Florida has long been regarded as a piece of paradise right here in the Continental United States. Its tropical climate, beautiful beaches, and palm trees make it one of the most popular vacation spots in the country, as well as a place for retirement. Unfortunately, when the Real Estate Bubble burst in 2006, Florida was one of the hardest hit states, with home prices plummeting and foreclosures skyrocketing. Seven years later however, a much more optimistic picture is being painted of “The Sunshine State”.
There are several factors that come into play when regarding the hopeful outlook for Florida’s housing market. One important factor is the general improvement of the state’s economy. Unemployment is down, and consumer confidence is slowly but surely increasing. Tourism is up, due largely to overseas visitors, thus creating more jobs. Florida added an estimated 44,000 members to its labor force in 2012. Aside from the general economy, the sharp fall in median home prices back in 2006 has rebounded, and due to increased demand, property values are once again climbing upward. Some of the most desirable areas, such as Orlando and Naples, report an estimated 1%-2% increase in the prices of new homes.
The increase of “snowbirds”, who are people from the North that come to Florida to escape the cold winters, has also helped to fuel the recovery process. There has been a notable influx of Canadians who are purchasing homes in Florida. Housing is much more affordable in Florida than in Canada, and with 56% of Canadian purchases going for vacation homes, Canada has become Florida’s largest source of foreign tourists.
The number of foreclosures and short sales must also be taken into consideration. While still ranked relatively high with the third largest number of foreclosures in The United States, Florida’s number of homes in foreclosure is actually decreasing over time, as investors from all over are rapidly buying properties released by the banks. Many of these investors pay in cash, eliminating worries of default, which further assists an increase in property values. As more properties have been purchased, the inventory of existing builds has diminished, which in turn has caused an increase in demand for finished lots to build on.
A large number of investors and real estate speculators agree that Florida has hit its rock bottom in the housing market, and is now beginning its ascent back to the top. People wishing to purchase property there are able to take advantage of still affordable prices, while property owners are finally beginning to see a steady increase in home values. Rising employment and consumer confidence has led to an increase in demand for property, which in turn fosters even more economic growth, most notably in the construction and tourism industries. The improved economy in other parts of the country has led to an increase in demand of vacation homes, especially for northern “snowbirds”. These factors suggest that the future of “The Sunshine State’s” housing market looks, in a word, “bright”!
About the Author
The preceding article was written by Brian S. from the Rank Executives blog team. Brian highly recommends the services of OlandoROI, where you can search available inventory for investment property in Orlando, FL.