Orlando and some areas in Florida real estate market become the most recommended locations for property business in the US, is that true? For a long time, some cities and areas in the US are considered heavens for the property business. Well, you can simply mention them anyway starting from New York to Los Angeles. Not to forget, there is also Washington DC where the government of the country is centered here.
Okay, no one says that the idea above is wrong. But surprisingly, some other areas in the country also show significant development in terms of the property market. Florida is one of them. How can it be?
Property business and investments must have a goal for sure. And indeed, those goals can be different from one person to another. Someone may buy a house or Real estate to rent for students. If this is the case, buying a property around Harvard must be a good decision. But if an investor wants to facilitate immigrants who work in the US, it sounds better to buy a property in the US.
But aside from those matters, we should agree that property investments must also be based on the market condition of the area itself. If you buy a property for rent, make sure to consider these 3 factors; population growth, employment growth, and affordability. If you can find an area that has them, it means that there your investment should be. And this is why the Florida real estate market is a good choice.
A Brief History of Florida’s Real Estate Market
Just like other places in the US, Florida has a very long history only for the term of the Real estate and property business. In the 1920s, there was a time in Florida’s history that was called the real estate boom.
Along with the end of World War I, people in the state were on welfare. There were also developments in transportation and communication for more productions of trains and ownerships of private cars. As many people were prospering, buying houses and real estates was not a big deal for them. Even in one day in July 1925, Miami News was published with 504 pages only consisting of Real Estate ads.
The phenomenon of the Real Estate Boom mostly happened in South Florida. However, it doesn’t mean that other areas were free from it. Yes, aside from the improvement of people’s welfare, the population also grew very rapidly. And in general, the 1920s was said to be the beginning of the development of the Real estate market in Florida which continues until now.
Of course, when there is a rise, there is also a fall. Florida has been attacked by some natural disasters multiple times and it becomes the main challenge of the property market there. Some hurricanes such as Hurricane Andrew, Debby Tropical Storm, and Hurricane Michael caused major damages in some areas. They also influenced the sale and rental prices in the state.
The good thing is that the local government is aware of the possibilities of similar hurricanes and other disasters to come in the future. In addition, some strategic locations are considered free from such terrible things as Orlando, Leesburg, Sanford, and Lake City. So, for the last 2 decades, disasters are still things to be afraid of by investors but they don’t stop them from getting involved in the real estate market in Florida.
The latest index shows that prices of houses in Florida have risen by more than 156% since October 2000. From 2015 to 2020, the prices also rose by around 66%. Interestingly, the trend seems to still continue currently and in the future.
Population Growth in Florida
You must know well that the performance of the Real estate market also strongly depends on the population growth in a certain area. So, how is the Florida population?
The population explosion in Florida is not a new thing. It was even started in 1930 as it became another reason why people were crazy about buying houses at that time. Meanwhile, based on the recent data, the population in the state has risen since 2010 to more than 2.7 million new people. It makes Florida the most crowded state in the US after California and Texas.
On the percentage, the increase is 14.6% and it is projected that the state will have more than 800 babies born per day a few years later. Interestingly, some surveys also say that 10 places in the US with the fastest population growth are located in the state. Those places include Miami, Fort Lauderdale, West Palm Beach, Tampa, Orlando, and Jacksonville.
As information, there are areas with dense populations that are the most strategic areas in Florida for the real estate market currently. If the projection is valid and there will be more population growth in the future, you can say that Florida is a really ideal state for property and real estate investments as it influences the Florida home prices also.
Current Condition of the Real Estate Market in Florida
Recently, the US News & World published a chart of the best and the worst states in the country for housing and lifestyle. There are many indicators to determine which are the best and which are the worst such as the median price, the average family’s income, mortgage, and many more.
The result stated that Florida is on the rank of 31 in 2022 out of the 50 states mentioned. It means that Florida is one of the states with the least affordable housing. Sure, there are some other states worse than it including Massachusetts, California, and Hawaii on the ranks of 58, 49, and 50 respectively.
But at the same time, being on the rank of 31 is also not too bad. While it indeed describes the housing affordability in general, there are still cities in Florida that are considered friendly enough for people starting to invest in property there. You can say that Orlando is one of them. As has been mentioned in the introduction part, there are 3 factors for investment property in an area, employment growth, population growth, and affordability. It is a good thing since Orlando has them all.
