components that make up the index, three increased and two decreased. 

Floridians’ opinions about current economic conditions were pessimistic in August. Views of personal financial situations now compared with a year ago decreased 1.2 points from 60.1 to 58.9. Similarly, opinions as to whether now is a good time to buy a major household item, such as furniture or a refrigerator, declined 3.1 points from 62 to 58.9, marking the largest decrease in this month’s readings. Notably, these downward readings were shared across all sociodemographic groups in Florida.

In contrast, the three components related to Floridians’ expectations about future economic conditions were positive. Expectations of personal finances a year from now increased 3.9 points from 88.7 to 92.6. Outlooks for U.S. economic conditions over the next year saw the largest increase this month, rising 5.2 points, from 78.4 to 83.6. Similarly, expectations of U.S. economic conditions over the next five years rose 3.1 points, from 85 to 88.1. These positive trends were shared across all sociodemographic groups, except for individuals age 60 and older, who expressed more pessimistic views about the country’s economic prospects over the next five years.

“It’s worth noting that Floridians’ expectations regarding their personal financial situation and the national economy over the next year are at their highest levels in three years. Moreover, expectations concerning the national economy over the next five years are nearly at a four-year high. These positive expectations suggest that Floridians anticipate continued economic stability and growth, which could lead to increased consumer spending, attract investment, and support business expansion,” said Sandoval.

“Looking ahead, while consumer sentiment tends to fluctuate during election years, the potential for lower interest rates could ease borrowing costs and support a continued upward trend in consumer sentiment,” said Sandoval.

Conducted July 1 to August 29, the UF study reflects the responses of 255 individuals who were reached on cellphones and 273 individuals reached through an online panel, a total of 528 individuals, representing a demographic cross section of Florida. The index used by UF researchers is benchmarked to 1966, which means a value of 100 represents the same level of confidence for that year. The lowest index possible is a 2, the highest is 150.

© 2024 Florida Realtors®

U.S. Foreclosure Activity in July Up 15% From June but Similar to a Year ago

 Florida was 2nd in states with most foreclosure starts, Miami was one of the major metros with most foreclosure starts and Jacksonville was for highest foreclosure rates.

IRVINE, Calif. – ATTOM has released its July 2024 U.S. Foreclosure Market Report, which shows there were a total of 31,929 U.S. properties with foreclosure filings default notices, scheduled auctions or bank repossessions – up 15% from a month ago and up slightly by 0.2% from a year ago.

“July’s foreclosure activity reflects a slight shift in the housing market,” said Rob Barber, CEO at ATTOM. “With an 18% increase in foreclosure starts and a 14% rise in completed foreclosures from last month, these shifts may highlight growing pressures in certain areas.

“However soaring home prices seem to continue and have spiked the value of homes across the nation, which boosts equity for homeowners at virtually every stage of paying off mortgages. Monitoring these next few months will help us better understand the implications for the real estate sector.”

Delaware, Nevada, and Utah post highest foreclosure rates

Nationwide, one in every 4,414 housing units had a foreclosure filing in July 2024. States with the highest foreclosure rates were Delaware (one in every 2,214 housing units with a foreclosure filing); Nevada (one in every 2,245 housing units); Utah (one in every 2,289 housing units); New Jersey (one in every 2,607 housing units); and Illinois (one in every 2,660 housing units).

Among the 224 metropolitan statistical areas with a population of at least 200,000, those with the highest foreclosure rates in July 2024 were Provo-Orem, UT (one in every 940 housing units with a foreclosure filing); Macon, GA (one in every 1,167 housing units); Columbia, SC (one in every 1,587 housing units); Spartanburg, SC (one in every 1,895 housing units); and Atlantic City-Hammonton, NJ (one in every 1,910 housing units).

Those metropolitan areas with a population greater than 1 million with the worst foreclosure rates in July 20244 were: Las Vegas, NV (one in every 2,089 housing units); Philadelphia, PA (one in every 2,197 housing units); Jacksonville, FL (one in every 2,274 housing units); Chicago, IL (one in every 2,279 housing units); and Riverside, CA (one in every 2,556 housing units).

Greatest numbers of foreclosure starts in California, Florida, and Texas

Lenders started the foreclosure process on 21,870 U.S. properties in July 2024, up 18% from last month and up 4% from a year ago.

