2024 South Florida real estate sales predictions

Featuring the perspectives of local brokerage executives:

Anthony Askowitz
Broker/Owner, RE/MAX Advance Realty

Seth Kaufman
Chief Sales Officer, ONE Sotheby’s International Realty

Dana Koch
Realtor Associate, The Corcoran Group Palm Beach

Jay Phillip Parker
Chief Executive Officer of Brokerage, Florida Region, Douglas Elliman

William “Bill” Raveis
Chairman and CEO, William Raveis Real Estate

Sebastian Vallejo
Regional Director, Miami Beach, Brown Harris Stevens Miami

What do you expect for the overall housing market for 2024? Up, down or stable? Why?

Seth Kaufman: South Florida has always been and still remains extremely desirable. We anticipate that people will continue to flock to the region for vacations and permanent relocation. Our market is positioned to maintain stability, primarily because of the surge in interest rates, which haven’t reached these heights in many years. Given the current market, it’s unlikely that sellers will abandon their low-rate mortgages to invest in a significantly more expensive property. It’s possible there will be a noticeable increase in rental activity due to the interest rate dynamics.

Dana Koch: I feel that the overall housing market will be stable in 2024. All of us are dealing with market headwinds (interest rate hikes, insurance premiums increasing, inflation, world issues concerns), but a lack of inventory is the primary reason why the market will stay resilient. There are still buyers who want to buy, but the options are few and far between. Sellers who would potentially consider selling are sitting on the sidelines because they are locked in at such low interest rates that financially it doesn’t make sense for them to sell. This has created gridlock in the marketplace. The bottom line is that a quality product, priced properly, will result in a sale. If properties aren’t priced properly, they will linger on the market. Days on market will continue to rise because of these market challenges. Currently, most of the inventory in Palm Beach is overpriced and uninspiring.

Bill Raveis: Each community has unique characteristics but on the whole, South Florida is experiencing an upward trend in pricing and sales. There is tremendous optimism in the marketplace. Inventory is slowly building, and appreciation remains steady.

Anthony Askowitz: South Florida always amazes us. Despite 2022 hurricane devastation, ever-increasing prices and inventory shortages, our market continues to grow. It offers the perfect environment, lifestyle, income and low taxes.

Sebastian Vallejo: Miami’s overall market has started to stabilize after a two-year frenzy and an uncertain 2023. Institutional money has left the building with the near to 8% interest rates, but, with low inventory still (some people don’t want to sell and lose the low 3% they got a couple of years ago and find themselves buying at higher rates) and ongoing demand from domestic and foreign buyers, there hasn’t been much room for prices to come down. We have a much smaller market than in 2021 or in 2022 but significantly higher than pre-pandemic times, and we expect it to remain stable for most of 2024. Perhaps once rates ease by late 2024, we will see a small boost in the market, but low inventory shall remain the trend.

Jay Phillip Parker: This has been a year of high rates and low inventory. With rates starting to plateau and potentially coming down in 2024, more sellers will be ready to list, so we could finally see a return to healthier resale inventory. In fact, we have already seen inventory ticking up but still well below pre-pandemic levels. But pent-up demand is a wild card for prices. With so many buyers waiting to jump back into the market, we’re likely to see more bidding wars and increased competition next year. This means 2024 could see stability in deal volume but also continued price growth. It’s clear to me that the Florida real estate market is sure to maintain its strength and overall stability.

Do you think any segments of the residential market will see growth in 2024? (new construction, rural, luxury, etc.)

Raveis: All segments of the housing market are experiencing growth. Florida has a good vibe. It has sun, water, culture, low taxes and a great quality of life. Companies are relocating to Florida, while some people come for retirement or to set up their business. There has been dramatic growth in the luxury market segment in recent years. Cash buyers will continue to fuel the high-end marketplace in 2024.

Askowitz: New construction is long-overdue and will return as the always HOT market of the past, filling the void in resale inventory.

Kaufman: New developments, as buyers have the option to extend their deposit timeline and more favorable rates may become available over the next 12-24 months. Luxury homebuyers are also increasingly looking for properties that are completely move-in ready, and South Florida has a Rolodex of luxury developments in the pipeline, many already under construction.

Vallejo: New construction licenses keep dropping, and some new developments have slowed down in their inventory absorption rates. Anything on the water is still considered scarce, and prices should keep slowly rising with the low inventory in all areas. Dry neighborhoods are starting to see more inventory, and prices are gradually adjusting, but the sales volume keeps growing. Single-family homes under $1 million are still in a seller’s market, and all condos are shifting from a seller’s market to a mild buyer’s market, with increased inventory. With some developments scheduled to deliver in 2024, we should expect a further correction in the Miami condo market.

Parker: The luxury market in South Florida remains incredibly active, and we’re likely going to see that continue in 2024 with all of the new luxury condo developments coming to market. In all sectors of the market, luxury is limited by organic scarcity. Many new developments have smaller inventory so while there are many new offerings, the overall availability compared to the strength of demand leaves me confident in the sector.

