Florida Real Estate Market 2022 Outlook

According to different Florida housing market predictions for 2022, the state is supposed to do well this year. Does it still hold for 2023?

Table of Contents

How Has the Florida Real Estate Market Performed So Far in the Pandemic?
What’s Next for the Florida Real Estate Market?
Top 20 Florida Real Estate Market Locations to Invest in 2023

The Florida real estate market performed exceptionally well in 2021. Based on the different predictions for the 2022 Florida housing market, it was bound to outperform the previous year. One reason is economies going back to near pre-pandemic normals.

However, because of global factors such as the geopolitical conflict in Eastern Europe and the current inflation rate, will the Florida housing market remain hot? What does 2023 have in store for the Sunshine State?

In this article, we will talk about some of the things that affect the real estate market in Florida, particularly the housing sector. We will also look at the different factors that can significantly impact real estate investors who are seriously considering investing in Florida.

Finally, you’ll find out what experts say the 2023 Florida housing market will be like and how a real estate website like Mashvisor can help investors.

What does the real estate market in Florida look like for the remainder of 2022 and going into 2023? Let’s check out what the Sunshine State housing market can offer real estate investors at this time.

How Has the Florida Real Estate Market Performed So Far in the Pandemic?

Following the national real estate industry’s recovery from the housing market crash of 2008, Florida remained one of the hottest states in the US for real estate investments. All was well even into pre-pandemic Q1 2020 when it ranked 12th in the house pricing index. The predictions and forecasts were very positive for the housing market in Florida back then.

However, COVID-19 arrested not just the Florida housing market’s momentum but practically that of the entire US real estate industry. Q2 2020 data from Florida realtor groups showed how the real estate market Florida single-family home sales dropped by 19.2% from a year earlier.

As local economies started to gradually and incrementally reopen in late 2020, the real estate industry and housing market in the Sunshine State started picking up and recovered some of its lost pre-COVID momentum. Another round of predictions for 2021 was made, showing some slight optimism but not as highly positive as the previous year’s.

The Florida Realtors housing market data for 2021 reports that the number of closed sales on single-family units went up to 350,516 from the previous year’s 310,378. Considering we’re still in a pandemic, the figure is a pretty good 12.9% year-over-year increase. It gave industry experts and professionals a good feeling going into 2022, especially when predictions for the 2022 US housing market came out.

The 2022 Florida Housing Market

When it comes to the 2022 housing market in the Sunshine State, the inventory continues to grow according to Florida Realtors’ August 2022 update. However, the said report showed that despite the growth in inventory, the rate of its growth has slowed considerably.

As of August 2022, there have been nearly 64,000 single-family homes actively listed in Florida’s MLS. This is about 70% more compared to the same period last year, and is 137% more than listings in February 2022. However, the number of active listings is still close to 26% lower than pre-pandemic market conditions three years ago.

Moreover, compared to July 2022, inventory for August only rose 4%. By contrast, the month-over-month inventory in June and July were 33% and 17%, respectively.

One of the reasons why inventory growth has slowed down was a surprise improvement in home sales, which was still down by nearly 16% year over year. However, this is still an improvement compared to July when it was down by 23%. However, the main reason why inventory is pulling back is that new listings are also slowing.

August 2022’s listing for single-family homes was down 3% compared to a year ago whereas they had been up by the same number in July. Experts and analysts agree that this trend will continue for the time being as more and more homeowners are hesitant to sell during this time.

We at Mashvisor think it’s great that 2021 and 2022 saw the Florida housing market slowly recovering from the adverse effects of COVID-19. However, going into 2023, is investing in Florida housing and real estate, in general, still a smart thing to do? Let’s take a quick look at the current market conditions and some Florida housing market predictions for 2023.

What’s Next for the Florida Real Estate Market?

It is no secret to long-time real estate investors that Florida is one of the hottest markets in the country. To address the concern about how the housing market in Florida is doing, we need to look at several factors and some Florida housing market predictions that directly affect the state’s real estate market as a whole.

Population Growth

Since 2010, the population’s grown by 2.7 million new residents, bringing the number up to 21.5 million people now living in the state. The 14.6% population growth makes Florida the third-largest US state by population. In fact, 7 out of the 10 fastest-growing locations in the country in 2022-2023 are in Florida.

The state expects to welcome 845 new residents daily all the way through April 2025, representing a 1.39% compound growth rate per year. Florida areas expected to house at least 1.6 million residents over the next eight years are Palm Beach, Orange, Miami-Dade, Hillsborough, and Broward.

