Florida has become one of the nation’s hottest real estate markets. The quality of life, projected job growth, and a robust economy boasting substantial GDP gains attracted new residents in more significant numbers than ever.
New and existing home sales prices are rising in Florida while the available inventory cannot keep pace. As a result, Mortgage Bankers Association reported that Florida median home values rose by 24.78% from 2020 to 2021, a rise that exceeded the nation’s median increase by just over 34%.
Cash vs. Mortgage Loans
One indicator of the extremely high current demand for homes in the Tampa region has been the high percentage of homes initially bought with cash instead of mortgage loans. The number of motivated buyers far exceeded the inventory of available homes, resulting in bidding wars. As a result, sellers often preferred buyers paying cash and offering the fewest contingencies and complications.
According to a Florida Realtors 3rd Quarter 2021 Market Summary, the number of cash buyers for single-family homes in Tampa had increased by 45.5% over the prior twelve-month period.
However, many cash buyers chose to take advantage of a low-interest mortgage following the closing.
Real Estate Investment Outlook
The outlook for the 2022 Florida real estate market remains very strong for prospective investors. The economic and population growth expectations are strong, and the supply of new and available homes to buy or rent continues to lag.
While many retirees plan to move to the warmer, more agreeable climate, robust employment numbers are also a substantial draw.
According to the MBA Employment profile for Florida:
- Total Non-Farm employment = 8,801,600
- Private Non-Farm employment = 7,706,600
- Government employment – 1,095,000
- Year-on-Year Employment Increase: 381,630
This growth results in one of the nation’s lowest State Unemployment Rates at 4.97%, compared to a National Average Unemployment Rate of 5.13%.
Florida Mortgage Market Profile
Low mortgage interest rates and robust demand tend to foster more significant activity in the mortgage market. During Q3 2021, refinancing represented a considerable percentage of mortgage applications at 64.5% of the total.
And, separately, Government-backed FHA, VA, and USDA loans represented 22.1% of all applications.
The Mortgage Bankers Association reports that Florida’s current Homeownership Rate exceeds the national average by almost 2%, 67.1% to 65.4%, respectively. This rate is calculated as the ratio of owner-occupied homes to the total housing units. The balance of the homes would be under rental contracts or other agreements.
Owners-occupied households stand at 54%, while renter-occupied units are 28%.
As for mortgage delinquencies, Florida’s performance remains on par with the rest of the country, with a non-seasonally adjusted rate of 3.81% compared to a much worse rate of 6.70% in Q3 2020.
Foreclosure rates in Q3 2021 measured only 0.03% of all outstanding home loans.
Florida Population Expansion
The 2020 Census and subsequent summaries reveal a trending increase in the population of Florida. Here are some eye-opening statistics surrounding the growth of Florida:
- Florida is home to 9 of 10 fastest-growing places in the U.S. in 2021-2022, according to U.S. News & World Report.
- Since 2010, Florida’s population has grown 14.6% and is currently the third-ranked state by population in the U.S.
- Florida expects an average of 845 new residents daily through April 2025, generating a 1.39% annual compound growth rate.
- Florida’s four largest metro areas are:
- Miami-Fort Lauderdale-West Palm Beach: 6.2 million
- Tampa-St. Petersburg-Clearwater: 3.1 million
- Orlando-Kissimmee-Sanford: 2.5 million
- Jacksonville: 1.5 million
Senior retirements and new job creation drive this extraordinary growth, along with foreign investment, indicating increasing demand for residential and commercial real estate and development in the mortgage markets.
Job Creation in Florida
Businesses and government entities continue to aggressively market Florida as an ideal business environment to locate or relocate businesses. Many of the new jobs coming available in Florida are high-income, effectively competing for skilled and educated workers on a global scale.
As proof, here are some current statistics depicting the robust job market in Florida:
- The total GDP in Florida has grown by more than 48% in the past decade.
- During the first nine months of 2021, job growth in Florida reached 5.4%, while the national average grew by 0.8%.
- Florida employment rose by 84,500 total jobs in September 2021.
- Job growth in Florida is not focused on a single area but is occurring everywhere throughout the state.
- Healthcare, software, and information and business services are the fastest growing industries, according to the Florida Department of Economic Opportunity.
- Current major industries in Florida are defense and homeland security, aviation and aerospace, manufacturing, life sciences, and supply chain management.
- Workers in Florida receive Top Ten rankings in innovation, workforce training, and high-tech employment in the U.S.
Florida’s Growth and Demand are Here to Stay
Florida is a prime destination for prospective investors in real estate and infrastructure. In addition, rising real estate and mortgage demand become more apparent as international companies choose Florida as a base of operations.
And, with the incoming flux of aging Baby Boomers and Gen Xers, the population will continue to grow. As a result, Florida’s biggest challenge in coming years will continue to be the supply of homes to meet the pending demand.
Graystone Investment Group
Graystone is an experienced Investment Group in the Greater Tampa Bay market. Our company is designed to help new and seasoned investors.
If you’re ready to dive into the real estate market, contact us. Whether the type of real estate investing you want to do is wholesaling, buy-and-hold, commercial investment, or fix-and-flips, we can help.