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A Changing 2022 Florida Real Estate Market Forecast: What’s Still to Come

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The U.S. housing market is undergoing a rebalancing. Visit HomeLight’s 2022 Housing Trends Hub for information on how to navigate a shifting market — whether you’re a seller, buyer, or homeowner.

The Florida real estate market is shifting quickly. Everything from inflation and interest rates to new migration patterns, inventory, and more could reshape the Florida housing market in 2022.

If you plan on buying, selling, or owning a home in Florida, the decisions you make now could pay off for years down the road. That’s why we’ve dug into the data and asked Florida housing experts to forecast the upcoming year.

In this Florida real estate market forecast, we tap into expert insights to pinpoint what Floridians can expect within the Sunshine State for the remainder of 2022, along with how upcoming trends could impact your home buying and selling plans.

What to expect from the Florida housing market for the rest of 2022

With everything from supply chain shocks to rising mortgage rates, inflation, and more rocking the Sunshine State, the Florida real estate market could be in for dramatic shifts this year. Here’s what the experts forecast will happen to the Florida real estate market during the rest of 2022:

Florida home prices may tick lower

Florida home prices have skyrocketed lately. According to Trading Economics, Florida’s All-Transaction House Price Index streaked to record highs in January of 2022. However, Elaine Samaan, a top real estate agent in Jacksonville, Florida, says prices are showing signs of softening.

“Across the board, we’re starting to see price drops, but, in my opinion, I don’t think it’s bringing it down below value,” she says. “I think sellers are just starting to realize, ‘Just because my neighbor got $60,000 over value on their price, it doesn’t mean that’s what market value is.”

Ken H. Johnson, Ph.D., a real estate economist and associate dean of graduate programs at Florida Atlantic University, says he sees room for Florida home prices to come down in 2022.

“In the eight or nine Florida metros where we measure, what we see is that prices are significantly above where they should otherwise be, based on a history of prices,” he says.

However, Dr. Johnson doesn’t believe housing prices will free-fall like they did in the last housing crash.

“You’d think we’re wildly exposed to a potential downturn,” he explains. “However, many of us believe that Florida is not set up the way it was during the last crash. There’s a huge inventory shortage this time around, and people are moving to the area in massive numbers.”

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Florida home values should hold steady

Although he says Florida home prices will likely fall off their near-term peaks, Dr. Johnson doesn’t expect Florida home values to dive dramatically. That’s because people are rushing to Florida at high rates. According to a Demographic Estimating Conference report, Florida’s population is expected to grow by more than 300,000 people per year and surpass 23 million by April 2025.

Meshell Perry, a top real estate agent in Jacksonville, says she’s seeing population booms impact home sales now. “We still have a huge influx into Florida from people from California, New York, New Jersey, and all over the place.”

As people continue to flock to Florida, home prices may recede from historic highs, but experts say home values should stay steady.

“I think the market is still continuing to find its ground, but I do think overall home values are up a lot,” explains Samaan. “I think, overall, the net equity in homes has definitely gone up. For the future, if you’re thinking about holding on or waiting, I think you’re still in a good place and the market is still strong.”

Florida mortgage rates are rising

Florida mortgage rates are climbing in 2022. According to a Time report, the average rate for a 30-year fixed mortgage in Florida rose to 5.8% in August. Some experts believe those rates will hit 7% in 2022. However, even if mortgage rates rise, they’re likely to remain well below historic highs – which popped above 18% in September and October of 1981.

“While 5% feels scary, it’s still extremely low when you look at the trend for 30-year fixed-rate mortgages over the years,” points out Samaan. “You can always refinance if rates drop to that historic low again, and if not, thank goodness that you got in when it was still at 5% and not 18%.”

Available inventory in Florida could dry up

Housing inventory is low across the country. According to Florida Realtors, just to keep up with household growth, the U.S. would need to create 3.8 million housing units. And experts say shortages could hit Florida even harder in 2022.

“We’re just not building fast enough,” explains Dr. Johnson. “It always takes time to build, but we’re building at a pace where, maybe for every two houses we need, we’re building one. We’re just falling behind.”

That means, as high construction costs loom and the population grows, Florida could face substantial inventory declines in 2022.
  • Elaine Samaan
    Elaine Samaan Real Estate Agent
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    Elaine Samaan
    Elaine Samaan Real Estate Agent at Dogwood Realty
    • Years of Experience 4
    • Transactions 81
    • Average Price Point $273k
    • Single Family Homes 69

What will drive Florida market trends in the coming months?

Florida’s housing market isn’t moving at random. Here are a few factors that could drive Florida housing market trends in 2022:

  • Rising interest rates could lower prices: As mortgage rates grow, it may be dampening demand and causing prices to inch lower.
  • High construction costs may limit inventory: Construction costs, inflation, and supply chain disruptions are all making it expensive to build in 2022. That could add to housing shortages and stop prices from falling too sharply.
  • Population booms could prop up demand: Even though living costs, mortgage rates, and high home prices may peel back demand somewhat, Florida’s population is expected to keep growing. Combine that with inventory shortages, and you can expect housing demand to remain steady.

We started this year off with unprecedented sales. I think we’re starting to see kind of a plateau, and we have seen our listings sitting a little bit longer.

How fast will Florida homes sell during the rest of 2022?

Last year, Florida’s houses were selling at historic rates. According to market data company Statista, homeowners sold a record-breaking number of Florida single-family homes in 2021. However, Florida home sales appear to be slowing in 2022.

