How Much Do Homes Cost in Florida?
The median price to buy a home across the state of Florida is around $405,000, which is slightly lower than the national average. However, it also largely depends on where you live. For example, the median price of a home in Miami is around $560,000, while in Palm Beach, it’s around $2.4 million.
But in Jacksonville, the median price is approximately $313,000, and in Orlando, it’s just under $390,000. So, while you can find plenty of luxury beachfront properties, you can also find more affordable housing. Florida is a diverse state with many cities and small towns, so you can easily find something of interest no matter what you’re looking to purchase.
Are Housing Prices Dropping in Florida?
It depends on where you live. Florida home prices have exploded at an astronomical rate over the past few years, which the pandemic has only exacerbated. Housing prices have increased by 135% over the past decade and 16.4% since August of last year.
But with rising interest rates and inflations scaring away some home buyers, prices in certain areas have started to drop slightly. For example, Miami Dade and neighboring Broward county experienced a slight dip from the summer into the fall of 2022. But most experts say it’s more a correction to the explosive growth than a sign of a weak market, and statewide prices have continued to increase steadily throughout the year.
When is the Best Time to Buy in Florida?
Generally, April is the best time of year to buy a home in Florida. That’s when listing prices are the lowest, and the housing inventory is the highest, so you have the most options. The spring is a great time to look for a home in Florida because the weather is beginning to get warmer, but it isn’t quite as humid as the summertime.
However, if you’re looking for the lowest interest rate, December is the best month. There won’t be as much inventory because fewer sellers tend to list in the winter. But lenders often adjust for the slowing in demand by dropping interest rates.
Average Florida Down Payment
The average down payment on a home in Florida is around $27,450. While most lenders recommend that you put down 20% at closing to avoid private mortgage insurance, not all borrowers can make that upfront investment.
The average down payment in the US is only 6%. While conventional lenders recommend 20% down, government-backed loan programs like FHA loans only require 3.5% down, while VA and USDA loans offer zero down mortgages, which brings down the average. $27,450 is about 6.7% of $405,000, the median price of a home in Florida, which is only slightly above the national average.
What Salary Do You Need to Buy a House in Florida?
The exact salary you need to buy a home in Florida depends on the size of the loan and the interest rate offered by your lender. The exact requirements will vary from lender to lender, but as a general rule of thumb, most experts recommend that you don’t spend more than 28% of your income on your mortgage payment.
So, say you purchase a $405,000 home with a $27,450 down payment, leaving you with an outstanding balance of $377,550. If you get a 30-year fixed rate mortgage at 6.5% (the average interest rate in the state), your monthly payment would be $2386. So, according to the 28% rule, you should have a household income of at least $100,000 to afford the mortgage safely.
What Kind of Homes Can I Buy in Florida?
Condos are a popular type of residence in Florida because they offer all the benefits of homeownership without the maintenance concerns of a detached home, making them ideal for retirees and vacationers. Condominium complexes frequently offer shared amenities, such as pools, fitness centers, and lounges. However, you’ll also have to contend with the homeowner’s association and pay ongoing maintenance fees.
Cooperative apartments, aka co-ops, are a specific type of property that offers shared ownership over the building. Rather than owning an individual unit, residents buy shares in the entity that owns and manages the building and get to live in one of the units as a benefit. Co-ops are more common in Manhattan than in Florida, but specific areas like Palm Beach have plenty of co-op apartments available. Co-ops offer certain benefits, such as lower prices and greater control over the building. But residents must obtain board approval to purchase a unit, which can often be a rigorous process.
A townhouse is another popular type of housing that can be found in many parts of Florida. A townhouse is a multi-story building that shares one or two walls with the adjoining building but has a separate entrance. They’re typically found within a community of other townhouses and shared amenities. Townhouses usually offer more space than a condo but less upkeep than a detached home, making them great for young families and retirees.
Fully Detached Home
Fully detached homes are also available all over Florida. Whether you’re looking for a primary residence, vacation home, or investment property, you’ll find plenty of inventory available. Fully detached homes offer privacy, square footage, and yards for kids and pets to play in. But they also tend to be a bit more expensive and require more upkeep than a condo or townhouse.
A loft is a specific type of apartment with distinct features such as high ceilings, exposed brick, open-concept floor plans, and large windows. They’re typically found in former industrial buildings converted into residences and are more common in urban areas such as Miami, Orlando, or Tampa.
Renting vs. Buying in Florida
About two-thirds of Florida residents own their own homes. Florida tends to attract retirees, vacationers, and those who want to settle down and raise a family, which is why more people buy a home. Plus, the property values are often more affordable than in other states, so for those who can afford it, buying often makes more sense than renting.
But, in cities like Miami and Orlando or college towns like Tallahassee and Gainesville, there’s still a large population of renters. Beach towns that attract a younger crowd tend to see the highest percentage of tenants, so there is still ample opportunity to rent if you’re not ready for homeownership.
Florida Housing Market FAQ
Should I Get Pre-Approved?
Yes, it always helps to get pre-approved before looking for a home. If you just want to see what’s out there and aren’t serious about making an offer quite yet, you can put it off. But once you’re ready to look seriously, you should get pre-approved. Most sellers won’t take your offer seriously until you get a commitment from a lender (unless you plan on paying cash).
Will I Get into a Bidding War?
Most likely not, but it all depends on where you look and what type of property you want. Like most areas across the US, the Florida housing market has started to soften in 2022, which means that you likely won’t experience the same kind of competition as you may have at the height of the pandemic. But in specific markets, you may experience stiff competition, especially if the property you’re after has exclusive features or amenities.
How Long Before I Can Move In?
It all depends on what you negotiate with the seller. In some instances, you may be able to move in the day the contracts are signed, while in other cases, you may have to wait several days or even weeks for the seller to vacate. If this is a concern, you should address it before the closing. In most cases, you can close on a home 30-45 days from when you submit an offer.
What Can I Expect at a Closing?
The closing in Florida will be similar to what you’d experience in other parts of the country. A day or so beforehand, you’ll do a final walkthrough to ensure everything looks good and you have no additional comments or requests. Then, on the closing day, you’ll meet with your broker and attorney to fill out the paperwork and pay the balance needed to finalize the deal (also known as cash to close). If everything goes smoothly, the attorney will transfer the title over to you, and you’ll soon be given the keys to your new home.