Forecasting what is in store for the Florida property market in 2017 was one of the topics at the recent Florida Realtors Mid-Winter Business Meetings. Based on the findings at the meet-up, this news article lists the highlights and trends expected over the next year.
More jobs mean more demand
Expert analysis was unanimous in that the Sunshine State will continue to create jobs. Employment rose by 3.1 per cent in 2016 when Florida added 251,400 jobs. This high rate is well ahead of the national average (1.5 per cent) and the main factor behind Florida’s excellent economic position.
“Florida is outperforming the country because of better job creation,” Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), told those attending the meetings.
Echoing this sentiment, economist Dr Elliot Eisenberg also claimed that “the good news is that here in Florida, you’re in the right place”. He described the economic recovery in the state as “robust” and said that “Florida is doing fine economically, unemployment is OK and foreclosures are diminishing”.
Florida property market in 2017 has room for growth
The upward trend in job creation looks set to continue, which will in turn fuel Florida housing. According to Yun, property sales in the US last year were the best for a decade. Some 5.5 million homes changed hands, a sign of the buoyancy in the market. Yun points out, however, that there’s plenty of room for growth in the market since sales of US property are still a long way from their peak of 7.2 million in 2006.
The same would appear to apply to the Florida property market in 2017. Sales of both single family homes and condo properties in the state rose at the end of last year. Those for single family homes went up in 15 out of the 22 metropolitan areas.
Shortage of new homes in Florida
Like the rest of the US, Florida suffers from an acute shortage of new property. Sales of new single family homes soared in 2016 throughout the country. The 12.2 per cent rise in sales was the highest since 2007. In December alone, 259,000 new properties were sold.
Analysts expect this tendency to continue over the next year. According to the National Association of Home Builders, “housing starts are expected to rise 10 per cent over the course of 2017”. However, despite the surge, the supply levels remain low. “There’s not enough inventory of homes for sale and builders aren’t building,” Eisenberg told attendees.
Low inventory in Florida property market in 2017
Strong demand and a shortage of properties will not improve inventory levels, already very low for single family homes in Florida. In December, they stood at just 3.9 months.
Market observers noted that the millennial market is likely to exert further pressure on supply in 2017. This generation aged between 18 and 34 currently accounts for 42 per cent of the market. This share will increase dramatically over the next five years when around 92 million more join them. A recent survey found that 93 per cent of millennials intend to purchase a home in the future.
Strong market for Florida condos
Another trend for the Florida property market in 2017 is likely to be the continuing strength of the condo market. The Florida Realtors Meetings reported that condo sales make up 28 per cent of the share in Florida, considerably higher than the national average of 12 per cent.
Fewer foreclosure properties in Florida
Just a few years ago, the Florida property market was awash with foreclosure properties. During 2015 and 2016, the number decreased considerably and Florida no longer tops the nation’s foreclosure rate.
In 2015, 10 per cent of properties were distressed, a figure that fell to 5 per cent last year. Analysts expect to see this fall even further during this year and as a result, foreclosures will form a negligible part of the market during 2017.
Consumer confidence riding high
If the figures for January are anything to go by, optimism will be a defining characteristic of the Florida property market in 2017. The consumer confidence survey in the first month of this year was the highest it has been since March 2002. “Floridians are optimistic about their own finances,” said Hector Sandoval, Director of the Economic Analysis Program who conduct the monthly survey. This sentiment bodes well for the first half of the year at least.
“Florida is undoubtedly performing better than the rest of the US, both economically and in terms of its property market,” says Dies Poppeliers, Managing Director of BRIC Group. “All the signs point to a year of strong demand, which is good news for investors.”
BRIC Group, an investment company specialising in global real estate opportunities, offers US real estate investments including turnkey properties in Florida and Houston, and land plots in Florida. BRIC Group is also developing The Coral resort, in Northeast Brazil, a luxury beachfront resort with land and villa investment opportunities. BRIC Group has been creating wealth for its clients since 1996 and has offices in Brazil, Dubai (consulting office), Hungary, Spain and the US.