Florida Housing Market Forecast to Grow in 2014

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Florida's housing sector is expected to continue growing in 2014, although at a slower pace, due to changing market and economic conditions, according to economists at Florida Realtors' 2014 Real Estate and Economic Summit this week.

"The real estate market is going to grow, and we'll probably see about a 10 percent increase in residential sales," Florida Realtors chief economist John Tuccillo said. "Home values will rise at roughly about five percent a year, which is in line with historical trends."

Home values have increased about 12 percent in the last 18 months, a trend not expected next year.

Economists at the summit agreed 2013 proved to be a good year for the state's housing market, which enjoyed low mortgage rates, high home affordability, strong home price growth, increasing home values and a steadily improving jobs market.

"The median time on the market for a Florida home is down to about a month and a half," Freddie Mac chief economist Dr. Frank Nothaft said. "We're seeing that in every single price point class. Clearly the market has improved substantially...the amount of vacant housing oversupply (nationally) is the least in 10 years."

Mr. Nothaft dismissed fears of another real estate "bubble" fueled by this year's rising home prices, stating the increases are "off a really low price base," while prices remain well below the peak before the mortgage crisis. 

Mortgage rates in the U.S. have shifted in the past months. Today Freddie Mac reported a slight drop to 4.42 percent for a 30-year fixed-rate mortgage.

Next year, rates are forecast to gradually increase as the Federal Reserve discusses tapering back its bond-buying program, analysts say.

"Mortgage rates have gone from dirt cheap to cheap and now I expect them to rise to low - maybe 5 to 5.5 percent toward the end of next year - still very low to where they've been historically," Mr. Nothaft said at the conference.

The biggest challenge for the U.S. and Florida housing markets in 2014 may be restricted access to credit.

"The key to this whole business is going to be financing accessibility," Mr. Tuccillo said. "Finding your buyer financing is absolute gold in this market. Anyone who can help solve that problem is going to help the consumer."