What to Expect for the Housing Market in 2024

Due to sensationalist and fear-mongering views about market crashes floating around the internet, you might wonder what the Florida housing economy will be like next year. One realistic prediction is that it won’t be all bad, but it won’t be all good either.

A massive housing crash caused by the “housing bubble” popping isn’t expected, but normalcy is returning and cooling down out-of-control prices. Right now, we are in the midst of a housing crisis due to the rising costs of property demand, construction, and inflation in Florida. This trend isn’t sustainable and is creating a shift towards more reasonable pricing. 

Why the Florida State Housing Market is Rebalancing in 2024

Reasons why the 2024 Florida housing market could stabilize may be due to job growth and inventory. Construction expenses, mortgage rates, and other factors can still make houses expensive. 

When you think about making a move to purchase or sell property, either for yourself, life events, or investment purposes, you can take precautionary measures by waiting until the market becomes more predictable. However, this guide will help bring lucidity to the current housing market condition. 

Job Growth Continues to Climb

Housing and job opportunities are intrinsically linked, but unofficially. So much, that lawmakers are creating policies around this dynamic interaction. More houses could attract potential employees. 

Next year, the amount of job opportunities available and the consistent increase in new homes being built could keep housing prices steady. Florida has a well-rounded economy, which includes not only Tourism industries but also Aerospace, Health and Wellness, and Agriculture. 

It’s simple math that better jobs will create enough income to support bigger purchases, like a home. The only issue is that stagnant wages may require two income producers to purchase a house. 

Inventory Is Expanding

The number of houses being sold has gone down after the recent 2020 to 2021 pandemic, but not less than pre-pandemic levels. Housing inventory has gone down during pandemic levels but is beginning to increase. 

In January, 2018 there were 133,701 houses on the market, which is far better than the 53,145 available homes in the September of 2021. This is compared to the current level of 90,722 homes as of September this year. 

The housing market is shifting to a buyers’ market, meaning that sellers won’t be dictating the price. Increased competition to sell homes will drive the price down. As more houses come on the market, buyers will have numerous options to choose from. 

Even with high demand, there will be enough houses available which will prevent skyrocketing prices. 

Construction Gets More Expensive

The construction of homes continues at a steady increase. Also, the number of building permits being authorized is multiplying. This is despite construction costs going up by 17.5% in recent years. This pushes up the price by more than 20%.  

Construction spending has gone up steadily irrespective of recent economic conditions impacting the previous five years. That amount continues to increase on a month-by-month basis. 

The number of home sales is slowing down, mainly due to how expensive homes are. By next year, prices will likely begin to decline to appeal to consumers. 

Mortgage and Insurance Rates Are Hiked

Both insurance companies and banks are delivering a double punch to homebuyers. Unprecedented rates dramatically increased the cost of owning a home. 

Home insurance premiums are over 40% higher than last year. Too many insurance claims, due to severe weather, and the hike in inflation are the main drivers of this outcome.

Mortgage rates were institutionally applied by the government to slow down the exponential increase in housing costs. While this worked, it created the extra burden of an additional $100 to $200 per month for homeowners. This is an added $43,593.12 on average over a home loan’s lifetime.

Housing Market Crash Canceled in 2024? Most Probably

Ultimately, the housing market is determined by consumers unless there is an “Act of God” style event. Where consumers move, what they do for work, and how they want to live will create the atmosphere for the market. Different demographics will have various demands, as Baby Boomers, Generation X, Millennials, and Generation Z all have unique motives based on their life stages. 

The cost of living will continue to increase in general, but at least the housing market isn’t on a rampage and is becoming more manageable.  

Learn more about this topic by speaking to a licensed real estate professional. Our family-owned brokerage understands the local community market of Vero Beach, Sebastian, Melbourne, and other Treasure Coast and Space Coast towns in Florida. Find out about homes today by visiting our website. 

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