A recent housing market forecast selected several Florida cities as being top performers for 2022.
This forecast was issued earlier this month by the research team from Zillow. They predicted that the real estate markets in Tampa, Jacksonville and Orlando would be among the hottest housing scenes in 2022.
It’s a supply-and-demand story, as usual. In these three Florida real estate markets (and many others across the U.S., supply levels continue to fall short of buyer demand. That’s boosting competition and home prices alike.
Bold 2022 Forecast for Florida Housing Markets
This past year was a big one for the U.S. real estate market. Tight inventory conditions and strong demand from home buyers sent prices skyrocketing nationwide.
And in 2022, we could see more of the same. While price growth is expected to slow down over the coming months, many local real estate markets will remain highly competitive in 2022. Tampa and Jacksonville, Florida could top the list.
On January 4, researchers from the real estate data company Zillow issued a report that ranked the hottest markets of 2022. To produce this report, the researchers examined everything from anticipated home-price growth to the speed at which homes are selling. They then created a top-10 list of metro areas that are expected to be hottest real estate markets in 2022.
Tampa and Jacksonville took the top two spots. Orlando showed up at number nine. These three Florida real estate markets are expected to be among the ten hottest in the nation, during 2022.
According to Zillow’s January report:
“The Sun Belt dominates Zillow’s list of hottest housing markets for the second year in a row. Tampa, Jacksonville, Raleigh, San Antonio and Charlotte are expected to lead the U.S.”
Tight Inventory in Jacksonville, Orlando, Tampa
So what’s the reason behind these bold forecasts for Florida housing markets? Well, supply has a lot to do with it. Or rather a lack of supply.
As of January 2022, many real estate markets across the state of Florida are still experiencing a shortage of inventory relative to demand. There simply aren’t enough homes listed for sale to satisfy the demand from buyers.
For example, both Orlando and Tampa had less than a one-month supply of homes for sale as of December. That was well below the national average, and miles below what’s considered to be a balanced real estate market.
Jacksonville had a slightly higher level of supply, but is also well below historical norms.
These tight inventory conditions are forcing home buyers to compete fiercely among one another. This leads to bidding wars, offers above the asking price, and fast home sales.
Fast Home Sales in Florida Real Estate Markets
In all three of these Florida real estate markets — Jacksonville, Orlando and Tampa — a significant percentage of homes are selling above the list price. As of last month, all three metros had around 30% of homes selling for more than the original list price.
This relates back to the inventory situation mentioned above. With tight supply conditions across Florida’s housing markets, buyers are having to outbid one another just to get their offers accepted. The same is true for many major U.S. cities, a trend that could follow us into 2022.
As you might imagine, Florida real estate markets are also experiencing quick home sales. Tampa and Orlando, in particular, have become fast-paced housing markets. In both of those metro areas, homes are currently selling much faster than the national average. Buyers beware.
Population Growth Is Fueling Demand
Population growth is another factor influencing the strong forecast for Florida housing markets. Jacksonville, Orlando and Tampa have all experienced steady population growth over the past 10 years or so. This is especially true for Jacksonville, where the population grew by around 15% from 2010 to 2020.
So we have a situation where more and more home buyers are pouring into these real estate markets, at a time when inventory continues to hover record lows.
You don’t have to be an economist to connect the dots here. There are a lot more buyers in places like Tampa and Jacksonville, when compared to the number of properties for sale. This imbalance puts upward pressure on home prices, while making the local real estate scene highly competitive.
Disclaimer: This article includes housing market forecasts provided by third parties not associated with the publisher. The Home Buying Institute makes no claims about future real estate conditions. Such predictions are the equivalent of an educated opinion and should be treated as such.