States that had the greatest number of foreclosure starts in July 2024 included: California (2,342 foreclosure starts); Florida (2,339 foreclosure starts); Texas (2,222 foreclosure starts); Illinois (1,221 foreclosure starts); and New York (1,145 foreclosure starts).

Those major metropolitan areas with a population greater than 1 million that had the greatest number of foreclosure starts in July 2024 included: New York, NY (1,286 foreclosure starts); Chicago, IL (1,555 foreclosure starts); Philadelphia, PA (782 foreclosure starts); Miami, FL (758 foreclosure starts); and Los Angeles, CA (689 foreclosure starts).

Foreclosure completion numbers increase from last month

Lenders repossessed 3,282 U.S. properties through completed foreclosures (REOs) in July 2024, up 14% from last month and down 2% from last year.

States that had the greatest number of REOs in July 2024, included: New York (377 REOs); California (370 REOs); Illinois (221 REOs); Pennsylvania (219 REOs); and Michigan (212 REOs).

Those major metropolitan statistical areas (MSAs) with a population greater than 1 million that saw the greatest number of REOs in July 2024 included: New York, NY (271 REOs); Chicago, IL (136 REOs); San Francisco, CA (104 REOs); Detroit, MI (100 REOs); and Los Angeles (97 REOs).

Copyright © 2024 BridgeTower Media, The Mecklenburg Times. All rights reserved.

Redfin: Typical Down Payment Is a Record $67,500

 Nearly 3 in 5 U.S. buyers put down more than 10% of the purchase price with the goal of lowering mortgage payments. Many get money from family members to help.

SEATTLE – The typical down payment for U.S. homebuyers hit a record high of $67,500 in June, up 14.8% from $58,788 a year earlier, according to a new report from the real estate brokerage Redfin. This was the 12th consecutive month the median down payment rose year over year.

The nearly 15% jump in the median down payment significantly outpaced the increase in home prices, which were up 4% in June year over year. The increase is being influenced by the current market, where higher-priced, turnkey homes in desirable neighborhoods are more likely to sell. It’s also partly due to buyers putting down a higher percentage of the purchase price as a down payment.

“Investors are still coming in with all-cash offers on homes that need to be renovated. Traditional buyers are putting down large down payments to try and lower their mortgage payment,” said Annie Foushee, a Redfin agent in Denver. “These buyers will often utilize the help of family members to put down more than they could on their own.”

The typical homebuyer’s down payment was 18.6% of the purchase price in June, the highest level in over a decade and up from 15% a year earlier.

Nearly three in five (59.4%) homebuyers put down more than 10% of the purchase price in June, up from 56.6% a year earlier.

Down payments are increasing for a number of reasons:

• Rising home prices: The median-priced U.S. home was a record $442,525 in June, up 4% year over year. Higher home prices naturally lead to a higher down payment, which is a percentage of the home price.
• Elevated mortgage rates: Homebuyers are incentivized to put down more money upfront, and borrow less, when mortgage rates are higher. The 6.92% average mortgage rate in June was among the highest in the past 20 years, pushing buyers to increase their down payment to minimize monthly payments.
• Buyers have more equity: With home prices up, people who sell their previous property for more than they purchased it can use the extra equity for a larger down payment on their new home.
• All-cash purchases make up nearly a third of home sales.

The percentage of U.S. home purchases made with all cash rose to 30.7% in June, up slightly from 30.4% a year ago.

“The percentage of all-cash sales generally follows the same trend as the rise and fall of mortgage rates. When rates are down, the percentage of all-cash sales is down too, and the opposite is true when rates go up,” said Redfin Senior Economist Sheharyar Bokhari. “That means we may start to see all-cash purchases level off a little now that mortgage rates have started to come down from recent highs.”

FHA loans fall to lowest level in nearly two years

FHA loans made up 13.7% of mortgaged U.S. home sales in June, the smallest share since August 2022 and down from 14.9% a year earlier. FHA loans have declined because home prices are at near-record highs and mortgage rates are still elevated, meaning fewer relevant buyers are able to afford a home.

VA loans made up 6.7% of all mortgaged home sales, down slightly from 6.9% a year earlier.

Conventional loans – the most common type – represented nearly four out of every five loans (79.5%) in June, up slightly from 78.2% a year ago. Jumbo loans – used for higher loan amounts and popular among luxury buyers – represented 6.6% of mortgaged sales, essentially unchanged from 6.5% a year earlier.