My eyes are also on the Gulf Coast — in Naples, Tampa, St. Pete and Sarasota, where price growth is only just now picking up momentum. We are growing in all of these markets because our clients want us to be there, because the demand is real. Florida’s center of gravity is starting to shift west, and developers are materially enhancing the offerings in the West Coast markets, making the region that much more of an option for domestic relocation and regional housing transformation (i.e. from large SFH’s to vertical residences).

Koch: As far as growth areas to watch, luxury and new construction go hand in hand. New construction is still the gold standard in Palm Beach, and today’s high-end luxury buyers don’t have bandwidth to take on projects that can take two to three years from planning to completion. As a result, buyers want new construction. In addition, in our area we have an undersupply of new product, therefore renovated/new construction and new residential buildings on the horizon will fare very well.

What growth, if any, do you expect for your company next year? Do you expect your business to thrive, decline or remain stable? Why?

Askowitz: We always expect to grow and thrive, because people will always need homes and our help. The specific needs change, and we roll with the changes. Keeping current is critical.

Raveis: Our strategic plan is to grow by 15% annually. Presently we have 4,500-plus sales associates and over 140 offices from Maine to Florida. We acquire established firms, opening new luxury markets like Hilton Head Island and Bluffton, South Carolina. Elsewhere, we are expanding existing markets. Providing seamless service creates even greater opportunity for our agents to grow their businesses. Winning the Inman Top Brokerage award affirms 50 years as a family business with world-class coaching and mentoring, innovation, technology along with our game-changing agent-first philosophy.

Koch: I remain cautiously optimistic that our business will remain fairly stable. Obviously, there are some major challenges in the real estate market, but, fortunately, we are consistent year in and year out. I’m a realist. The fast-moving environment of the COVID market is over, and, with a lack of product available, there will be far fewer sales. My goal for this year is to match what I did in the past year in production. Even though sales prices are up, it is unreasonable to have an expectation that we would exceed our numbers from the last few years. There is just limited inventory available in and around Palm Beach.

Parker: Douglas Elliman has the industry’s best agents, and we continue to attract talent from coast to coast. As the industry faces pressure from interest rates, inventory, domestic migration out of high tax states to low, in addition to other variables, Douglas Elliman is well positioned to capitalize on its streamlined positioning across our markets, focused financial responsibility and our continued focus on being non-franchised luxury consultants for the sale, development and marketing of real estate. Overall, from 2023, I expect our business to be neutral to thriving, particularly in Florida and Texas.

Kaufman: ONE Sotheby’s International Realty will remain a magnet for top industry talent as we are adaptable and continue to evolve along with the ever-changing industry. Our distinguished brand, incredible agent support and top-notch marketing strategies have led us on a path of remarkable growth.

Vallejo: As buyers and sellers keep adjusting to a stable 7% interest rate, more activity should come to the housing market in Miami. We have endured a complex 2023 with lots of uncertainty coming from non-stop interest hikes, a divided political atmosphere and world wide events that challenge stability and confidence in the future. Yet market elasticity allows for still players to get in motion, as they adapt to a new reality. We should see increases in our market share and sales volume compared to 2023. Additionally, we’ve been rolling out amazing technology that allows agents to run their business on a more efficient and automated way. With new launches planned for 2024 with amazing technology, we should see our agent roster grow in 2024 in all of our markets. We are highly optimistic on 2024.

What will be the biggest challenges for agents in 2024? How can they overcome these challenges?

Kaufman: The class-action commission lawsuits against NAR and certain brokerages is going to change the way business is done, and those agents who are fully prepared, knowledgeable and supported by a first-class organization will not only overcome these changes but thrive.

Vallejo: AI, period. AI poses the biggest challenge for late or non adopters and a huge opportunity for early implementers. Since the rollout of ChatGPT by the end of 2022, we have seen thousands of platforms develop new technologies that aid businesses in the accuracy of their communication. We are starting to see these implementations help consumers adjust their searches and automated systems nurture clients until they are ready to pull the trigger. I’d say get started now, even if just with ChatGPT, Bard or any equivalent, to get acquainted and feel comfortable to move to the next level. Those who adopt these technologies and incorporate them to their business shall distance themselves from the ones who don[‘t and will be ready to compete with automated search platforms while using them to their advantage.

Parker: Agents are always forced to look beyond current trends, marketing strategies and possible threats to the market strength. While inventory and interest rates seem to have been the biggest challenges, as we enter an election year, in a volatile economy, agents will be forced to defend market stability, pricing and overall product options. Elliman’s unique connectivity to our clients across the country and globally through our Knight Frank partnership will likely be a strong factor in continuing to advance our agents’ competitive strength.

