FLORIDA REAL ESTATE 

FLORIDA REAL ESTATE 

Investir.US regularly reviews real estate news in Florida and provides an update on trends and prospects, following an analysis that ranges from the macroeconomic situation to the real estate market in this American state, and more specifically on the west coast, in the Port-Charlotte region.

Florida Economic Trends at a Glance

Economic experts and professionals who follow Florida real estate news say the tourism, housing, and labor sectors are seeing measures put in place to quickly rebound from the health crisis. The conditions necessary for a return to thriving activity are: curbing the number of hospitalizations due to Covid-19, alleviating the labor shortage, and strengthening the inventory of new housing.

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During a presentation at Florida's Economic Estimating Conference (REC), the focus was on Florida's economy in the second quarter of 2021, which experts predicted would surpass pre-pandemic levels, due to much faster-than-expected improvements in the state's economic activity. As a result, Florida is expected to end the fiscal year on June 30, 2021, with a growth rate of 1.9%, 0.3 percentage points higher than the national rate of 1.6%.

Concerns about the number of hospitalizations are linked to the number of new cases recorded by the Florida Department of Health. Indeed, during the week of July 9-15 alone, only 47.8% of Florida residents were fully vaccinated.

In terms of tourism and hospitality, Florida businesses generated $90 billion in revenue, thanks in part to the early reopening last June. An additional boost is expected when Canadians return this fall. During the first quarter of 2021, American visitors accounted for 98% of trips to Florida, compared to 89% in 2019. In addition, they stayed longer: an average of 6.2 days longer than in previous years. This is due to restrictions in other states and the rise of remote working. Florida's attractiveness has naturally contributed to an influx of visitors and new tenants.

Finally, on the real estate front, the construction of new single-family homes increased by 30% in fiscal year 2021. A 6% increase is expected in 2022. These figures have reached the highest levels recorded since the 1990s.

In Florida, the median home price was $321,400, exceeding the national median price ($318,000). Home prices are expected to continue rising as new subdivisions are built; ultimately, prices will increase by 2.5 percent over the next two years.

Among the factors that explain the increase in costs:

– The shortage of existing housing

– The labor shortage

It's important to note that in Florida, construction begins two to six months after the building permit is approved. Labor shortages, however, tend to extend construction times to up to 12 months after the permit is issued.

Why will Florida continue to grow after the pandemic?

Over the past decade, Florida's population has grown by 14.6%. That's 2.7 million additional arrivals, twice the rate of overall U.S. population growth. The pandemic has accelerated this growth. Many companies are choosing to relocate to the state, including Elliott Management, which moved its headquarters to West Palm Beach, and Carl Icahn, Tom Brady, and Peter Thiel, who all have properties in Florida. Goldman Sachs, meanwhile, is considering establishing its asset management division in Florida, while the Subway franchise chain is moving business units to Miami.

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This American state is indeed known for not having a personal income tax and for the unbridled growth of its banking and financial sectors.

The rise of remote work, the taste for freedom, and attractive home prices in Florida are also among the factors attracting Americans and foreigners to the state.

Furthermore, newcomers to Florida aren't just retirees! They're also tech workers moving from San Francisco and New York in search of a better quality of life and affordable prices.

Focus on the Florida real estate market

When comparing housing costs directly to the cost of living, Florida is significantly less expensive to live in than many other parts of the United States. Home prices have increased by about 10% over the past year, as more and more people choose to relocate to Florida. Nevertheless, Florida still has a particularly attractive real estate market compared to other U.S. states. Affordable housing options are currently available in almost every part of Florida.

To buy a home in Florida, you'll need to budget around $277,429. In Palm Beach County, this amount is $320,3094 and $407,245 in Miami (source: Zillow). By comparison, in New York City, the average price of a home almost doubles, from $323,094 to $649,490. 

While real estate prices are more attractive in Florida, that's not the only reason many Americans and foreigners choose to settle there. The cost of living is particularly attractive. For example, in Orlando, the cost of living is 6% lower than the national average.

As newcomers, both American and foreign, flock to Florida, this movement has a direct impact on the availability of real estate in the area.