Metro-level highlights: June 2024

Metros with biggest increases/decreases in down payments, in dollars

In Newark, NJ, the median down payment jumped 51.5% to $125,000 from $82,500 a year ago 51.5% – the largest percentage increase among the metros Redfin analyzed. Next came Las Vegas (up 40.7% from $32,328 to $45,500), Washington, D.C. (up 38.7% from $54,800 to $76,000), New Brunswick, NJ (up 32.7% from $93,625 to $124,213) and Nashville, TN (up 32% from $46,500 to $61,395).

Down payments only fell in three metros: Jacksonville, FL (down 28.4% from $39,950 to $28,338), Oakland, CA ( down 11% from $219,000 to $195,000) and Tampa, FL (down 6.4% from $42,500 to $39,773).

Metros with highest/lowest down payments, in percentages

In San Francisco, the median down payment was equal to 25.8% of the purchase price – the highest among the metros Redfin analyzed. It was followed by San Jose, CA (25.7%) and Anaheim, CA (25%). Down payment percentages are typically higher in San Francisco’s Bay Area due to a higher concentration of wealthy residents who can afford to put a higher percentage of the purchase price down.

Down payment percentages were lowest in Virginia Beach, VA (3%) – an area with a higher concentration of veterans using VA loans with little to no down payment – followed by Detroit (6.8%), and Jacksonville, FL(8.6%).

Metros where all-cash purchases are most/least common

In West Palm Beach, FL, 50.4% of home purchases were made in cash – the highest share among the metros Redfin analyzed – followed by Riverside, CA (39.9%) and Detroit (38.9%). All three metros see strong investor activity.

All-cash purchases were least common in San Jose, CA (18.3%), Seattle (21%) and Oakland (21.2%) – three more expensive metros where the median-priced home tops $850,000.

Metros with biggest increases/decreases in share of all-cash purchases

In Pittsburgh, PA, 28.6% of home purchases were made in cash, up from 19.2% a year earlier – the largest increase among the metros Redfin analyzed. Next came New Brunswick, NJ (up from 31.1% to 36.8%) and Newark, NJ (up from 25.9% to 31.6%).

In Providence, RI, 23.1% of home purchases were made in cash, down from 33.5% a year earlier – the lowest increase among the metros Redfin analyzed. Next came Baltimore (down from 36.1% to 26.8%) and Jacksonville, FL (down from 44.2% to 38.1%).

© 2024 Florida Realtors®

FHFA: U.S. Home Prices Up 5.7% in Last Year

 Home prices across the nation were up 0.9% from Q1 2024. Florida has seen a 4.8% four-quarter appreciation and 79.3% five-year appreciation.

WASHINGTON – U.S. house prices rose 5.7% between the second quarter of 2023 and the second quarter of 2024, according to the Federal Housing Finance Agency (FHFA) House Price Index (FHFA HPI). House prices were up 0.9% compared to the first quarter of 2024. FHFA’s seasonally adjusted monthly index for June was down 0.1% from May.

“U.S. house prices saw the third consecutive slowdown in quarterly growth,” said Dr. Anju Vajja, deputy director for FHFA’s Division of Research and Statistics. “The slower pace of appreciation as of June end was likely due to higher inventory of homes for sale and elevated mortgage rates.”

Significant findings

Nationally, the U.S. housing market has experienced positive annual appreciation each quarter since the start of 2012.

House prices rose in 50 states and the District of Columbia between the second quarter of 2023 and the second quarter of 2024. The five states with the highest annual appreciation were 1) Vermont, 13.4%; 2) Virginia, 12.3%; 3) Rhode Island, 10.1%; 4) Delaware, 10.0%; and 5) New Jersey, 9.9%.

House prices rose in 96 of the top 100 largest metropolitan areas over the last four quarters. The annual price increase was the greatest in Syracuse, NY at 14.2%. The metropolitan area that experienced the most significant price decline was Austin-Round Rock-Georgetown, TX at -3.2%.

All nine census divisions had positive house price changes year-over-year.

The Middle Atlantic division recorded the strongest appreciation, posting a 8.5% increase from the second quarter of 2023 to the second quarter of 2024. The West South Central division recorded the smallest four-quarter appreciation, at 2.8%.

