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2022-2023 Florida Housing Market Predictions

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Predicting housing market shifts and movements is vital to knowing when to buy, when to sell, and when to hold on for dear life. We've seen some housing markets in Florida experience significant shifts like the rest of the housing market thanks to factors such as inflation and worldwide economic events.

It’s impossible to know the future with any certainty, but looking at recent events and statistics can help you predict the Florida housing market with much more accuracy than otherwise. Read on for an analysis of likely developments in the 2022-2023 Florida housing market.

Inflation and the Housing Market

By February 2022, national inflation had hit a multi-decade high, rising to 7.9% (an increase of 0.4% from January 2022). At the time of this writing, the inflation rate is 7.7%, having just reached an overall peak of 8.5% in August of 2022.

Thus, while inflation is very slowly declining, it is not showing any real signs of slowing down or getting to pre-pandemic levels just yet. For reference, the average inflation rate was 1.8% in 2019 and 1.2% in 2020. Naturally, high inflation can and will continue to have important effects on Florida’s real estate market (and the real estate market of the country overall).

While real estate is an important hedge against inflation, more inflation increases the prices for goods and services, reducing the spending power that average Americans have. Landlords can raise their prices for rental properties, but those looking to get in on the Florida real estate market may find it difficult or impossible to get a mortgage.

With high mortgage rates, buyers have less purchasing power. Housing prices usually rise along with inflation, although not as much as other common assets. We’ve already seen how Florida’s real estate market prices have increased alongside inflation.

Now that inflation has begun to decrease, we’ve also seen a slight decrease in Florida’s housing prices. Still, it’s likely that the 2023 housing market will only be a little cheaper than the 2022 market overall.

A Peak and a Decline

Housing markets tend to go through cycles of peaks and declines. The housing data aggregator and real estate marketing website Zillow released a 2022 prediction about the values of real estate throughout the upcoming year.

In February 2022, Zillow predicted that home growth would continue to accelerate throughout the spring of this year and peak at 21.6%. This prediction largely came true. The median home price in Florida reached a peak of $420,000 in the Spring of 2022.

However, Florida’s overall housing market prices have steadily declined (with some exceptions in major metropolitan areas like Miami). The median sale price for a single-family home in June 2022 remained at $420,000. By July 2022, the median sale price had dropped to $412,303. In October we saw another decline in the median sale price, reaching $401,990

That said, Q2 of 2022 had a higher median sale price compared to Q1 ($385,000compared to $417,000). The general trend of declining home prices should continue into 2023 in many Florida markets, however there are some markets, specifically in South Florida that are expected to see a 3.4% increase in prices in 2023. 

Get a detailed breakdown on South Florida real estate performance in Q3 2022 >>>

Florida City Housing Peaks

Many of Florida’s most attractive and desirable cities have seen record home value peaks throughout 2022. These cities include:

Because of the general decrease in Florida home prices, we expect these peaks to decline slightly throughout 2023. However, an initial decline throughout winter, followed by a return to peak prices, is also possible in the latter half of 2023 depending on external market factors, buyer confidence, and other aspects.

More Sales, More Inventory

Part of the reason for the above (gradual) decline could be due to temporarily increased housing inventory and less home sales. The same data from Florida Realtors indicates that there has been a significant increase in new listings from Q1 to Q2, going from 91,816 listings in the first quarter and reaching 112,457 listings in the second quarter.

As one of the most important laws of economics, more housing inventory leads to slightly lower housing prices. However, people are still very willing to buy, keeping prices from crashing — at least for now.

The Housing Supply Will Dry Up Quickly

Although the housing supply has increased over 2022, 2023 may see it decrease significantly. The war in Europe between Russia and Ukraine has significantly affected the global economy. Not only has it contributed to high inflation, but it has also contributed to higher food prices and higher construction supply costs.

For example, Ukraine — as well as countries like Germany, Poland, and Belarus — is one of the most important manufacturers of window systems for home developers in the US. Despite Russia's small economy, this larger nation has caused major impacts on housing supplies and materials.

