Florida Housing Market Predictions for 2022

Real estate gurus are predicting that the Florida housing market will stay hot throughout 2022, as we mentioned earlier. However, Florida REALTORS® Chief Economist Dr. Brad O’Connor said the only factor that might change things a bit is the impact of increasing mortgage interest rates.8

1. Higher Mortgage Rates Could Slow Price Growth
Higher mortgage rates might make unprepared home buyers pause on their purchasing plans. If that lowers buyer demand enough in certain Florida markets, it could result in slower price growth. Slower price growth could help remaining buyers who can handle higher rates feel more confident about finding a home they can afford.

2. Home Sales Will Go Down a Bit
For the last 15 years, the supply of new homes in Florida has been trailing behind population growth.9 Top that off with the increase of post-pandemic migration to Florida and that creates a huge gap in supply and demand—which drives home prices up. As a result, buyers feel less confident about finding a home they can afford. And that leads to fewer home sales.

But Florida experts think this could actually end up being a positive factor that’ll help the long-term health of the market. After all, it’s not like home sales will drop to zero—experts think there will just be less of them. For example, instead of getting 15–20 offers, a good house might get four or five offers in this market.

That’s not a bad deal for both buyers and sellers. And it could make homeowners who are thinking of selling feel more confident about finding a new home, which could lead to more listings in 2022.

3. Affordable Homes Will Be in High Demand
Okay, reading that might have you saying “no duh.” But hear us out. O’Connor noted that in the first half of 2021 there was a never-before-seen explosion of affluent buyers from the Northeast and California moving to Florida. And, of course, this drove prices up on luxury homes. For example, last year one in every five home sales in Miami-Dade sold for $1 million or more, compared to one in 13 sales a few years ago.10 In other words, luxury homes took the spotlight in 2021. But in 2022, experts think buyer demand for luxury homes will level off and shift to more affordable homes—like ones in North Port and Naples.11

4. Florida’s Smaller Markets Will Receive More Attention
The real estate gurus predict that 2022 will be about Florida’s west coast. As the popularity of remote work continues to grow, they believe people will continue to move from major cities to find a slower-paced lifestyle with a little more “legroom.” This trend could spotlight smaller markets like the Panhandle, Lakeland, Fort Myers and Melbourne, which are generally more affordable compared to Florida’s larger metros.12

Keep in mind, Florida housing market forecasts like these are about as reliable as a weather forecast—no one can predict what’s going to happen with 100% accuracy. They can only give you an idea of what to expect if you buy or sell a house in the coming months.