What’s new in real estate and what will happen in 2025? The Florida market is now walking after running in 2021 and the years following. Here are a few insights that may be helpful if you are planning on buying, selling or staying put in 2025. Currently we are in a balanced market, leaning towards a buyer’s market. We have seen price stabilization in all four counties (Jacksonville Metro).
REAL ESTATE IN 2025
- Rate risk: Everyone thinks rates will go down, however you’ll want to be open to the idea rates could go up. Recently we have seen a new uptrend starting in rates. In the 1970s, Fed rate cuts did result in lower mortgage rates. Nowadays the market responds to the rumor, and not the actual cut. If someone wants to pull out a crystal ball, we believe rates will continue to stay around the same between a range of 5.8%-6.6% in 2025. Seeing rates in the 6%s is starting to be normal.
- Perceptions about hurricanes. Data shows that markets impacted tend to see subpar performance immediately after a storm then pricing tends to go back to where it was. It is a temporary buying opportunity in ravaged areas, but quickly returns. People living outside of Florida tend to think flooding is an issue but in reality, it may be other factors.
- Builder strengths: New construction home sales are driving 26% of the market. While building permits were down in 2024, we can expect new construction to continue as the builders have locked up land and have not pulled permits yet. One thing is for sure, land in the future will be worth more.
- Moderate growth & no crash in sight. Florida is back to normal growth rates in many places. If you are still waiting for a crash, ask yourself; do you think more money will be printed? Do you think more people will move here?
- Does the president matter? With real estate, prices tend to rise regardless of who or which party is in office. The historical trend for over a century has always been upwards. What matters is how much money is being printed not who is in office.
- Cash moves to Florida. Cash sales in Florida is well over the national average. Currently we have 30% cash sales, compared to the national average of 12-15%. Luxury homes have a large proportion of cash sales with current data showing 45% of $1,000,000 homes sold were cash.
- Months of supply: This is a metric to watch if you want to know if prices will rise. Currently the Jacksonville Metro has 5.6 months of supply. The prices will rise when months of supply goes over 8 months.
- Trends to watch: Incentives are driving sales as rates slow things down. We are seeing the average concession in 32084 to be around $10,212 with an average sale price of $415,000. The island and beach zip code of 32080 has an average price of $766,000 with an average concession of $9,586. Sellers should anticipate these tactics in this current market coming in an offer.
