Florida real estate has always been popular with national and international buyers. We have analyzed the behavior of Florida's real estate market since the big crash in 2008. So the question is, are the Florida real estate market trends indicating a flow of residential buyers, or are we now looking at a stagnant market?
These three ingredients are responsible for an upward trend for the Florida real estate market in 2017 and 2018, and they will no doubt do the same for 2019. Let’s take a look at each of these factors to understand better how they are driving the Florida real estate market for the better.
The Florida real estate market is affected by the state’s population growth. Florida is the 3rd most populous state after California and Texas. All of these states have rising real estate markets that are driven by the tremendous population growth. With 21.31 million residents, the population needs housing and that in turn, creates real estate market opportunities.
If the population growth of approximately 1.8% continues at the same rate, we’re going to witness the state’s population exceed 22 million. The population growth on its own is a vital indicator of the housing and real estate needs of this real estate market.
Real estate market trends are tremendously affected by each state’s economy. Most notably is Florida’s record-breaking tourism, which has boosted its overall economy. The state’s economy hit the $1 trillion mark in 2018, which is a positive indication of the effect the economy will have on the Florida housing market in 2019.
Digging into Florida’s economic stats, we find that Florida has the 4th largest economy respectively after California, Texas, and New York. Of course, this economic growth has a direct effect on the Florida real estate market and the employment rates, which brings us to our next point.
Once again, Florida is one of the top 10 states for job growth. As Florida’s economy continues to fuel job growth from year to year, the Florida housing market responds at a rapid pace. The above national average job growth is attracting millennials and families from across the country, which automatically increases the population. To compare, Florida’s job growth of 1.3% exceeds the national average of 1.2%.
This exceptional job growth rate is going to continue increasing in 2019 with the possibility of reaching stability in 2020 and 2021.
When looking for a Florida real estate investment, any investor must look at the economies of the housing market. Moreover, real estate investors are zooming in on microeconomies within Florida’s economy to find the most vibrant location to invest in real estate.
Accordingly, while examining Florida’s real estate market in 2016, 2017, and 2018, real estate investors can evaluate the accumulative unemployment rate and overall population to make the best real estate investment decision that they can. Of course, the healthy economic system differs between each local real estate market. Let’s take North Palm Beach for example, which has an unemployment rate of 4.8% or Jacksonville Beach with a low unemployment rate of 4.5%. These cities are offering some of the lowest unemployment rates in the state, and the housing market in Florida will keep reflecting that in 2019.
Meanwhile, real estate investing in Florida continues as the need for housing rises with migration, property construction, and incomes increase.
The 2018 Florida housing market was excellent. The sales numbers for single-family homes increased in addition to the median sales price. Moreover, the housing market is becoming more and more catered to the upper-middle class as the inventory of single-family homes under the price tier of $200,000 is decreasing. This shortage indicates that real estate developers and investors are focusing on luxury properties, which is natural given the growing economy.
The state of Florida has been attractive to international homebuyers for several years. As this continues, Florida is becoming a hub for foreign money as they view real estate investing in South Florida as lucrative and secure just as much as its counterparts in Los Angeles and New York State. Accordingly, the major selling point for this real estate market with foreign investors is its affordability when compared to other internationally-dominant US real estate markets.
Canadian real estate investors are taking a large chunk of international investment in South Florida. The reason for this is mainly due to many Canadian companies opening branches in the Tri-county area in South Florida.
According to data from the National Association of Realtors, foreign investments in residential real estate properties in South Florida is made up of 46% of Latin American and Caribbean real estate investors.
As for the housing market predictions in Florida, foreign investors, and their impact on the market may shift if President Trump imposes taxes on Canadian companies in the United States. Additionally, the fact that foreign investors’ interest in any city is strictly financial as they look at the return on investment of everything is an alarming trend. These foreign investors can just as quickly shift to another state.