Whether you are thinking of investing in real estate in Florida, or if you already own a home in the state, it is important to know the real story behind the state’s real estate market. If you are interested in finding out more, check out these five reasons why Florida real estate is actually on the rise.
Home prices in Florida have increased by more than 156% since April 2002
Throughout the past five years, Florida has experienced unprecedented price rises. According to the S&P CoreLogic Case-Shiller US National Home Price Index, the price of a single-family home in Florida increased by more than 156%. This has led to a record amount of equity, and it’s predicted to continue to rise.
The Florida housing market is one of the hottest in the country. It has been criticized for a possible housing bubble. However, Florida isn’t the only state that’s experiencing significant price rises. Across the country, homes have gone up by 18 percent in the last year.
Historically, Florida’s mild climate and inexpensive taxes have attracted newcomers. However, Florida is also one of the least affordable housing markets in the country. The high prices for construction materials during the pandemic are making it difficult for homebuyers to find affordable homes in the state.
COVID-19 pandemic has led to increases in sales of homes farther away from the office
Several studies have looked at the impact of past pandemics on housing markets. However, assessing the impact of the COVID-19 pandemic on real estate is difficult due to the low number of transactions. This is mainly due to the dominance of private data providers.
The housing market is affected by many factors. For example, lower interest rates lead to increased desire for privately owned homes. This, in turn, increases the desire for homes in peripheral areas. However, the effects are also affected by larger macroeconomic conditions.
The number of Americans engaging in out-of-home activities is increasing. Approximately half of respondents have taken a vacation in the past three months.
More than one in three Americans believe that COVID-19 cases are increasing in their state, and nearly one in three believe the pandemic is over. Almost one in three think that there is a small risk of catching the virus in the next few months. This is in contrast to the earlier stage of the pandemic, when a majority of respondents believed there was no risk of catching the virus.
Tampa Bay has one of the most overpriced housing markets in the nation
Despite the fact that Tampa is one of the most affordable cities in the United States, it also has one of the most overpriced housing markets in the country. This means that homes in the Tampa Bay area are selling for more than 40 percent above their historic value. Companies like Cash Buyers Network, pay high amounts for Tampa homes.
The Florida Atlantic University (FAU) studied the housing market and ranked the most overvalued, most undervalued, and most overheated markets. They identified four regions of Florida as the top overvalued markets in the country.
Eli Beracha, director of FIU’s real estate school, partnered with the Florida Gulf Coast University and the University of Alabama to conduct the study. They used publicly available data to come up with these rankings.
They found that a typical home in the Tampa Bay area sells for $275,000 in May of 2021. While this may not sound like much, it’s a good indication of how much homes in the area are worth.
Republican-led Legislature has redirected $2.5 billion intended for affordable housing
Despite its record low mortgage rates, the Florida real estate market continues to price out homeowners. During the past two months, no substantive affordable housing legislation was passed, and there’s plenty of reason to believe that the state of Florida is not in a state of affordability.
One major reason for the state’s housing affordability crisis is the lack of available land for new construction. The state’s housing trust funds have been raided over the years. It’s estimated that $2.3 billion has been siphoned away over the years. The legislature has failed to fully fund these programs, and lawmakers are working to rectify this oversight.
Another sign that Florida’s housing market is a boom is the number of vacation rentals on the market. During the past year, rental prices in Orlando have increased by 60 percent, while rental prices in Miami-Dade County have increased by over 60 percent.
Rental unaffordability is worse for lower-income Floridians
Almost two out of three Florida renters are spending more than thirty percent of their income on housing costs. A recent study by Apartment List found that Florida leads the nation in rental unaffordability.
Florida’s rents have skyrocketed in the last five years. This astronomical rise is a result of a lack of supply. The market is squeezing families harder and harder. People earning minimum wage and low incomes have been hardest hit. Almost one in five Floridians work in a poverty-wage job.
Despite Florida’s low property taxes and affordable overall housing stock, there are not enough affordable rental homes for low income families. The state’s 911,000 poorest households spend over half of their income on housing.
Florida’s housing affordability crisis is squeezing families harder than ever before. According to the National Low Income Housing Coalition, Florida has only 28 affordable homes for every 100 low income families. The problem is worse for minorities and low-income workers