In Florida:

One-quarter appreciation:             0.3%

Four-quarter appreciation:             4.8%

Five-year appreciation:                  79.3%

Appreciation since 1991:               460.1%

The FHFA HPI is a comprehensive collection of publicly available house price indexes that measure changes in single-family home values based on data that extend back to the mid-1970s from all 50 states and over 400 American cities. It incorporates tens of millions of home sales and offers insights about house price fluctuations at the national, census division, state, metro area, county, ZIP code, and census tract levels. FHFA uses a fully transparent methodology based upon a weighted, repeat-sales statistical technique to analyze house price transaction data.

© 2024 Florida Realtors®

In the South, new home construction starts are 5.4% lower

 Summer Housing Slowdown Continues

In the South, new home construction starts are 5.4% lower year-to-date, and permits have decreased by 0.3% over the same period

WASHINGTON – Overall housing starts decreased 6.8% in July thanks, in part, to high interest rates for construction and development loans, labor shortages and higher prices for building materials, the National Association of Home Builders said.

Starts decreased to a seasonally adjusted annual rate of 1.24 million units, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. This is the lowest pace since May 2020.

The July reading of 1.24 million starts is the number of housing units builders would begin if development kept this pace for the next 12 months. Within this overall number, single-family starts decreased 14.1% from an upwardly revised June figure to an 851,000 seasonally adjusted annual rate. However, on a year-to-date basis, single-family starts are up 11.4%. The multifamily sector, which includes apartment buildings and condos, increased 14.5% to an annualized 387,000 pace.

“The decline in new home construction mirrors our latest builder surveys, which show that buyers remain concerned about challenging affordability conditions and builders are grappling with elevated rates for builder loans, a shortage of workers and lots, and supply chain concerns for some building materials,” said Carl Harris, chairman of the National Association of Home Builders (NAHB) and custom home builder from Wichita, Kan.

“Better inflation data points to the Federal Reserve moving to cut interest rates possibly as early as September, and with interest rates expected to moderate in the months ahead, this will help both buyers and builders who are dealing with tight lending conditions,” said NAHB Chief Economist Robert Dietz.

On a regional and year-to-date basis, combined single-family and multifamily starts are 1.3% lower in the Northeast, 5.1% lower in the Midwest, 5.4% lower in the South and 5.1% lower in the West.

Overall permits decreased 4.0% to a 1.40 million unit annualized rate in July. Single-family permits decreased 0.1% to a 938,000 unit rate. Multifamily permits decreased 11.1% to an annualized 458,000 pace.

Looking at regional data on a year-to-date basis, permits are 1.1% higher in the Northeast, 3.2% higher in the Midwest, 0.3% lower in the South and 4.1% lower in the West.

Single-family homes under construction fell back to a count of 653,000 – down 4.1% compared to a year ago. The number of multifamily units under construction fell to an 886,000 count – down 13.2% compared to a year ago. The number of multifamily units under construction is now the lowest since July 2022.

Selma Hepp, CoreLogic chief economist, remains hopeful rate cuts will improve starts and permits.

"We expect housing starts and building permits to increase as we approach an official Fed interest rate cut. This prolonged high-interest-rate period has also negatively impacted recent homebuilder confidence. These negative sentiments are already improving through August's early indicators and should see a slight boost month on month going into 2024,” Hepp said.

© 2024 Florida Realtors®

Zillow: Lower Rates May Revive Competition

 Buyers in Florida’s bigger metros gained an upper hand in July 2024, Zillow said. Nationwide, homes have been lingering on the market longer compared to last year.

SEATTLE – Competition for homes and price appreciation tapered off faster than normal in July as high housing costs continued to stymie shoppers, according to the Zillow market report. But recent drops in mortgage rates should spur more competition as we head into fall.

"If this relief from mortgage rates continues, we should see more buyers restarting their hunt for a home," said Zillow Chief Economist Skylar Olsen. "But although rate lock among homeowners is easing, they probably won't be as motivated to jump back into the market and sell. With housing inventory still scarce, this improved affordability picture could reignite competition and sales as we head into the fall, or at least delay the usual post-summer cooldown."

Sellers lose the upper hand

Sellers gave up a marked advantage over buyers in July on the national scale, as the Zillow market heat index moved into neutral territory for the first time since December. This marks the first July the national market has been neutral since 2019; in each of the past two years, the market moved into neutral ground in October.

