Florida often called the Sunshine State, is a popular tourist spot and one of the most desirable states for people to live in. Theme parks, historic landmarks, and the best beaches can all be found in this beautiful state.
If you’re planning to move to Florida permanently or buy a property there for investment purposes, here’s what you should know:
Florida’s real estate boom has left a lot of people unsure about whether they should proceed with their property purchase plans in the state. To make the right decision, it’s best to consult a real estate agent on these matters because they’re experienced and have detailed knowledge of market trends.
This article explains everything you need to know about Florida’s real estate market boom.
Florida’s Housing Market in General
Florida’s real estate market is generally competitive and is expected to stay that way throughout 2022. This is excellent news—unless you’re a buyer. This is because if real estate values are growing and there isn’t much buying competition, you can choose from a range of deals that fit your budget and needs.
Florida buyers, on the other hand, are finding it challenging to find a property because there are fewer ones available and post-pandemic buyer demand is rising. The best offers are swiftly taken off the market, and given that mortgage interest rates have already risen, properties are not on the market in Florida compared to the flourishing market in 2021.
If you’re a buyer, though, don’t let these things keep you from investing.
Florida’s Real Estate Market Growth
Now let’s take a closer look at the start of spring, which is often one of the busiest times for real estate, to see how Florida’s housing market compares to that of other states. In March 2022, national house prices increased 20.9 percent over the previous month. Here are the states that experienced the biggest increases in home prices during the past 12 months:
- Florida (31.4 percent)
- Arizona (28.7 percent)
- Tennessee (26.7 percent)
Do you see how huge that difference is? In March, Florida’s real estate values skyrocketed by 50% over the US as a whole.
Reasons for the Real Estate Boom in Florida
Real estate drives Florida’s economy; therefore, legislators, citizens, and real estate professionals must know what to expect in 2022.
When analyzing Florida’s real estate market in 2022, several factors must be considered. The primary causes of the Florida real estate market boom are outlined below.
Population Growth
Undoubtedly, population growth is what drives Florida’s real estate market. As per the US Census Bureau data published on April 1, 2020, Florida has seen an increase in population of over 2.7 million over the last ten years.
Since the COVID outbreak, millennials have become the most in-demand demographic. Originally thought to always be renters, Gen Y is now becoming homeowners as their careers grow more secure and they start families.
Job Market
Among the other main reasons Florida is anticipated to flourish so quickly in the future is the promotion of the state as the perfect business destination. The pro-business government of Florida is adept at luring in new, well-paying employment for elite people.
Florida’s economy is thriving, as numerous real-world instances and statistics attest.
- The civilian labor force of Florida is estimated to be approximately 10.6 million strong, which is greater than Sweden’s whole population, as reported by the Bureau of Labor Statistics.
- In the last ten years, Florida’s gross domestic product has climbed by more than 48 percent.
- Florida saw a 4 percent rise in employment again from January to September 2021, compared to a national increase of just 0.8 percent.
Expert Predictions for Florida’s Housing Market in 2022
As we previously mentioned, real estate professionals predict that the Florida home market will stay active through 2022. But some experts claim that the only factor that could marginally change the situation is the impact of rising mortgage rates.
An Increasing mortgage rate may limit price increases
Because of rising mortgage rates, ill-prepared property buyers may postpone their purchase plans. This might prevent price hikes if it sufficiently suppresses buyer demand in specific Florida marketplaces. If the price increase slows down, the remaining buyers who can afford higher rates might feel more sure about a property they can buy.
Affordable Housing will grow in popularity
Experts noted that during the first quarter of 2021, wealthy buyers from California and the Northeast moved to Florida in previously unheard-of numbers. Naturally, this raised the price of wealthy homes.
For instance, more property purchases in Miami-Dade than in any other county last year were for $1 million or more, up from one out of every 13 deals a few years earlier. In other words, 2021 was the year of luxury purchases. Nevertheless, according to experts, the market for luxury residences will decline in 2022 and shift to more affordable buildings, such as those in Naples and North Port.
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