The investment property market is always changing, and with the COVID-19 outbreak, the real estate market has drastically changed over a short period of time in Florida, US. But the positive thing is that the real estate market is being started to be stable.
Florida has one of the hottest real estate markets in the country. Florida, The Sunshine State is an international tourist point with world-class theme parks. Having a dynamic and diverse economy, headquarters of global businesses, and a business-friendly government are the reasons for making the best real estate market. To successfully navigate real estate investing in recent times, it’s important to identify current investment property market insights in Florida in order to take advantage of them.
Below, we compiled seven useful investment property market insights in Florida to help you make smart investment decisions this year.
#1 Population Growth
Florida’s population is expected to grow exponentially. Between April 1, 2018 and April 1, 2024, the state expects to see around 950 new residents per day, according to WUSF. A report by the Demographic Estimating Conference shows that there will be approximately 22.1 million people living in Florida by 2022. Here are a couple more key population statistics to keep in mind:
Key Population Stats of Florida:
- Florida is the third-largest state by population in the U.S. with roughly 21.9 million residents in 2021.
- In 2019, around 601,611 people moved to the Sunshine State.
- The Florida Chamber of Commerce reports that the state’s population could reach 26 million by 2030 — that’s roughly around Australia’s population as of 2021.
- The three most populated cities in Florida are Jacksonville, Miami, and Tampa.
- According to the U.S. Census Bureau, Florida gained around 241,256 residents between July 2019 and July 2020.
- Data from Orbitan Insight shows that Tampa in Hillsborough County was the No.1 destination that Americans relocated to during the COVID-19 pandemic.
#2 Job Market
Florida is an ideal business location. Its business-friendly environment attracts workers from across the globe, raising the demand for long-term rentals. There are some important employment statistics to keep in mind when investing in real estate in Florida.
Key Employment Stats of Florida:
- Florida’s Gross Domestic Product (GDP) reached more than $1.1 trillion in 2020, a growth of approximately 52% over ten years.
- The state’s unemployment rate was at 6.1% as of December 2020. In comparison, the nationwide unemployment rate was at 6.7%. However, industries in Florida such as construction, manufacturing, and transportation are seeing rapid signs of growth.
- Florida is home to 30 Fortune 500 companies including Citrix Systems in Fort Lauderdale and Office Depot in Boca Raton.
#3 Residential Rental Market
The market for affordable housing will continue to grow in the following years as more employees seek places where they can both work and live. Currently, the average rent in Florida is $1.35 per square foot. Data from Zillow shows that the average rent for Florida homes is $1,790 — slightly higher than the U.S. national average of $1,650. The breakdown of the average rent (as of December 2020) can be seen below:
- Studio units: $1,575
- One-bedroom homes: $1,399
- Two-bedroom homes: $1,630
- Three-bedroom homes: $1,800
- Four-bedroom homes: $2,000
Keep in mind that rental rates are not the same across all markets. Consider consulting a professional property manager or real estate agent to learn about the most up-to-date figures in your area.
#4 Commercial Rental Market
Commercial property investors are in for a major shift. More than a year into the coronavirus pandemic, the office sector still hasn’t recovered. With employees and businesses migrating to secondary markets where the cost of living is lower and quality of life is better, office spaces in metro areas are hit the hardest. Until pre-COVID working patterns are restored, the market for commercial real estate is uncertain.
Many companies are seeing the benefits of remote work, which means that large office spaces aren’t as needed. Some firms will source talent on a global scale, erasing the need for every employee to have a designated desk at the office. In addition, commercial property owners will have to adapt to the latest property management technologies such as near-field communication (NFC) sensors, contactless access control, and more. For instance, property owners may consider installing voice-command technology.
One thing to keep in mind is that many companies may use subletting as a way to cut costs. As the property owner, you will ultimately have to decide whether or not to embrace the sublet market.
#5 Demand for Suburban Life
The recession caused by the global pandemic significantly affected the urban submarkets in 2020. The demand for more economical single-family rentals has boomed. With 42% of American employees working remotely, lifestyles are now centered on safety, closeness to amenities, and access to the great outdoors. An increasing number of employees are opting for less-dense submarkets, which means that more residents will be migrating away from populated cities.
Real estate investors should monitor this suburbian shift in 2021. As the economy recovers and as states reopen, the market will soon see that this is merely a temporary trend. Post-COVID, residents will return to more urbanized locations for the amenities that once attracted them to the city.
#6 Demand for Multifamily Residences
Apartment construction may be down due to shutdowns caused by the pandemic, but the demand for multifamily residences is at an all-time high. More families are seeking residences that allow them to live close to one another after a year of being separated. Unemployment and income loss have also driven many homeowners to sell their properties and live in a rental units instead.
Property investors should invest in multi-family properties located in smaller cities and suburbs, such as apartment complexes, duplexes, townhouses, and condominiums. Renters in urban areas have already relocated to less populated areas.
#7 Opportunities in Depressed Markets
While many property owners in suburban markets are seeing a boom in the demand for rentals, those in high-density areas aren’t so lucky. The mass migration of residents from populated cities to more affordable rentals in the suburbs has left thousands of landlords at a major financial loss.
Eventually, these landlords will be forced to sell their investment properties to leave the depressed market before it’s too late. Property investors who have the capital may be able to acquire these investments at a low price. They will, however, need to ride out the global crisis before they can see proper returns.
Talk to the Professionals
Ready to invest in real estate in Florida? Investing in real estate can be tricky if you do not have the proper resources and industry insights. I hope that this article helps you understand investment property market insights in Florida. If you still need help, you can talk with our property manager. The property managers at Luxury Property Care are equipped with the latest data on the local real estate market. Talk to our agents today by dialing (561) 944 – 2992 or by leaving us a message through our contact form. We would be delighted to help you invest wisely.