Among major markets, Denver, Pittsburgh, Indianapolis and Louisville lost their advantage for sellers and moved into neutral territory, while Orlando became buyer-friendly like the rest of the big Florida metros.

Homes are lingering on the market – even successful listings took almost a week longer to sell in July than last year. While that's still five days faster than the average pace of sales in the years before the pandemic, it's still a sign that buyers were much less eager to commit.

Inventory accumulated further in July, and now stands nearly 25% above last year's levels, marking the eighth straight month the year-over-year inventory gap has widened. Compared to pre-pandemic norms, the inventory shortfall shrank a bit and is now down 31.5%, the smallest deficit since October 2020.

In an effort to win over cash-strapped buyers, home sellers again cut prices at record levels. More than 26% of homes on Zillow received a price cut in July, the highest share for any July since at least 2018, when the dataset began.

What happens next?

This cooling competition and pricing slowdown could dissipate in August if lower mortgage rates hold.

By the end of July, lower rates brought the monthly price premium to buy a home, rather than rent a similar property, below $200.3 That has shrunk from a $247 difference as recently as April. Now lower rates in August are closing the gap even further.

Of course, the cost disparity between renting and buying differs in every metro and even by neighborhood. But for those shoppers on the edge of affordability – and who have enough cash on hand for a down payment – the significant drop in rates may offer enough relief to entice a move. The effect of a rate cut on mortgage payments is more significant in expensive areas.

Lower rates aren't likely to encourage a comparable wave of current homeowners to sell, though. Zillow surveys show 80% of recent sellers were influenced by major life events, such as a change in their household size or working situation. New listings typically surge in spring and then taper off as homeowners aim to sell, buy another house, and be moved in before school and the fall holidays begin.

Home value appreciation slowed to a refreshingly reasonable 2.8% year over year in July, but that could tick back up if the surge in demand outweighs an increase in supply, as expected.

© 2024 Florida Realtors

Asking Rents Fall in Florida, Nationwide

A Redfin study confirms a recent Zillow report finding: Rents are cooling. Some Florida cities with a high number of new apartments continue to see price drops.

SEATTLE – The median asking rent fell across all bedroom counts in July year over year, the first time that’s occurred since June 2020. That’s according to a new report from the real estate brokerage Redfin.

Median asking rents for 0-1 bedroom apartments fell 0.1% (to $1,498 a month), 2 bedroom apartments fell 0.3% (to $1,730) and 3+ bedroom apartments fell 2.4% (to $2,010). All three categories are down at least $50 from all-time highs posted in the last two years.

Prices remained steady for 0-1 bedroom and 2 bedroom apartments due to higher demand in those categories, even with increased supply coming onto the market. The increased supply of 3+ bedroom apartments, however, led to prices falling faster in July due to lower demand for larger, more expensive units which also compete against single-family home rentals.

The overall rental vacancy rate has remained at 6.6% for four consecutive quarters, the highest level since 2021, while the vacancy rate for buildings with 5+ apartments – the subject of Redfin’s report – was at 7.8% in the second quarter, up from 7.4% a year earlier.

“Rents have recently steadied – or even dropped slightly – because of the sheer number of apartments built over the past two years,” said Redfin Senior Economist Sheharyar Bokhari. “Construction is slowing down and prices will eventually start rising again, but now is still a good time for renters to find a deal, especially families looking for an apartment with at least three bedrooms.”

Nationwide median asking rent rises slightly, but still down $53 from all-time high

The median asking rent for all bedroom counts combined actually rose 0.4% year over year in July to $1,647. This discrepancy between the combined result (showing a gain) and the three different bedroom types (which all fell) is the result of a statistical phenomenon known as Simpson’s paradox.

The national median asking rent was down 0.2% month over month from June and $53 less than the all-time high of $1,700 recorded in August 2022. Despite the slight dip, affordability is still a serious issue for renter households, which earn roughly $11,000 less than is needed to afford a typical apartment.

Rents drop across Sun Belt, as East Coast and Midwest cities record big increases

Metro areas in Texas and Florida, two states which have built a high number of new apartments since the pandemic, continue to see large falls in price.

The median asking rent in Austin, TX dropped the most of any metro we analyzed in July, falling 16.9% year over year. Jacksonville, FL, was not far behind, with the median asking rent falling 14.3%.

