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Rising Inventory: Is Florida's Housing Market Going to Crash?

florida homes for sale housing bubble inventory real estate crash May 13, 2024

I'm sharing another perspective from my brand new MarketPulse 360 this week.

It's a really important idea, too. 

I'll start with a confession: I watch the videos on YouTube that say the housing market is going to crash. 🫣

It's cringeworthy.

But, I do it to make sure I'm considering what could go wrong in the housing market and maintaining as balanced a point of view as possible.

Also, it's worth noting that getting a doctorate doesn't necessarily make you a business "expert." Instead, it's formal training on conducting proper academic research. πŸ§‘‍πŸ”¬

This means I can sniff out flawed arguments or biased analysis (of which these videos are full of).

Let's talk about one main argument that get's brought up to prove we're going to have a real estate crash: rising levels of inventory throughout Florida. 🏘️


Is the market flooded with inventory?

Many of the doom and gloom videos center around the rising number of homes for sale throughout Florida.

They're correct to focus on inventory levels.

Prior to the crash in '08, we saw a huge number of homes for sale and it drove prices down significantly. πŸ“‰

The YouTubers get manipulative in the way they select the timeframe for their analysis.

Here's what these videos are referring to:

They generally see at how inventory has changed since 2022.

You can look at it a couple ways. πŸ”€

First, you can start with the raw number of homes for sale (not pictured). 

Florida has gone from 46k houses for sale in March of 2022 to 150k. That's an increase of ~100k houses for sale or +226%. 😳

Those are shocking numbers that get views on Youtube.

Second, you can use Months of Supply to see how the market has changed.

For reference, Months of Supply is calculated by taking the number of homes for sale and dividing it by that month's number of closings.

βœ… Here's an example: 4,000 homes for sale and 1,000 sales gives you a Months of Supply of 4.

Said otherwise, Months of Supply is how long it would take you to sell out of homes at the current pace of sales.

In the chart above you can see we've gone from 1.1 Months of Supply all the way up to 4.8.

That's a 380% increase! 🀯

Here's what they never show in the videos though: 

The picture totally changes when you zoom out and view the whole thing. 

They don't talk about how we're even with levels in 2019 (pre-pandemic).

Also, they don't tell you that in Florida we had 380k houses for sale and 20 Months of Supply in 2008.

Once we see the full picture, it's totally different than how it's being represented. πŸ–ΌοΈ


Finding Opportunity

Our goal should be to provide accurate, balanced guidance to our clients. 🎯

We're not trying to earn a living from YouTube ads by spreading extreme opinions to maximize views.

We're helping people make informed decisions about a huge investment in their life. 🧠

To do that means we must know the numbers of the market so we can tell the full story.

Here's my take: yes, inventory is rising. But, we've been begging for more options for our buyers ever since we essentially sold out of homes during the pandemic. 

The market is normalizing after that shock and the question is if inventory level out or keep rising. πŸ€”

We can speculate on what we think will happen in the future, but nobody truly knows.

This market still offers plenty of opportunity, though.

Price a home correctly and it will sell. Overprice it and it will sit. 

None of the stay-at-home analysts are going to talk about how days on market has been declining, % of list price received has been rising, and median home prices in Florida just hit an all-time high. 😳

Next time you or a client sees a claim that the market is going to crash, remember that we need to make sure we're looking at the full picture.

It's usually not as good or bad as you think. 

Have an amazing week! πŸš€

Dr. Alex Stewart


Also, are you a real estate agent and looking to grow your business using information like this? 

Here's 3 ways to dive deeper:

  1. 🎯 Market Insiders Coaching Membership: Join an exclusive group of Realtors focused on becoming experts in our local Jacksonville market. This membership gives you access to monthly live coaching from yours truly, a member-only community for private updates and discussions, and additional resources to address clients questions and supercharge your business.

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  3. πŸ“Š Schedule a live presentation: Want to learn in person? I offer the MarketPulse 360 presentation that connects all the dots (national to local) so you get a comprehensive breakdown of today's market. It's 2 hours of beautiful charts designed to give you all the major trends you need to know about and address the most common questions in the market. You'll walk out feeling more confident, with resources to use in your business, and a level above the rest of the Realtors who are wandering around blindly.

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