Brad O'Connor Directly Addresses Camera:  2023 was a rough year for residential real estate here in the US and around the world, as central banks continued to raise interest rates to combat inflation. Florida weathered the storm fairly well, though. Its economy churned out new jobs at one of the highest rates of any state. According to the US Bureau of Labor Statistics, seasonally adjusted payroll employment in Florida was up 2.5% year-over-year as of December, compared to just 1.7% nationally. And compared to four years ago in December 2019, just prior to the pandemic, Florida payroll employment is now up 9.2%, while nationally the number of payroll jobs has only increased by 3.4%.

In addition to strong job growth, Florida continues to be a leader in population growth. Throughout 2023, both retirees and working-age adults and their families continued to move to Florida in droves from elsewhere in the country. According to the latest population estimates from the US Census Bureau, between the midpoints of 2022 and 2023, Florida's population increased by over 365,000 residents. That's second only to Texas's net increase of over 470,000 residents. That works out to just over a thousand net new residents a day for Florida. In percentage terms, Florida's population increased by over 1.6%, which was the second-highest growth rate during this period, trailing only South Carolina's increase of 1.7%. Overall, the US population only increased by about half a percent during this period, which just goes to show you what an advantage Florida's rate of population growth brings to its real estate market.

For more recent trends in domestic migration, we can also look at driver license exchange data from the Florida Department of Highway Safety and Motor Vehicles, which tracks the state of origin of incoming Florida residents who trade in their licenses and IDs from their previous states of residence. While we are down from the peak of domestic in-migration we experienced at the height of the pandemic, we see that from most states, we are still above pre-pandemic levels of domestic migration into Florida.

So, it turns out that both job growth and population growth helped mitigate some of the dampening effect that high mortgage rates had on homebuyer demand in 2023. Unfortunately, though, they weren't quite enough to keep home sales from declining. Florida single-family home sales were down over 10% in 2023 compared to 2022, partly due to interest rates still being favorable for buyers in early 2022. In December, single-family sales were down less than 4% year-over-year. Similarly, condo and townhouse sales were down 16% for the year, but only fell a little over 6% year-over-year in December. 

We expect to see continued improvement in the rate of sales as we go forward in 2024, now that mortgage rates have likely peaked and there's a good possibility of the Fed starting to cut rates in the coming months. Like the rest of the country, Florida remained mired in a housing shortage throughout 2023, although inventory levels at the end of the year were higher than where they started by almost 18% for single-family homes and 53% for condos and townhouses. However, they are still below pre-pandemic levels, and while the balance has shifted somewhat toward buyers as of late, we solidly remain in seller's market territory. As of December, there were 3.6 months of single-family supply, and 5.1 months of townhouse and condo supply. 

The amount of housing supply remains too limited and the demand for housing in Florida remains too strong to support any sort of significant home price correction any time soon. In December, the median sale price for single-family homes in Florida was up almost 4% year-over-year, to $410,000. The median price for townhouse and condo sales, meanwhile, was $330,000—an increase of 6.5% compared to a year ago. 

The total dollar volume of sales for Florida single-family homes in 2023 was $148 billion. That was 8.5% less than 2022's volume but still 45% higher than the $102 billion of sales recorded 2019, the last full year before the pandemic began. Townhouse and condo dollar volume in 2023 was about $49 billion, down almost 13% year-over-year but 53% above its 2019 print of nearly $32 billion.

These are the statewide numbers, of course, but the 2024 market is going to vary from area to area. In some parts of the state, inventory levels are back to pre-pandemic levels, so be sure you have a good handle on your local market's statistics and trends as we move into 2024. So Realtors, be sure to take advantage of one of your very best member benefits—SunStats—to stay on top of the market and help your customers achieve their homeownership dreams. See you all next month.