Koch: It will be challenging putting deals together for so many reasons. A few challenges include: interest rates at their highest levels in over two decades, a lack of inventory, unrealistic expectations for buyers and sellers, and, because 2024 is a presidential election year, it will be a common excuse for buyers who choose not to buy. Some of these challenges we do not have any control over, but there are a couple that we can stay proactive about: low inventory and unrealistic buyers and sellers. We make it a point to turn over every stone to try to uncover a potential property for sale through our agent/broker relationships and via our personal contacts/network, which has been cultivated over the last few decades. Since we are “down in the weeds” on a daily basis, we have a “real time” perspective on what is going on in the market. As a result, we continue to educate both our buyers and sellers so that they can make informed decisions. That’s why it is so important to hire an experienced, highly skilled agent.

Raveis: Inventory remains light. The slowdown will force agents to be proactive with social media, direct mail marketing and all the basics for building their business. No sales professional should sit on their hands, waiting for the turnaround. Which is why we are doubling down on coaching and mentoring, offering free services, automated drip campaigns, email outreach programs, listing contests, custom branding support and marketing staff to help them achieve success.

Askowitz: The NAR lawsuit is on everyone’s mind. Our agents are encouraged to focus on listings. No matter the result of the suit, they will be okay.

What do you think needs to happen for the market to improve?

Raveis: Interest rates need to come down before people regain confidence in the U.S. housing market. Traditionally lower mortgage rates create opportunity for entry and mid-level buyers. At the same time, homeowners are selling, which creates new listing inventory. I believe 2024 will look better than 2023, and we are optimistic for 2025.

Parker: We need more inventory to fulfill demand. Continued price stability or even increased pricing will further support the reality of the transformation of the Florida market, which brings those looking for a lull or break in the materially increased valuations to the market.

Askowitz: The economy needs to stabilize. One-third of buyers are cash. Between the 8.5% increase in median sales price and doubing the interest rates, buyers and sellers are both on hold.

Vallejo: Our market reacts to certainty and confidence in the future. Once the Fed eases on interest rates, with a strong employed economy, we should have more confident buyers and see sellers willing to let go of their properties to seek other ones at appealing rates. We’ll also see a market hike once the political map gets clearer, and we can see where the country is headed in terms of expected economic growth.

Koch: The main thing that needs to happen is that interest rates need to come down. When that happens, more buyers will come back into the market and inventory will start to loosen up. Also, sellers who were on the fence about selling would contemplate putting their properties on the market, especially if there is upward pressure on pricing, which might happen if rates end up at lower levels. The rate cuts will help create a more normalized market, which will increase the number of transactions.

Kaufman: There is a sense of uncertainty in the real estate industry right now given the historically high interest rates, fluctuations in the stock market and instability around the globe. We are fortunate for continued demand and stability in our market compared to others across the country. The road to a more secure real estate environment hinges on more palatable interest rates, achieving stability in the markets and a clear trajectory toward resolving the ongoing conflicts around the world.

Can South Florida sustain the strong housing value gains it has seen in recent years, or is a slowdown on the horizon?

Parker: South Florida is the strongest housing market in the country, and Florida’s economy continues to attract more people, companies and capital every day. Prices will sustain because demand is stronger than anywhere else in the U.S., and it seems that there is nothing standing in the way of our continued powerful trajectory.

Koch: Absolutely! We are seeing records broken on a consistent basis for in-demand, quality properties, especially waterfront. I feel the kind of pricing that we are seeing today is the new normal and sales are at a new floor. The migration of tax and political refugees from New York, New Jersey, Connecticut, Massachusetts, Illinois and California will continue to help drive the market and keep property values high. Also, Palm Beach only has 2,200-plus single-family houses, which translates to a limited amount of supply. People are moving here for quality of life reasons. There is only so much of paradise!

Kaufman: South Florida is one of the few places that can sustain the impressive value gains it has achieved. Not only do we lead in population migration, but we also remain an attractive hub for technology and financial companies. The climate, arts and entertainment, sporting teams and year-round outdoor events will continue to be very attractive to buyers. I see values increasing for years to come, though not at such a dramatic rate as we saw during the height of the market.

Askowitz: We don’t see another 2008 coming, but increases in value will likely slow down to a more normal rate of 2-3% eventually. Demand will always be strong.

Raveis: We will see a steady increase due to strong demand. Whenever inventory is light, value goes up. As soon as inventory starts building and is equal to demand, the housing level will moderate, but we don’t see that happening for some time.

Vallejo: The residential real estate market strength in South Florida is in direct correlation with the strong demand for housing. Take Miami, for instance, where the unemployment rate is at 1.5%, less than half the average national rate of 3.9% by Q3 2023. With a constant demand for housing both in the luxury and overall market, prices should sustain the recent appreciation and might continue to grow, yet at a more controlled pace. All South Florida remains an appealing destination for out-of-state and foreign buyers, keeping a trend for lower inventory and increasing prices, especially on properties on the water and larger lot areas.