What does the future hold for Florida real estate? You might find yourself pondering that question with 2025 just around the corner. While it’s impossible to say with 100 percent certainty what lies in wait for Florida real estate during the upcoming year, we can speculate based on the current state of the industry and insights from real estate analysts and experts.

Overall, the future still looks bright for the Sunshine State, thanks to the enduring appeal of its warm weather, tropical scenery and steady economic growth. Here are some notable Florida real estate trends to watch in 2025.

1. Florida housing markets will continue to be some of the hottest in the nation.

The Sun Belt dominates the top 10 housing markets for 2025 due to factors such as younger populations, recent sales growth likely to continue in the future, and significant inventory, including new construction, according to Realtor.com. Florida claims two of the 10 top markets for the upcoming year, with Miami-Fort Lauderdale-Pompano Beach ranking second and Orlando-Kissimmee-Sanford coming in sixth.

2. The Cape Coral-Fort Myers market will likely see substantial growth.

The Realtor.com 2025 Housing Forecast lists this Southwest Florida real estate market among the top 20 in the country. The Cape Coral and Fort Myers metro area ranks at No. 16, with a projected combined 2025 existing home sales and price growth rate of 22.8 percent. 

3. Continued population growth will bolster Florida markets.

As of April 1, 2024, Florida’s population exceeded 23 million people for the first time, according to the state Demographic Estimating Conference. From April 1, 2024, to April 1, 2028, the Conference projects that the state will average 319,109 net new residents per year, or 874 per day. This influx will fuel demand for Florida real estate, including single-family homes and condos.

4. Mortgage rates could stay high, depending on nationwide economic conditions.

If the U.S. economy remains robust and the new president implements proposed tariffs and tax cuts, Redfin economists predict that the Federal Reserve will only reduce its policy rates twice in 2025. Tax cuts will increase the nationwide deficit, and tariffs could exacerbate inflation, keeping mortgage rates at nearly 7 percent during the upcoming year. However, Redfin notes that mortgage rates could also dip if tariffs and tax cuts aren’t implemented as planned or the economy weakens. 

If you’re looking for your ideal house, condo, commercial real estate, or land in Southwest Florida, the Avalon Suncoast team is here to help. Explore your Florida real estate options today by calling 941-235-7474 or emailing sales@avalonsuncoast.com.

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1. The South Florida housing market will stay strong.

Earlier this year, we noted that Florida contained four of the top 10 housing markets in the country, according to Bankrate. The factors that fueled that trend – relatively low median home prices, no state income tax, and balmy weather – will likely continue to make South Florida properties hot commodities during the upcoming year.

For example, the median sales price of a new one-family home was $387,700 in the South in Q3 2023, compared to $431,000 for the U.S. overall, according to the Federal Reserve Bank of St. Louis. Meanwhile, in November 2023, Florida outpaced the nation at large in labor force growth for the 29^th month in a row, according to a FloridaCommerce press release.

Continued economic growth and attractiveness as a prime place to relocate should sustain demand for both residential and commercial properties in the region in 2024.

2. Mortgage interest rates will potentially peak.

National Association of Realtors (NAR) Chief Economist Lawrence Yun has predicted that mortgage interest rates will stop climbing and could decline to 5.5 or 6 percent over the course of the next couple of years, according to the Bankrate article “Housing market predictions: The forecast for the next 5 years.”

3. Home prices will likely decline in the Cape Coral-Fort Myers area.

The global property information, analytics, and data solutions provider CoreLogic has forecast a very high probability for single-family home prices to drop in 2024 in the Cape Coral and Fort Myers metropolitan area. The home price forecast is based on public record, servicing, and securities real estate databases.

4.  The Live Local Act will fuel development in major metro areas.

Florida’s Live Local Act intends to boost affordable housing development. The legislation has already spurred new housing projects in the state, according to CoStar and The Wall Street Journal, and that trend will likely continue in the upcoming year.

If you’re looking for your ideal house, condo, commercial real estate, or land in Southwest Florida, the Avalon Suncoast team can help you. Get started today by calling 941-235-7474 or emailing sales@avalonsuncoast.com.

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Sales of single-family homes located in the area rose 0.8% in the second quarter of this year compared to last year. Homes priced under $300,000 tend to sell best. Perhaps it is time to consider whether it is the right time for you to invest in the Southwest Florida real estate market.

Currently, Southwest Florida looks like an attractive investment for future homeowners. With a steady stream of buyers moving to the Sunshine State and buying in the Southwest Florida real estate market, acting now will put you ahead of the curve when the prices predictably go up in 2019.