In Palm Beach, for example, sales of single-family homes priced around $1 million increased by more than 140% year over year, according to Sotherby's International Realty's 2021 Luxury Outlook report . For their part, real estate professionals in the City of Palm Beach acknowledge that the inventory of properties for sale is lower than it has been for several decades.

Is it worth investing in Southwest Florida real estate in 2021?

In Southwest Florida, the median sale price of single-family homes saw double-digit increases in some locations, including Cape Coral, Fort Myers, and Naples.

In reality, Southwest Florida's economic activity and real estate market are growing at a similar pace to the rest of the state. The population and employment rate are increasing; cities are welcoming businesses; and real estate demand is outstripping supply. This is exactly the image rental property investors want to see.

The appeal of Southwest Florida is undeniable. Located along the state's west coast, this area borders the Gulf of Mexico, punctuated by Tampa Bay to the north and the Everglades to the east. In both summer and winter, activities abound thanks to the beautiful white sand beaches, tropical landscapes, and winter sports resorts that Southwest Florida offers.

According to the Southwest Florida Economic Development Alliance (SWFLEDA), five Florida counties are experiencing particularly strong growth: Lee, Collier, Charlotte, Glades, and Hendry. The largest cities in Southwest Florida are Fort Myers, Cape Coral, Naples, East Naples, and Port Charlotte.

Factors that contribute to the attractiveness of the Florida real estate market include:

Population growth

Florida is one of the fastest-growing states in the U.S. Even in smaller counties like Glades and Henry, growth has been on the rise for the past 10 years.

The job market is growing

National records are being set for Cape Coral, Lehigh Acres, and Fort Myers (Southwest Florida). The region welcomes businesses and offers an attractive and affordable quality of life. At the top of Southwest Florida's government, community, and business hierarchy, they are working together to create a vibrant economy focused on creating decent-paying jobs.

A strong real estate market

Fort Myers, Cape Coral, and Lehigh Acres in Lee County are among the largest cities in Southwest Florida with booming real estate markets. Single-family home sales increased nearly 27% across the state, while median sales prices rose 15.6%.

The housing shortage is one of the reasons why demand for real estate in Southwest Florida is so high. Media reports, including the Naples Daily News, are echoing the cautious approach taken by builders and developers in Southwest Florida. They have put many new housing projects on hold. As a result, demand for already-built single-family homes has increased sharply across the three-county Florida region.

An attractive rental market

The thriving real estate market is helping to drive demand for rental properties in Southwest Florida. This is fueled by a variety of factors, including the college towns of Cape Coral and Lehigh Acres, which continue to attract students looking for affordable housing; the attraction of white-collar workers to the area, who want to be closer to their aging parents; and the enthusiasm of the younger generation, who want to take advantage of job opportunities in Southwest Florida.

A historic shift in real estate prices and housing affordability

When it comes to anticipating rental demand in a given market, real estate investors look at price trends and changes, as well as housing affordability in the area. Thanks to information from Freddie Mae and the National Association of Realtors (NAR ) Housing Affordability Report, there have been historic increases in real estate prices in Southwest Florida.

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An incomparable quality of life

Many American media outlets praise the quality of life in Florida, particularly in the southwest part of the state. For example, Fort Myers is ranked as the second best place to retire and the 58th best place to live in the United States. The city has retained its charm, human scale, and historical heritage. Just a few miles away, Cape Coral and Sanibel Island are dream spots for boaters and fishing enthusiasts.

Port Charlotte Rises to Top of Florida's High-Growth Markets

Among the places to consider as a real estate investor: Port Charlotte. Located on Florida's west coast, Port Charlotte is a favorite with locals and visitors alike.

The median price of real estate in Port Charlotte is $215,990. Over the past year, the number of properties listed has increased by 10.2%. Additionally, the median number of days from listing to sale has dropped to just 23 days. Port Charlotte

boasts good public schools and a low crime rate. It's a popular destination for both employed and retired people.

Despite initial concerns about the impact of the Covid-19 recession on Florida's housing markets, the reality is that most parts of the state are experiencing continued growth in population, home values, and home sales prices. There's every reason to believe that the health crisis has, in fact, only accelerated this trend, as measured by daily indicators and reflected in current Florida real estate news.