As a housing market, given the above predictions on population growth, Florida is still one of the most ideal investment locations for 2023.

Job Market and Economy

One of the main reasons why the Florida population is growing significantly is because it is being marketed as an ideal business location. The state’s business-friendly environment attracts high-paying job opportunities, increasing the in-migration rate. With a GDP growth of over 48% to over $1.1 trillion over the past decade, the state is anticipating the creation of even more jobs in 2023.

In September 2021 alone, there were 84,500 new jobs created in the state, bringing Florida’s unemployment rate down to 4.6%. According to the Florida TaxWatch, the labor force in Florida will grow by 2.9% at the end of 2022.

The good thing about it is job opportunities are evenly spread throughout the entire state. It means that investors can literally look for Florida houses for sale anywhere in the state and still expect some profit because of the housing demand. This makes investing in the Florida housing market in 2023 something to seriously consider.

Growing Renter’s Market

Jumping off from the previous two points, Florida continues to attract thousands of in-migrants, causing an increase in housing demand. At one point in 2021, several Florida housing markets saw a 24% increase in a matter of weeks. With things further improving in 2022, the local housing market is poised to maintain its momentum all the way into 2023.

To get a better idea of the growing housing demand in the state, consider Miami, Tampa, and Orlando. According to Mashvisor’s September 2022 report, the three metro areas recorded average monthly rental prices of $4,044, $2,606, and $2,128, respectively, for a three-bedroom home.

One of the said cities would probably be the best place to buy rental property in Florida if you’re considering going with a traditional long-term rental investment strategy in 2023.

Florida’s housing market data also shows that while there is a rising demand for rental properties due to people relocating to the state, only 34% of housing units are being rented out. It means that there is a lot of room for growth in the traditional rental market in 2023.

Let’s not forget about vacation rentals. Florida remains one of the top tourist destinations in the US, attracting over a hundred million visitors annually. Although the pandemic brought down tourist numbers in the Sunshine State, 2021 was still a pretty strong year as it hosted 122.1 million visitors.

With the easing of travel restrictions, the number of tourists is expected to be higher in 2022, increasing the likelihood of a spike in Airbnb demand. Florida tourism already registered a 20% year-over-year growth going into Q3 2022. At this rate, the demand for more Airbnb properties is bound to go up by 2023.

Housing Affordability

FreddieMac publishes its House Price Index (HPI) monthly, which indicates house appreciation and the percentage of change in prices. According to the HPI, the prices for Florida housing have increased by 156% since October 2000. The last five years have seen market prices in the Sunshine State go up by almost 66%.

As of September 2022, Mashvisor’s data shows that the median property price in the Florida housing market is $657,052. Predictions for next year’s Florida housing market say that prices will continue to go up.

Real estate professionals make side-by-side-by-side comparisons of median housing prices, median family incomes, and mortgage rates to determine housing affordability in Florida. According to US News and World Report, Florida ranked 31st in housing affordability. Among all the 50 states, Florida is one of the more expensive housing markets in the country today.

With predictions – and the likelihood – of prices going up in 2023, you need to be thorough with your research and study of the Florida housing market before you go all in. The good thing about investing now is you can access a website like Mashvisor that can help you perform accurate real estate market analysis.

Mashvisor offers users access to a large database that covers not only every market in Florida but nearly all housing markets in the US. You can use Mashvisor’s real estate comps for a more accurate and realistic investment property analysis. It makes the process of finding the most promising investment property in the most profitable markets a lot easier and faster.

To learn more about how Mashvisor can help you find profitable investment properties, schedule a demo.

Quality of Life

Lastly, the housing market in the Sunshine State keeps getting hotter and hotter by the day because of the quality of life it offers its residents. People choose to live and work in sunny Florida because of the healthy work-life balance it affords workers.

In addition, living in a place with excellent subtropical weather all year long, a robust economy, lots of job opportunities, an outstanding educational system, numerous outlets for recreation, and cultural appreciation is as close to living out the American dream for most people. In fact, Florida is one of only eight states with no state-level personal income tax.

All of the above factors make moving into Florida a very attractive option for those who are looking to move to a different place. They are why in-migration rates in Florida keep going up by the year. Consequently, as people come in droves to settle in sunny Florida, the local housing market is booming as demand for housing goes up.