In August, the median days to close in Florida increased by 2% month-over-month. Samaan says that home sales in Florida are shying away from recent highs, and she expects Florida home sales to flatten out throughout 2022.

“We started this year off with unprecedented sales,” says Samaan. “I think we’re starting to see kind of a plateau, and we have seen our listings sitting a little bit longer.”

How will housing trends impact Florida homebuyers and sellers?

With so much economic uncertainty hanging in the air, you may be wondering, “Will there be another housing market crash in Florida?” Although Dr. Johnson expects the housing market to cool down in 2022, he says experiencing a crash the size of the last housing crisis’ is unlikely in 2022.

Still, even if there isn’t a major housing crash this year, the real estate market is positioned to change. Here’s what Florida home sellers, home buyers, and homeowners can expect in 2022:

What Florida home sellers can expect

Thinking about selling your house in Florida? Here are a few things to plan for throughout the rest of 2022:

  • Don’t expect prices to stay high forever: You may have watched your neighbors bank enormous profits off their recent house sales, but home prices could simmer in 2022. If you want to snag the best price possible, you may want to dig into your local market, calculate the best time to sell in your area, and strategize your sale.
  • Prepare to negotiate: Chances are, buyers will gain more leverage in 2022. That doesn’t mean you need to sell for less than your home’s worth, but it’s wise to work with an agent who knows how to negotiate the finer points of a transaction. Wondering how much your house might be worth? Try our Home Value Estimator to track your home’s ballpark value.
  • Plan on high rent and living costs: In Florida, rent and living costs are likely to stay high in 2022. That means it’s a good idea to budget and plan out your post-sale living arrangements before you sell the house you’re living in. If you want to start planning now, you can use our Net Proceeds Calculator to estimate how much you will make by selling your home.

What Florida homebuyers can expect

If you’re interested in buying a Florida home in 2022, there are a few things to prepare for:

  • Expect mortgage rates to rise: Mortgage rates could continue to rise as the Fed tightens interest rates. As a homebuyer, be sure to factor in higher rates and make sure you can afford the house you have your eye on.
  • Buyers should gain an edge: In recent years, sellers have held firm control over the housing market. However, as demand eases up, buyers can expect more room to negotiate home sales in 2022.
  • Don’t expect a major collapse: Although experts believe Florida home prices will come down from their peaks, they also say not to expect a full-on crash. That means it’s probably not worth waiting for record lows before you buy in 2022.

What first-time Florida home buyers can expect

First-time home buyers in Florida may feel intimidated by the rumbling market, but knowing what to expect can calm your nerves. Here’s what first-time Florida home buyers can expect in 2022:

  • Higher mortgage rates: Although experts don’t know exactly where mortgage rates will go in 2022, first-time homeowners should prepare for them to tick higher.
  • Strained affordability: With historic inflation, high home prices, and climbing mortgage rates, it’s important for new buyers to understand what home they can or can’t afford. If you want a quick, easy way to gauge what type of house you can afford, try out our Home Affordability Calculator.
  • Lower appreciation: Experts don’t think Florida homes will lose substantial value this year, but they also say not to expect the monster appreciation rates of recent history. “I do think the end of double-digit appreciation has now occurred,” Dr. Johnson explains. “We’re just not going to see that anymore, or at least not for some time.”

What Florida homeowners can expect

If you’re a Florida homeowner who isn’t planning on buying or selling, there are still a few things to keep in mind in 2022:

  • Rent could stay hot: Even though the experts expect rent prices to cool down eventually, they’re likely to stay relatively high throughout 2022. That means renting out your home could be a solid source of income in 2022.
  • The market is chaotic: If Florida home prices start to pull back, it may be tempting to panic-sell your home and cash in before it’s too late. However, Dr. Johnson says if you don’t have a plan to sell, you may want to wait for market chaos to subside in 2022. “I think you’ll see many who own a home sit on the sidelines, let this financial hurricane pass us by, and wait until the storm moves on,” he says.
  • Appreciation may slow: Even though appreciation rates aren’t expected to continue marching up at the rates they have in the past, it doesn’t mean your home’s value will fall over the long run. As Dr. Johnson notes, “You don’t need a housing market appreciating at 12% per year. That’s not sustainable, and it ultimately creates problems. We love slow, steady growth, and that’s true for almost all financial assets.”

What Florida renters can expect

Florida rent prices are soaring in 2022, and these costs may not subside much in 2022. Although Dr. Johnson says rent could ease up eventually, he says rent prices may ultimately be hoisted up by housing inventory shortages.

Still, depending on the specific area, renting may end up being less expensive than owning. Dr. Johnson says the smartest option for someone considering renting long-term is to either look for an affordable home they can own, or rent at a discount and re-invest the money you save.

He suggests, “Do one of the two: Own, or rent and re-invest, but don’t rent and spend the extra on beer and cookies.”

Don’t navigate a changing Florida market alone

Whether you plan on selling, buying, renting, or owning in Florida, you can expect the market to morph in 2022. Experts say there’s room for home prices to nudge lower, but high demand and inventory shortages should keep home values from falling sharply. At the same time, high living costs may be here to stay, at least through 2022, as new populations continue to flood into the Sunshine State.

If you’re buying or selling a home in Florida, it may feel like you need to navigate choppy, uncharted, waters in 2022. However, by partnering with a top agent, who understands your local housing market, you can navigate the market with ease in 2022. Want to get started now? Use HomeLight’s free Agent Match tool to find a top real estate agent who has experience buying and selling in your local Florida area.

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