San Diego (down 12.7%), San Francisco (down 7.6%) and Tampa, FL (down 5.9%) rounded out the five metros with the biggest drops in asking rents.

The median asking rent in Virginia Beach, VA rose 13.7% year over year in July, the biggest jump among the metros Redfin analyzed. Baltimore, MD (up 12.5%), Washington, D.C. (up 11.6%), Chicago (up 10.3%) and Cincinnati, OH (up 9.9%) posted the next highest gains.

© 2024 Florida Realtors®

U.S. Luxury Home Prices Spike 9%, But Inventory Grows

 Redfin reports that thanks to all-cash buyers, luxury home prices grew nationally more than non-luxury homes in the second quarter of 2024.

SEATTLE — The typical U.S. luxury home sold for a record $1,180,000 in the second quarter, up 8.8% from a year earlier – the biggest increase in nearly two years. Non-luxury home prices grew at less than half that pace, rising 3.8% to a record high median of $342,500, according to a new report from the real estate brokerage Redfin.

Redfin defines luxury homes as those estimated to be in the top 5% of their respective metro area based on market value, and non-luxury homes as those estimated to be in the 35th-65th percentile based on market value.

“The luxury market has withstood the havoc wreaked by high mortgage rates this year, thanks to an abundance of all-cash buyers,” said Redfin Senior Economist Sheharyar Bokhari. “Now that sales are stabilizing and more homes are being listed for sale, it’s unlikely that luxury prices will continue to grow at quite as high a rate.”

High-end buyers were less likely to be impacted by the rate lock-in effect and uncertainty around the direction of mortgage rates, which sat above 7% for much of the quarter. They were also more likely to have benefited from a strong stock market and high levels of home equity. This spring, 43.7% of luxury homes sold were purchased with all cash, up from 43.2% a year earlier. (Note the all-cash data covers the three months ending in May, the most recent month for which all-cash data is available).

Luxury home sales stay positive as non-luxury sales fall

The number of luxury homes sold in the second quarter was virtually unchanged from a year earlier, ticking up by 0.2%, marking the third consecutive quarter of sales growth. Non-luxury home sales fell 3.4% to the lowest second-quarter number in a decade.

“There is still strong demand for well-priced, high-end properties, especially those which are presented beautifully and move-in ready,” said Crystal Zschirnt, a Redfin Premier agent in Fort Worth, TX, where luxury home sales were up 9.7% year on year and typically sold four days faster than non-luxury homes. “We had a client recently list a property for $2.4 million that we ended up selling for $2.6 million. We are still seeing multiple offers in situations where a property is priced accurately, visually appealing and doesn’t need any work.”

Even though the overall market is seeing far less activity than it did pre-pandemic—in large part due to an ongoing supply shortage—the luxury market has made up more ground since. Compared to the second quarter of 2019, luxury sales were down 12.8%, while non-luxury sales were down 20.1%.

Luxury home inventory grows to highest level in 3 years

Luxury inventory rose 9.7% year over year, the fourth consecutive quarter of growth following a major drop off during and after the pandemic. Non-luxury inventory rose 3.9%. It’s worth noting inventory in both categories is still well below pre-pandemic levels.

The number of new listings of luxury homes increased 11%, far outpacing the 2.6% increase in new listings of non-luxury homes.

Luxury and non-luxury homes sitting longer on market

With inventory increasing, luxury homes stayed on the market a median 40 days—two days longer than a year earlier. Non-luxury homes also took longer to sell—a median 31 days—up from 28 days last year.

“We are seeing luxury homes selling within 30-45 days, but that’s a lot longer than in 2022 when they were flying off the shelf,” said Juan Castro, a Redfin Premier agent in Orlando, FL, where inventory ballooned 22.7% in the second quarter, year over year. “International cash buyers are still driving activity, but we have seen a slowdown in local buyers, as it’s really hard to upsize to a luxury home with a 7% mortgage rate.”

Metro-level luxury highlights: Q2 2024

Redfin’s metro-level luxury data includes the 50 most populous U.S. metros. Some metros are removed from time to time, to ensure data accuracy. All changes noted below are year-over-year changes.

