In 2021, the Florida property market was extraordinarily beneficial for investors, but is it still a solid investment in 2022? Tight inventories in the state are keeping house prices high, according to the most recent Florida Realtors’ statistics.
According to real estate experts, Sunny Isles Florida real estate market is soaring, and for a good reason. Florida is known as “The Sunshine State” for its year-round sunny weather and world-class entertainment parks. Continue reading to determine why Florida real estate demand is expected to rise through 2022.
Growth in Population!
Compared to the previous decade, Florida’s population rose by 15.6 percent. Florida is expected to add 845 new citizens every day during the next five years.
The Labor Force
To keep Florida’s economy booming, the state promotes itself as a prime place for business.
- Between January and September of 2021, job creation in Florida climbed by 5.4%, compared to a nationwide rise of only 0.8%.
- According to Money Geek, two of the finest places to look for a job are Jacksonville and Tampa.
- With an unemployment rate of only 4.6%, Florida’s tourism hotels are booming.
The Housing Market
As of Q3 2021, property prices have risen by double digits in every major metropolitan center in this region. According to a WFLA story from November 2021, house price and sales are growing, availability is decreasing, and the count of purchasers has climbed by nearly half. It’s time to take a look at some of the most critical market data:
- Over the last year, the median price of a house in Florida has increased by 24.9 percent.
- According to the most current data from the Florida Realtors, the price of a single-family home in the Sunshine State has risen 17.7 percent over the last year.
Interest rates also influence the Florida home market. International and domestic purchasers should thoroughly research the interest rates on mortgages. Mortgage rate calculations may be made using a mortgage calculator found online.
A buyer’s ability to purchase a home may be affected if interest rates shift.
Real estate prices and demand will decrease as interest rates rise, which is why it’s essential to know that mortgage rates will increase as well. But when it comes to interest rates on REITs, they may be compared to bond interest rates since they are so similar. Interest rates fall, which raises the value of bonds, whereas interest rates rise, which decreases the value of bonds.
In a nutshell, the supply and demand for real estate are influenced by changes in interest rates. Low-interest rates encourage more purchasers to take advantage of cheaper mortgage rates, which leads to an increase in overall sales. Although this might lead to a rise in pricing, it can also decrease inventory or a lack of supply.
Subsidies/Policies from the Government!
Several variables might temporarily enhance the demand for real estate, including subsidies, deductions, and tax credits. Government policies and annuities might affect a property’s market and price. If you’re constantly up to date on the latest government incentives, you can better anticipate supply and demand fluctuations.
Tax credits for first-time homebuyers were instituted in 2009 by the United States government. A poor economy necessitated this offer to boost property sales. Since roughly 2.3 million homeowners have taken advantage of this effort, the demand for homes has increased significantly. Even though this was just a short-term fix, it did affect property sales in the short term.
Multi-Family Property Is Doing Well…
The residential market is faring better than other alternatives in the face of the epidemic. The real estate market for multifamily homes is predicted to improve. It is projected that vacancies for such properties will increase shortly.
Over the last year, occupancy rates for multifamily properties throughout the country have decreased. Nevertheless, in Florida, the reverse was true. About 96% of units were occupied, and rents rose somewhat in most areas.
The outliers were Orlando and Miami, two cities that rely significantly on foreign tourism. Multifamily housing, on the other hand, has continued to grow.
Moving between multiple buildings is a common occurrence for many occupants of multifamily housing. As a result, instead of entirely leaving the multifamily market, they’re making a move inside it.
Cash Sales are expected to keep rising…
For the foreseeable future, the percentage of all-cash sales will keep rising. The likelihood of receiving a monetary offer is higher than you may expect.
More than 38.5% of single-family houses purchased all at once in 2021 were paid for with cash, compared to 2017. There was a 22.9% rise in condo and condominium unit sales made in full payment. No sign that this will slow down given the restricted availability of dwellings.
What is it about cash sales that make them so appealing? In addition, they’re simpler.
Prior mortgage approval isn’t necessary. There is much less paperwork when there is no mortgage funding. Due to the absence of lending fees, closing expenses are also reduced.
Faster closing times are advantageous for both market participants when dealing with cash. Offering to pay in cash is a terrific method for buyers to stand out in a competitive marketplace.
It’s unlikely that a cash sale would be an option if your credit score is poor. You won’t be able to buy a house because of credit blunders you committed years ago that are haunting you. Many potential homebuyers will be relieved by this news.
The Bottom Line!
There is a growing demand for property in Florida but a lack of availability. If you’re looking to buy a home in Florida, now is a great time to do it. South Brevard County would be worth looking at on Florida’s central coast. It’s a popular destination for tourists, as well as those who have relocated for work. Even if you don’t intend on staying in your home every day, you may rent it out via Airbnb. So, yeah, you should purchase a home in Florida in 2021.
In 2022, the real estate markets like Sunny Isles seem to be on the upswing. There is still a long way to go before the housing market returns to a more balanced state, but the new building of residential dwellings has grown significantly over the last year. Despite a slowdown in price increases and house sales, Florida’s economy will continue to thrive.