Given that housing prices are on the expensive side in Florida, the demand for rental properties is also on the uptick. It makes looking into the local housing market for rental properties a viable and sustainable option for investors going into 2023.

Mashvisor’s Florida Real Estate Market Data

At Mashvisor, we keep track of numerous housing markets across the country, including the ones in Florida. Thousands of real estate investors trust our website because of the quality of the data we provide.

We gather our data from highly reliable and reputable sources to provide investors with the most accurate and up-to-date housing market information for investment properties.

We do our best to regularly update our massive database so investors can perform the most accurate data analytics as part of their due diligence.

To start looking for and analyzing the best investment properties in your housing market of choice, click here.

That being said, we’ve listed below the most recent updates on the Florida housing market based on the data we gathered from over six million investment properties, two million-plus traditional rental properties, and another two million-plus short-term rental properties based on Airbnb comps.

Mashvisor’s September 2022 location report shows the following data for the Florida housing market on a state level:

Median Property Price: $657,052
Average Price per Square Foot: $404
Days on Market: 79
Monthly Traditional Rental Income: $2,556
Traditional Cash on Cash Return: 2.70%
Traditional Cap Rate: 2.76%
Price to Rent Ratio: 21
Monthly Airbnb Rental Income: $2,961
Airbnb Cash on Cash Return: 2.35%
Airbnb Cap Rate: 2.40%
Airbnb Daily Rate: $229
Airbnb Occupancy Rate: 47%
Walk Score: 49

Mashvisor helps real estate investors find the best property based on their preferences and analyze them using the relevant metrics.

As an investor, you need to know two very important things about any housing market:

1. The Most Efficient Metric to Use to Determine Profitability is Cash on Cash Return

Understanding the difference between cash on cash return and cap rate plays an important role in how an investor conducts a feasibility study.

While a cap rate can be used to determine the return on investment, cash on cash return takes into consideration the property’s acquisition or financing method. After all, not everyone brings deep pockets with them to their investing journey. A lot of investors need to resort to financing options to purchase an investment property.

The typical cash on cash return formula takes the property’s projected annual net operating income and divides it by the total amount of cash used to buy the property. On the other hand, calculating the cap rate does not factor in the financing method. By going with cash on cash return, investors get a pretty good idea of how much profit they can receive with every dollar they invest.

2. Price to Rent Ratio Helps Investors Determine Whether It’s Better to Buy a House or Rent One in a Particular Location

The price to rent ratio lets investors strategize accordingly. In such a case, you’re looking for an investment property in Florida. By knowing the price to rent ratio of a certain location, you can identify the different real estate investment strategies that will work well for you.

Fix and flips may work better in locations where buying a house is more practical for people than renting one. Then, there are housing markets where rental property strategies are much more profitable compared to house flipping.

A low price to rent ratio of 14 and below means that it’s better for people to just buy a property than rent one. A medium score of 15 to 19 suggests that the local housing market shows a balance between house rentals and property purchases. A high score of 20 and above implies that it’s better for people to just rent a house than buy one.

With the above information in mind, investors can either choose another location that will help them achieve their investment goals. Or, they can compromise and come up with the right strategy that will still allow them to make a good profit in whatever housing market they choose.

Top 20 Florida Real Estate Market Locations to Invest in 2023

Serious real estate investors who wish to take advantage of Florida’s red-hot housing market ought to keep a close eye on the following 20 locations, especially if they’re looking for rental properties to invest in.

Investors will do well to take into account the current housing market conditions, as well as some Florida housing market predictions for 2023, before making any decision.

That being said, we’ve provided the relevant data for each housing market so that investors can see if the math checks out by using a rental property calculator.

10 Best Locations in Florida for Traditional Rental Properties in 2023

The following locations are ranked based on their average cash on cash return. We combed through Mashvisor’s September 2022 report from its massive database to come up with the list below. We’ve filtered the list based on the following:

Each location should have no less than 100 traditional rental properties listed.
Each of them should cost no more than $1 million. It will be easier for you to find the right properties by computing the potential income based on the median property price using the 1% Rule or 2% Rule, whichever you prefer.
Each market must not have a monthly traditional rental income of less than $2,000. The more you make monthly in rental income, the faster the return on investment will be.
Each area should have a traditional cash on cash return of 2% and above to guarantee a more positive cash flow.
The price to rent ratio of each location must have a (high) score of 20 and above, which makes renting a more practical decision for most people.

