Florida’s housing market is on metaphorical fire! Florida’s home construction industry is busy building new homes to support a robust economy and growing population. While it is also rebuilding homes from hurricane damage, Florida is still lacking in supply of homes for its new and current residents.
What is the Florida Real Estate Market Been Since 2008
No matter how you look at it, the 2008 housing market crash affected people around the country. Florida being no different. The value of homes dropped dramatically but has since bounced back. Coastal living is hot and other areas in Florida are recovering from Hurricane Harvey and Irma, but the focus is much different for housing developers. Florida real estate developers are going after the millennial market of prospective homebuyers. Building homes and condos that fit the desires of the millennial customer base.
The Top Florida Cities for Home Real Estate in 2018:
- Jacksonville is on the top of the list because of its growing job market and affordable housing.
- Fort Meyers is next on the list for the same reasons. It has a growing economy and home prices are still affordable for living near the water.
- Daytona Beach is known for its warm weather all year long giving new Florida transplant residents a good reason to move there, and the supply of homes for new residents is on par with those looking to leave its sunny skies.
The Rise of Real Estate Markets in Florida
Florida has been experiencing high job growth and with lots of interest from people wanting to move to Florida from other areas, it creates a higher demand for real estate in the state, most notably Jacksonville. More people are looking to move to Florida than those who plan to leave.
After Hurricane Harvey and Irma many homes needed to be torn down and rebuilt while others just needed repairs. Luckily for some, they had an insurance for their house. These Florida residents found themselves displaced and with the growing population makes the cost of living to rise. The rising cost of living in Florida however is on par with job growth and low unemployment rates. One without the other is disastrous, but having all the above is the result of a strong economy.
Markets to Experience a Lull in Early 2018
Housing markets were expected to slow but not decrease during first quarter of 2018. One probable reason for a slowdown in the housing market is taxes. The new tax law that was recently passed through congress before anyone had a chance to read it, causing many people to take a pause on their major purchases and donations. It took time to read through the 500-page tax document and understand the new law and what kind of affects it would have on the economy. The new tax law affects homeowners ability to deduct the interest on their mortgages as well as other home related expenses on their federal income tax return, this makes owning a home slightly less desirable to some of the prospective home buyers. However, if you do buy a home, there are ways to increase its value. One common way is to add a home warranty that protects your important house system like plumbing and major appliances. Another common way is to renovate your kitchen, living room, bathroom or any other important space in your home.
To 2019 and Beyond
With the population of Florida still continuing to grow, most notably in coastal cities like Miami the housing market will still have a higher demand that supply. According to the Orlando Business Journal the Florida economy is on pace to have higher growth than that of the entire United States through 2019. The country’s expected growth is expected to be 2.3% and the Florida economy alone is expected to grow 2.9%. Florida is predicted to be above the national growth by .7% all the way until 2020. Unemployment in Florida is at 4.1% this is a fair market for employees more so than employers. The rate of unemployment is down fro 2017 4.4% to 4.1% in 2018. It is expected to decrease to 3.5% by 2020 and 3.1% by 2021. The lower the unemployment rate the higher wages employers will pay to keep their employees. This means that more people will be able to afford homes in the coming years.
Will raising the Federal Fund Rate in 2018 Slow the Florida Housing Market?
The concept behind the Fed raising the rates is that the economy is doing well and is more stable and the low levels of unemployment after the recession are behind us. With Americans back to work raising the Federal Fund Rate is to be expected. This coupled with employers paying higher wages to retain their employees with low unemployment rates should remain stable as prospective homebuyers have higher earnings to still opt into buying their next home. Florida’s job growth is top in the nation along the coast and with the rebuilding of homes from hurricanes the construction industry is building new homes for the population growth and rebuilding homes for those who lost their homes as well. The focus is on building. With over 800 people a day choosing to move to Florida the home real estate market is sure to stay busy for months to come.
Florida forecast isn’t just sunny days. Continued strong economics, job growth, population growth and a low unemployment rate are in store as well.