• Prices: The median sale price of luxury homes rose most in Providence, RI (16.5% increase to $1,395,000), San Jose, CA (16.4% increase to $4,830,000) and Nassau County, NY (14.3% increase to $2,572,500). It fell in just two metros, in New York (-3.2% to $3,200,000) and Austin, TX (-1.5% to $1,650,000).
• Sales: Luxury home sales increased most in Nashville, TN, (20.4%), Tampa, FL (14.3%) and Seattle (13.9%). They decreased most in Newark, NJ (-20.1%), Baltimore, MD (-15.5%) and Indianapolis, IN (-12.4%).
• Active listings: The total number of luxury homes for sale increased most in Tampa, FL (29.6%), Jacksonville, FL (28.9%) and San Antonio, TX (26.6%). Total inventory fell the most in Newark, NJ (-16%), Chicago (-9.8%) and Atlanta (-6.2%).
• New listings: New listings of luxury homes increased most in Providence, RI (31.5%), Miami (28.1%)and Tampa, FL (27.6%). New listings fell in 11 metros, with the biggest declines in Newark, NJ (-18.3%), San Francisco (-15.4%) and Chicago (-8.9%).
• Speed of sales: Luxury homes sold fastest in Seattle with a median of six days, while Detroit, San Jose, CA and Indianapolis, IN all recorded a median of 10 days. They sold slowest in Miami (114 days), West Palm Beach, FL (108) and Nassau County, NY (81).

10 most expensive U.S. home sales: Q2 2024

• Glenwood Springs, CO (Aspen): $77M
• Glenwood Springs, CO (Aspen): $66.5M
• Los Angeles, CA: $62.8M
• Miami, FL (Miami Beach): $62.5M
• Glenwood Springs, CO (Aspen): $59M
• West Palm Beach, FL (Palm Beach): $51.3M
• West Palm Beach, FL (Highland Beach) $50M
• West Palm Beach, FL (Palm Beach): $49.6M
• Glenwood Springs, CO (Aspen): $48.8M
• Glenwood Springs, CO (Woody Creek): $46M

© 2024 Florida Realtors®

South and Central Florida had the highest rent price increases after the pandemic

Tampa and Miami saw the highest percentage increase in rents from June 2019 to June 2024.

SANTA CLARA, Calif. – Rents fell again in June, with especially large declines in the South, where there's been an influx of new rental units, according to a Realtor.com Rental Report. The median asking rent for 0-2 bedroom units fell -0.4% ($7) from last June to $1,743, marking the 11th straight month of declines and -0.6% ($11) below its August 2022 peak. Still, some markets have seen rents surge by as much as 40% compared to 2019's pre-pandemic levels, with Tampa, Fla., seeing the largest increase over the past five years.

The Top 10 markets experiencing the fastest price growth versus pre-pandemic rents include: Tampa-St. Petersburg-Clearwater, Fla. (+39.5%); Miami-Fort Lauderdale-Pompano Beach, Fla. (+39.2%); Indianapolis-Carmel-Anderson, Ind.(+37.5%); Pittsburgh (+37.4%); Sacramento-Roseville-Folsom, Calif. (+35.8%); Virginia Beach-Norfolk-Newport News, Va.-N.C. (+32.5%); New York-Newark-Jersey City, N.Y.-N.J.-Pa. (+31.3%); Cleveland-Elyria, Ohio (+30.6%); Raleigh-Cary, N.C. (29.8%); and Birmingham-Hoover, Ala. (+29.3%).

"Rents have been steadily falling for almost a year, though the pace of the decline has slowed," said Danielle Hale, chief economist at Realtor.com. "But rental costs have risen significantly since before the pandemic and inflation has further strained renters' budgets, underscoring the need for more supply to meet demand and to keep renters from contributing an increasing percentage of their incomes to housing costs."

Tampa saw the highest rent growth since before the pandemic

The median asking rent for 0-2 bedroom units across the top 50 metro areas in June was 21.2% ($305) higher than the same month in 2019, before the pandemic roiled the housing market. That's roughly in line with the trend in overall consumer prices (+22.6%) during the same period, but pales in comparison to the 52.6% increase in median price-per-square-foot of for-sale home listings in the five years ending June 2024.

Half of the 10 markets with the highest percentage increase in rents from June 2019 to June 2024 were in the South, led by Tampa, Fla. (39.5%) and Miami (39.2%). In Tampa, for example, the median asking rent in June was $1,752, or $496 higher than the pre-pandemic level. That is equivalent to about 8.6% of a typical Tampa household's monthly gross income. The biggest increase in the Midwest came in Indianapolis, up 37.5% to $1,353. Pittsburgh saw the largest percentage jump in the Northeast, with the median asking rent rising 37.4% to $1,484, and Sacramento, Calif. led the West, with the median rent climbing by 35.8% to $2,007.