Based on Mashvisor’s September data, here are the top ten housing locations in the Florida real estate market for traditional rental properties:

1. Vero Beach

Median Property Price: $707,039
Average Price per Square Foot: $291
Days on Market: 80
Monthly Traditional Rental Income: $2,647
Traditional Cash on Cash Return: 4.40%
Traditional Cap Rate: 4.51%
Price to Rent Ratio: 22
Walk Score: 78

2. Bradenton

Median Property Price: $600,566
Average Price per Square Foot: $318
Days on Market: 59
Monthly Traditional Rental Income: $2,498
Traditional Cash on Cash Return: 3.53%
Traditional Cap Rate: 3.62%
Price to Rent Ratio: 20
Walk Score: 47

3. Stuart

Median Property Price: $694,342
Average Price per Square Foot: $356
Days on Market: 61
Monthly Traditional Rental Income: $2,778
Traditional Cash on Cash Return: 3.31%
Traditional Cap Rate: 3.38%
Price to Rent Ratio: 21
Walk Score: 39

4. Riviera Beach

Median Property Price: $695,505
Average Price per Square Foot: $415
Days on Market: 84
Monthly Traditional Rental Income: $2,821
Traditional Cash on Cash Return: 3.27%
Traditional Cap Rate: 3.35%
Price to Rent Ratio: 21
Walk Score: 43

5. Hallandale Beach

Median Property Price: $908,024
Average Price per Square Foot: $460
Days on Market: 89
Monthly Traditional Rental Income: $2,904
Traditional Cash on Cash Return: 3.24%
Traditional Cap Rate: 3.35%
Price to Rent Ratio: 26
Walk Score: 79

6. Palm Beach Gardens

Median Property Price: $967,136
Average Price per Square Foot: $432
Days on Market: 55
Monthly Traditional Rental Income: $3,980
Traditional Cash on Cash Return: 3.24%
Traditional Cap Rate: 3.29%
Price to Rent Ratio: 20
Walk Score: 2

7. Melbourne

Median Property Price: $499,595
Average Price per Square Foot: $258
Days on Market: 54
Monthly Traditional Rental Income: $2,060
Traditional Cash on Cash Return: 3.21%
Traditional Cap Rate: 3.29%
Price to Rent Ratio: 20
Walk Score: 73

8. Tampa

Median Property Price: $614,497
Average Price per Square Foot: $344
Days on Market: 77
Monthly Traditional Rental Income: $2,606
Traditional Cash on Cash Return: 3.19%
Traditional Cap Rate: 3.26%
Price to Rent Ratio: 20
Walk Score: 47

9. Fort Myers

Median Property Price: $544,487
Average Price per Square Foot: $289
Days on Market: 73
Monthly Traditional Rental Income: $2,131
Traditional Cash on Cash Return: 3.11%
Traditional Cap Rate: 3.20%
Price to Rent Ratio: 21
Walk Score: 26

10. Naples

Median Property Price: $954,356
Average Price per Square Foot: $481
Days on Market: 80
Monthly Traditional Rental Income: $3,346
Traditional Cash on Cash Return: 3.00%
Traditional Cap Rate: 3.05%
Price to Rent Ratio: 24
Walk Score: 29

To start looking for and analyzing the best traditional rental properties in the Florida housing market and other real estate markets in the country, click here.

10 Best Locations in Florida for Short-Term Rental Properties in 2023

Just like the previous list of most profitable housing locations for traditional rentals, the following list for vacation rental property locations was also taken from Mashvisor’s September report. Each location is ranked based on its cash on cash return, starting with the highest number.

The filters used to come up with this list are quite similar to the ones used for the traditional rental markets list, albeit with a couple of differences.

Each location should have no less than 100 Airbnb rental properties listed.
Each of them should cost no more than $1 million. It will be easier to find the right properties by computing the potential income based on the median property price using the 1% Rule or 2% Rule, whichever you prefer.
Each market must not have a monthly Airbnb rental income of less than $2,000. The more you make monthly in rental income, the faster the return on investment will be.
Each area should have an Airbnb cash on cash return of 2% and above to guarantee a more positive cash flow.
The Airbnb occupancy rate of each location must not be below 50% to guarantee a good vacancy-occupancy rate. The higher the occupancy rate, the better the monthly rental income.

