Flagler-Volusia area real estate agent Kristin Petersen cited high building costs and an influx of buyers from out of state as among the reasons for the steep increase in median sales price.
In her 29 years in the real estate industry, Kristin Petersen has never seen prices climb like they are now. She's heard a lot of people call the current Florida real estate market "crazy." But she thinks that's the wrong word.
"It's multiple industries that are creating this. It's employment, it's the cost to build, it's availability. And of course then you have, on top of that, 1,000 people a day moving to Florida."
— KRISTIN PETERSEN, Adams, Cameron & Co. Realtors
"The market, I think, is just responding to supply and demand," Petersen, a sales manager/broker associate at Adams, Cameron & Co. Realtors, said on Flagler Broadcasting's "Free For All Friday" program on Jan. 28. "So it's actually not crazy. It's normal for what's going on."
A set of factors, she said, have converged to raise prices in Florida, making the state's percentage of households paying over 30% of their income toward housing among the highest in the country.
"Florida's got a real problem there, and it's not going to be fixed in a year. It might not even be fixed in two years," Petersen said. "Because it's multiple industries that are creating this. It's employment, it's the cost to build, it's availability. And of course then you have, on top of that, 1,000 people a day moving to Florida, because we're open for business and we're cheaper."
Single-earner households are having a particularly hard time affording housing, she said.
Statewide, median single-family home sale prices in December 2021 were up 21% over December 2020 prices: $373,990, up from $309,000, according to statistics compiled by Florida Realtors. A total of 30.5% of single-family home sales in December 2021 were paid in cash, an increase of 27.5% over a year ago.
In the Deltona-Daytona Beach-Ormond Beach metropolitan statistical area, including Flagler and Volusia counties, the median single-family home sale price was $321,000 in December 2021, up 25.4% from a year before. For townhomes and condos, the December 2021 median was $312,000, an increase of 24.8% from the year before.
People who've been living and working in places like California, Petersen said, are realizing that they can do the same work remotely from Florida.
"They're calling it the 'great migration' right now, where people are like, 'Well, wait a minute: I can live in sunny Florida ... no state tax,'" she said.
These transplants perceive Florida housing as less costly than the places they're coming from — Colorado, California, New Mexico, the Northeast.
"So they're coming down here and saying, 'This is unbelievable. This is great.' And so that perspective is what is driving our market, too," Petersen said.
In Flagler County, she said, more than half of households pay more that 30% of their gross income toward housing; in the Miami area, it's closer to 65%.
"We need industry. We need jobs. We need we need a lot more infrastructure to support the affordability issue," Petersen said.