Thus, investors should not expect the current increase in home listings to sustain itself throughout the end of 2022 and into 2023. In reality, the housing market will soon face a listing shortage, particularly if most investors or property owners decide to hold onto their homes or apartments rather than sell them.

Possible Winter Slowness

On top of that, winter always sees a decline in home sales. Most people like to purchase homes in spring or summer, when the weather is better for touring houses and when kids are on summer break so families are more likely to move from place to place. Winter is oftentimes seen as a poor time to move because it's colder, the roads are more dangerous, and families don't like to move when their kids are in the middle of their school years.

Thus, we may see an uptick in home prices and a decline in available listings in early 2023. These aspects could reverse as spring arrives and gives way to summer, but it’s impossible to predict with any accuracy given the factors mentioned above and below.

Foreign Ownership of Miami Homes

Many commenters have spoken about foreign homebuyers purchasing single-family homes and apartment complexes for investment opportunities. In 2016, the Financial Crimes Enforcement Network or FinCEN confirmed that Miami, alongside Manhattan, was a major hub of money laundering and foreign investments. In fact, Sunny Isles Beach in Miami-Dade County specifically is sometimes called Little Moscow since many Russian investors buy luxury homes in this area.

Unfortunately, foreign ownership of Miami and other Florida homes has a net negative impact on the real estate economy. Many of these investors purchase homes, increase the prices significantly, and lock out average Americans from purchasing real estate. This forces people to rent more frequently, further diluting their spending power.

Foreign ownership of Miami homes may increase given the current Russian and Ukraine war, or it may decrease depending on how the war turns out. In 2023, however, investors should not assume that foreign ownership of Miami homes will decrease. If anything, the Miami real estate supply should lock up or become more inflexible, not become more flexible.

More Cash Buyers and Faster Sale Times

Cash buyers — investors who purchase homes with cash, oftentimes for discounted prices so that sellers can take advantage of the fast turnaround time — have been scooping up Florida properties for years. Cash buying is even more prevalent among house flippers or investors, especially aspiring landlords who wish to purchase multiple properties, renovate or upgrade them, then rent them out for passive income.

The influx of cash buyers and faster sale times has resulted in major shifts to the Florida housing supply, as seen with the data from Florida Realtors. The median time to sale was 53 days in Q1 of 2022, while it was only 49 days in Q2 of 2022.

This trend should continue into 2023. We may even see the median time to sale for Florida real estate drop to less than a month by the end of 2023 if these trends continue.

Is It a Good Time To Buy?

In many cases, yes.

Florida's housing market is slowing down, not stopping, or even crashing for the time being. That said, plenty of commentators speculate that there could be a housing market slowdown in 2023, caused due to over-speculation, housing prices that are too high for the average American, and a variety of other factors.

People have always predicted crashes, and they are not always correct. It could instead be that 2023 will see even higher peaks, particularly starting in spring and/or the latter half of the year. In that case, buying now, during a temporary dip in this real estate bull market, could be wise.

Bottom Line

Ultimately, Florida's housing market will likely decline somewhat at the beginning of 2023. However, as the weather gets better and as investor confidence returns, we could see another major peak in housing prices, particularly if the root causes of historically high real estate costs are not addressed.

Speed is absolutely key in the modern Florida real estate market. That’s why you should work with Vaster. When it comes to buying or refinancing, Vaster can help with our team of knowledgeable loan specialists, complete transparency, and a streamlined application process. Contact us today to learn how we can help you achieve your real estate goals.



Current US Inflation Rates: 2000-2022 | US Inflation Calculator

Florida Home Values | Zillow

Monthly Market Summary - June 2022 Florida Single-Family Homes | Florida Realtors

Monthly Market Summary - July 2022 Florida Single-Family Homes | Florida Realtors

Monthly Market Summary - August 2022 Florida Single-Family Homes | Florida Realtors

Quarterly Market Summary - Q1 2022 Florida Single-Family Homes | Florida Realtors

Quarterly Market Summary - Q2 2022 Florida Single-Family Homes | Florida Realtors

Miami Home Values | Zillow

TampaHome Values | Zillow

Orlando Home Values | Zillow

FinCEN Takes Aim at Real Estate Secrecy in Manhattan and Miami | Fincen

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