According to Mashvisor’s September data, the following ten housing locations are ideal for short-term vacation rental property investments:

1. Sweetwater

Median Property Price: $584,713
Average Price per Square Foot: $352
Days on Market: 63
Monthly Airbnb Rental Income: $5,023
Airbnb Cash on Cash Return: 7.65%
Airbnb Cap Rate: 7.80%
Airbnb Daily Rate: $166
Airbnb Occupancy Rate: 51%
Walk Score: 82

2. Brandon

Median Property Price: $433,342
Average Price per Square Foot: $249
Days on Market: 44
Monthly Airbnb Rental Income: $3,893
Airbnb Cash on Cash Return: 5.79%
Airbnb Cap Rate: 5.91%
Airbnb Daily Rate: $172
Airbnb Occupancy Rate: 58%
Walk Score: 74

3. Palm Bay

Median Property Price: $350,647
Average Price per Square Foot: $210
Days on Market: 75
Monthly Airbnb Rental Income: $3,057
Airbnb Cash on Cash Return: 5.41%
Airbnb Cap Rate: 5.54%
Airbnb Daily Rate: $137
Airbnb Occupancy Rate: 56%
Walk Score: 45

4. Lakeland

Median Property Price: $388,530
Average Price per Square Foot: $211
Days on Market: 58
Monthly Airbnb Rental Income: $3,308
Airbnb Cash on Cash Return: 5.34%
Airbnb Cap Rate: 5.47%
Airbnb Daily Rate: $124
Airbnb Occupancy Rate: 62%
Walk Score: 36

5. Inverness

Median Property Price: $321,395
Average Price per Square Foot: $198
Days on Market: 49
Monthly Airbnb Rental Income: $2,652
Airbnb Cash on Cash Return: 5.12%
Airbnb Cap Rate: 5.28%
Airbnb Daily Rate: $172
Airbnb Occupancy Rate: 51%
Walk Score: 34

6. Navarre

Median Property Price: $619,702
Average Price per Square Foot: $299
Days on Market: 53
Monthly Airbnb Rental Income: $4,434
Airbnb Cash on Cash Return: 4.88%
Airbnb Cap Rate: 4.97%
Airbnb Daily Rate: $231
Airbnb Occupancy Rate: 54%
Walk Score: 5

7. University Park

Median Property Price: $629,251
Average Price per Square Foot: $365
Days on Market: 16
Monthly Airbnb Rental Income: $4,827
Airbnb Cash on Cash Return: 4.82%
Airbnb Cap Rate: 4.90%
Airbnb Daily Rate: $159
Airbnb Occupancy Rate: 56%
Walk Score: 69

8. Ocala

Median Property Price: $356,960
Average Price per Square Foot: $194
Days on Market: 62
Monthly Airbnb Rental Income: $2,794
Airbnb Cash on Cash Return: 4.72%
Airbnb Cap Rate: 4.87%
Airbnb Daily Rate: $149
Airbnb Occupancy Rate: 56%
Walk Score: 62

9. Deer Island

Median Property Price: $418,158
Average Price per Square Foot: $215
Days on Market: 137
Monthly Airbnb Rental Income: $3,209
Airbnb Cash on Cash Return: 4.66%
Airbnb Cap Rate: 4.78%
Airbnb Daily Rate: $146
Airbnb Occupancy Rate: 50%
Walk Score: 7

10. Fern Park

Median Property Price: $338,133
Average Price per Square Foot: $206
Days on Market: 46
Monthly Airbnb Rental Income: $3,164
Airbnb Cash on Cash Return: 4.64%
Airbnb Cap Rate: 4.76%
Airbnb Daily Rate: $151
Airbnb Occupancy Rate: 59%
Walk Score: 57

To start looking for and analyzing the best Airbnb properties in the Florida housing market and other hot cities and neighborhoods, click here.

The Bottom Line

With Florida’s 2022 momentum spilling over into 2023, real estate investors should give investing in the Florida real estate market some serious consideration.

It will be a lot beneficial to you if you take into account the current market condition and the different Florida housing market predictions from industry experts. They will allow you to come up with a well-informed decision reinforced by the most appropriate strategies.

With the right investment strategy in the right housing location, investors can end up owning a gold mine of a property.

But just because the Sunshine State is a top industry performer doesn’t mean you can afford to throw caution to the wind. As an investor, you still need to perform your due diligence to ensure you make the wisest and most informed investment decision. With the help of Mashvisor, you can increase your chances of success in real estate investing.

To get access to our real estate investment tools, click here to sign up for a 7-day free trial of Mashvisor today, followed by 15% off for life.

Start Your Investment Property Search!

Florida Housing Market Predictions: What Will Happen in 2023?