On the other hand, other popular cities in Florida like Miami may not have that affordability thing. But it still has employment and population growth. Sure, those 2 factors still influence the property values in Florida positively.
A more interesting thing about Florida as a place to stay is that many residents prefer renting houses to buying. Well, it is even though the price of the house is quite low in almost all parts of the state. So, it is good news for homeowners and investors since the renting cost can be gradually increased from year to year. Even only in a year from 2019 to 2020, the cost was raised by 6%.
Some surveys have been conducted to know the main reasons why people want to live in Florida. Most of them indeed love the state for its weather and climate. It is warm and comfortable. Besides, people also enjoy the state for the low property tax and insurance plus there is no state income tax based on the regulation of the local government. The health facilities are also claimed to be great. So, it is reasonable if many elderly decide to move to this place during their retirement.
So, based on current statistics, here are what you can find related to the Florida housing market: the average selling price is USD 231,000; the average renting price per month is USD 1,486, and the average household income is USD 42,418.
Florida Real Estate Forecast
Florida is always a good place for investment. It is by seeing high demands of people in property in the state. History has recorded that even post World War I, people’s interest in having houses here is quite high. Until now, their reason is still the same. The state is indeed one of the warmest and the most fascinating places to live in the US.
Furthermore, the state government has regulated some matters to add their wants to stay in Florida. Lower taxes compared with other states just make their living costs lighter. Not to forget, health services are indeed considered better than in other places in the country. Sure, people also imagine that living in Florida is likely having a holiday every day for its beaches and beautiful tropical attractions to see around.
Undeniably, there are still possibilities of natural disasters like hurricanes and storms in the future just as have happened in the past. But one of the good things is that the disasters were not experienced in some areas including Orlando, one of the best cities for the real estate market in Florida.
Another interesting thing when we talk about housing prices in Florida is people’s interest not to buy a property there but to rent. Most immigrants and comers don’t intend to live in the state permanently but only temporarily. They come for work and study while some others choose Florida to spend their retirement more peacefully.
This phenomenon is great for investors and property owners as they can decide to rent their houses and apartments. Moreover, the selling price tends to be low while you can rent it at a high price.
It should be known also that the Florida property market is one of the markets that have not been deeply impacted by the COVID-19 that attacked the world recently. Well, it doesn’t mean that the market was completely immune from the situation. It is just that the condition is better than in some other areas in the US, let’s say New York or California.
That’s why, for the next few years, it is forecasted that Florida is still a great place for property investments. Mainly if you can have it in the best places to invest in real estate in Florida, a bright future may wait for you.
FAQs
- Is the real estate market going down in Florida?
No, it is not. According to some observers, it seems that the real estate market in Florida will not go down soon. It is rising currently and the trend will still be the same for some years later.
- Is it a good time to buy a house in Florida?
Yes, it is. Based on the data, properties in Florida may not be affordable, in general. However, the unaffordability is not for every city in the state. You can still find some cities in which the prices of houses are still cheap enough whether for sale or rent.
Besides, another interesting fact about Florida is, in general, it is only the renting cost that is high. Meanwhile, the selling price tends to be lower compared to other states in the US. It makes Florida a good place for property investments, particularly if you are interested in the home rental business.
- Which is the best place to live in Florida?
Some places are considered the best to live in Florida. In those areas, the average home price in Florida is known to be affordable enough. The most ideal place can be Orlando with the affordability of 7/10 and the job market of 7/10. This city is also safer than others from natural disasters than other places in the state. Other recommendations are Tampa, Jacksonville, Gainesville, and Cape Coral.
- Is it worth investing in Florida property?
Yes, it is. Florida is a state with many beautiful places to visit. If you are interested in the warmth of Tropical beaches, this place is definitely for you. Interestingly, people also come to the state for the same reasons starting from students, and workers, to retired employees who want to spend their time more peacefully.
For so many people who are interested to live in Florida, investing in property here is recommended. Moreover, the selling price of properties here is relatively low while the rental price is quite high. So, it is not exaggerating to say that the Florida real estate market is worth trying.