There are more reasons why it is time to consider investing or even selling your Southwest Florida property:

1. As of October, 2018 mortgage rates in Florida are 4.73% for a 30-year fixed and 4.02% for 15-year which is still considered quite low.
2. Limited resale inventory, homeowners looking to sell their property often receive multiple offers. The continuing increase in home prices and higher re-sale value of homes in the area are driving demand and creating some difficulty for buyers. In fact, a recently listed homes or lots can sell in as little as 3 days!
3. New projects are planned to break ground in the area. Just one of the many is Allegiant Air’s $420 million Sunseeker Resort Charlotte Harbor in Port Charlotte. Where there is major development in an area, property prices tend to rise. You might want to seriously consider buying a home promptly or lose that window of opportunity.

The last quarter of 2018 is indeed very exciting for the Southwest Florida real estate market! We can’t wait for more developments to come.

Greg Boland
Suncoasteam Realty LLC,
C-941-979-0482
greg@suncoasteam.com
https://www.sctre.com

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However, if a seller is still amenable to an FHA mortgage, they should be sure to place a specific dollar cap on repairs that the FHA requirements for a seller would demand. Even a home that seems well maintained can reveal some of the following FHA defects.

Repairs That Must be Completed for FHA approval

Peeling paint in homes built before 1978 Lead Based Paint rules
Broken, damaged or unpainted gutters and downspouts
Exterior doors that do not operate properly
Exposed wiring
Major plumbing problems
Broken A/C systems
Leaky or defective roofs, roofs with a life expectancy of less than 3 years
Active and visible pest infestation
Rotting exterior wood items.
Rotting Window frames and sills
Missing appliances that are customarily included with a home
Bedrooms without minimize-sized windows or obstructions preventing egress
Foundation or structural defects
Inoperable kitchen appliances
Empty pools or those without a working pump or other defects
Torn house or lanai screens
No pressure relief valve on water heater
Damaged fencing

Repairs That are Not Necessary to Fix Before Closing

Peeling paint in homes built after 1978 (Not Lead Based Paint)
Cracked glass
Minor plumbing defects
Damaged wall coverings in homes built after 1978 (Not lead based paint)
Worn flooring
Beat-up or damaged exterior doors that operate properly
Removal of debris
Evidence of previous or inactive pest infestation
Replacement of flat roofs
Water tests

A seller of improved real estate should be aware of FHA Requirements for a Seller. If accepting a contract with an FHA contingency, a seller should be sure to limit their repair exposure. Discuss the implications with your agent.

Search Southwest Florida Real Estate

For more info on FHA loans visit the HUD website

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Analyzing the right time to buy a home in Southwest Florida, otherwise known as “Market Timing”, is difficult to calculate. Personal and societal economics are in constant change. Nevertheless, we all need someplace to live and a home is one of our biggest investments. Even if you are considering a second home, it is a large consideration.

During the past several years, especially the last two, prices for homes and condos in Southwest Florida have climbed and the deals that came during the downturn are gone. That is not to say that we’ve rebounded to the peak or that there are no deals to be had. A prudent shopper with the aid of a dedicated real estate agent will always find the best deal in the market to buy a home in Southwest Florida. However, all is relative. A great deal today may be 10 or 20 percent higher than it was only three years ago.

Economists report that home prices increased 5.5% during 2017. That means a home priced at $200,000 in 2016 had increased to $211,000 during 2017. If home price appreciation returns to a more normal and sustainable level in 2018, that is 2.5% – 3% increase, that same home would again cost more. A low end increase of 2.5% would make a $211,000 home cost $216,265 the next year and $221,672 the year after that, more than $21,000 increase in two years.

Perhaps even more important than home price appreciation is an increase in mortgage rates. the cost of a mortgage has been at historic lows through the last decade. However, when the Federal Reserve sets the target level of federal funds rates, banks usually adjust their mortgage rates. Most economists expect that rate to rise in 2018 and hold as long as the economy remains steady.

As of this writing (1/8/2018), mortgage rates are below 4% (one quote I found was 3.875% for a 30 year fixed and 3.375 for a 15 year fixed). Using those numbers, a $200,000 home, 20% down payment, $160,000 mortgage at 3.875% would cost $752.38 per month, principal and interest (This does not include escrows for taxes and insurance). If mortgage rates for the same home and loan amount reach 5% as predicted, the monthly payment would increase to $858.91, an increase of over $100 per month. With taxes and insurance, that total can be over $1,200 per month.

Many people who hope to buy a home in the next year will move those plans up due to these numbers. Purchasing a home now, can save tens of thousands of dollars over the life of a mortgage and even if one purchases with cash, the saving can be significant.

For more information on purchasing a home in Southwest Florida, please call or email Your Suncoasteam, 941-235-7474 or sales@avalonsuncoast.com.

And if you wish to browse the market, click here to search the Southwest Florida MLS.

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