Rents fell in the South, rose in the Midwest, and were mixed on the coasts

Regionally, rental trends were mixed in June. The biggest year-over-year declines were all in the South, led by Austin, Texas (-9.5%), San Antonio (-8.2%), and Nashville, Tenn. (-8.1%). Those areas have seen substantial increases in the supply of new rental units. In the Midwest, rents rose overall, with increases seen in Indianapolis (+4.4%), Milwaukee (+3.7%) and Minneapolis (+3.7%). Large metros in the West saw year-over-year rents decline, including Los Angeles (-1.9%) and San Francisco (-4.2%). Meantime, big coastal cities in the Northeast, such as New York (+0.6%) saw rental rates edge up, albeit more slowly than before.

Units of all sizes saw rents decline

Median asking rents fell across all size categories, with smaller units showing larger declines. The median rent for studios fell by -1.2% on a year-over-year basis, to $1,463. That's -2.0% lower than its October 2022 peak but 17.6% higher than five years ago. Median rent for one-bedroom units fell -1.1% to $1,618, for the 13th consecutive year-over-year decline. That's still 19.5% higher than it was five years ago. And the median rent for two-bedroom units fell by -0.3% to $1,939 for the 12th consecutive month of annual declines, though it was a smaller drop than seen in May. These larger units had the highest growth rate over the past five years, rising by 23%.

© 2024 Florida Realtors®

Fannie Mae: U.S. Home Price Growth to Moderate

 Many Sunbelt metros are currently seeing significant increases in for-sale inventories, in part due to new construction, a Fannie Mae economist said.

WASHINGTON – Home price growth in the second quarter was stronger than previously anticipated but will likely moderate soon, closing 2024 and 2025 at annual rates of 6.1% and 3.0%, respectively, according to the July 2024 commentary from the Fannie Mae Economic and Strategic Research (ESR) Group.

Despite a more than 30% increase in listings of homes available for sale compared to a year ago, certain indicators of housing activity remain soft, as evidenced in part by fewer existing home sales in May compared to a year ago. This dynamic of gradually increasing supply and affordability-constrained demand is expected to cause home prices, which were up 3% on a non-seasonally adjusted basis in the second quarter, according to the Fannie Mae Home Price Index, to moderate going forward.

Additionally, the ESR Group notes recent regional volatility in listings and home prices, as many large metros in the Sunbelt, for example, now have inventory levels that match or even exceed for-sale inventories in 2019. This contributed to the ESR Group revising downward its starts and new home sales forecasts; notably, however, it revised upward its existing home sales forecast due to a modestly lower mortgage rate path.

The ESR Group made only modest revisions to its economic growth outlook, as incoming data have come in largely in line with expectations for slowing growth. Notably, due to two consecutive lower-than-expected prints of the Consumer Price Index (CPI), the ESR Group downwardly revised its inflation forecasts and now expects the CPI to end the year at 2.9% and the Fed's preferred inflation gauge, the core Personal Consumption Expenditures (PCE) Index, to end the year at 2.5%. Due to the better inflation prints and signs of slowing in the labor market, the ESR Group now expects the Federal Reserve to cut rates in both September and December.

"The housing market continues to wait for affordability to improve, even as the supply of new and existing homes for sale slowly rises," said Doug Duncan, Fannie Mae senior vice president and chief economist. "The slight decline in mortgage rates of late, following data pointing to gradually slowing economic growth, has not been enough to overcome the significant affordability constraints imposed on would-be homebuyers. As such, despite more homes being listed for sale, actual home sales have not picked up.

We continue to expect home price growth on a national level to decelerate but remain positive – over the near term, but it should be noted that conditions often vary by region, particularly as it relates to supply. For instance, many Sunbelt metros are currently seeing significant increases in for-sale inventories, in part due to new construction, while supply in much of the Northeast and Midwest remains extremely tight. In aggregate, we expect these varied market conditions to lead to a slight decline in total new home sales nationally for the full-year 2024, but a slight increase in existing homes sales."

© 2024 Florida Realtors®