Is Florida real estate a good investment?
It turns out that everyone really does want to live in Florida. With a burgeoning population that includes immigrants and new residents from other states, there’s a high demand for housing. Builders, buyers and sellers are working hard to manage it. That’s where the potential for investment comes into play. Demand has led to impressive growth in real estate values, as well as rent prices across the state. If you want to know, ‘Is Florida real estate a good investment?” here are five reasons to be excited.
1. Single-Family Home Values Are Rising
If you want to compare apples to apples, it’s easy to look at Florida’s growth compared to the nation. According to the National Association of Realtors, the median price for a home nationwide rose almost 14% from November 2020 to November 2021. Florida’s numbers rise well above the average, with nearly 20% growth for single-family homes. With a shortage of new housing statewide, it’s likely that a high rate of growth will continue for 2022.
2. Condos and Townhomes Are Booming
When you want to tap into the pool of affordable housing as a way to grow your investment or improve your rental portfolio, condos and townhomes are a great place to start. The median sale price for a home of this type in Florida in November 2021 was about $275,000, according to Florida Realtors. That’s almost 20% in year-over-year growth. The number of units for sale increased by 5%, but the housing inventory dropped by more than two-thirds, indicating a major flood of demand for this type of housing in the state.
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3. Florida’s Major Cities Are High in Demand
If you’re wondering where to buy real estate in Florida, it would be difficult to make a bad choice. Florida’s population has increased by nearly 15% in the past decade, and the people who relocate here are looking for housing. Florida Realtors reported that so many of the metropolitan statistical areas showed higher-than-average growth from November 2020 to November 2021. If you’re looking to buy single-family homes in major cities, here’s how they have grown:
- Miami: 16%
- Jacksonville: 22%
- Tampa: 24%
- Orlando: 21%
Condos and townhomes showed the smallest growth, with Highlands County leading the pack at 24.4%. Collier County wins the prize for single-family homes, with an impressive 30% growth in 2021.
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4. Housing Inventory Continues to Drop
Housing inventory is dropping in Florida, and there are tons of reasons to explain it. Researchers believe that the pandemic drove Florida residents to buy homes that they could use for work, school and leisure. Of course, it also prompted property owners in cities with a higher cost of living to sell and relocate. As such, the housing inventory plummeted to a mere month or month-and-a-half. It’s a significant drop from last year, according to data from Florida Realtors.
That’s before the international investors get involved, experts say. Travel limits made foreign real estate investment a difficult task in the middle of the pandemic. For 2022, growth may continue as the world stays open and investors realize the amazing potential of buying in Florida.
5. Rent Will Rise or Stay Steady in 2022
In a report from Apartment Guide and Rent.com in October 2021, the average rental price for a one-bedroom apartment went up almost 40% in one year. That average is highly specific to the region, as prices went up more than 55% in Orlando and down 16% in Miami. However, according to the report, experts estimate that rental prices may not rise as much but will remain steady in 2022. For investors who are looking for a property that they can renovate and rent, it may be a great opportunity for long-term income security and growth.
How is the real estate market in Florida? It’s looking amazingly bright. With plenty of growth and a lot of demand on the horizon, the state provides excellent opportunities for the right investors.
At Renovo Financial, we work hard to help our clients get the most from their investment projects. Contact us to see where your Florida investments can take you.
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