The end of the year means investment prediction time. The latest Emerging Trends in Real Estate forecasts which US property markets are the ones to watch in 2017. Unsurprisingly after an excellent 2016, Florida property is one to keep a keen eye on.
The annual survey compiled jointly by PwC and Urban Land Institute takes an in-depth look at all the fundamentals behind the US market and its different property types. In a nutshell, the US property markets highlighted in Emerging Trends in Real Estate offer “potential for faster growth”.
Top of the markets to watch next year is Dallas Fort Worth, followed by Seattle and Austin. Texan cities are no strangers to this annual survey – Austin and Houston have vied for the top positions in the last three editions. Slightly further down the ranking are three Florida metro areas. Tampa-St Petersburg takes 20th place with Orlando and Miami just behind.
“We like markets with good employment and population fundamentals like you see in markets like Orlando and Tampa,” says one of the survey respondents quoted in the report. Featured statistics show that Orlando’s population is expected to grow 3.2% over next year, four times the US average of 0.8%.
US property markets with the best homebuilding prospects
Another section of the survey looks at the homebuilding situation in different US metro areas to assess their potential. The survey stresses the acute shortage of new property across the US where new construction is failing to keep up with demand.
At the top of the list is Raleigh/Durham in North Carolina, followed by Charleston in South Carolina. Tampa-St Petersburg lies in sixth place while Orlando takes 18th position.
Advantages of the Tampa property market
For PwC and Urban Land Institute, Tampa-St Petersburg stands out among US property markets because of the area’s “dual urban cores”. St Petersburg has the advantage of being viewed “as very walkable” and between them, the two have the potential to become “an 18-hour market”.
As far as fundamentals such household growth and property prices go, Tampa will continue to tick boxes in 2017. According to the survey, the metro area will see the number of households grow by 7.1% over the next three years. The median house price is expected to rise by 7.9% in 2017.
Advantages of the Southwest Florida property market
The Southwest Florida property market also features on the list of those to watch next year. This popular part of the Sunshine State will see a 3.6% growth in its population during 2017 when employment will increase by a massive 4.1%.
This tandem of growth in new inhabitants and jobs will logically lead to a rise in the number of households, predicted to go up by 14.1% over the next four years. The survey expects median house prices in Southwest Florida to rise by 3.6% next year.
Advantages of the Orlando property market
Another highlight among the US property markets to watch next year is Orlando. The survey underlines the metro area’s economic recovery – “one of the strongest recoveries since the global financial crisis”. Not for nothing is Orlando’s population set to grow by 3.2% next year while job opportunities will go up by 3.5%, well ahead of the national average of 1.5%.
In the capital of the Florida holiday industry, the number of households is predicted to go up by 12.2%, one of the highest in the country, over the next three years. Unsurprisingly given the surge in demand, Orlando house prices look set for a 5.7% increase during 2017.
Outlook for apartment properties in the US in 2017
For the survey, apartments rank near the top in terms of investment potential next year after “a long run of success”. They continue to represent good buy-to-let investments based on several key fundamentals.
Probably the most important is the influx of millennials into US property markets. This generation represents the biggest group of potential renters, drawn to the flexibility rental accommodation offers over home ownership. In addition, apartment rentals are attractive to households who have credit issues or cannot comply with lending conditions.
Outlook for single-family homes in the US in 2017
Investment in single-family homes, again for buy-to-let, remains high on the list of preferred investment types. The survey finds that “investors involved in this sector are quite bullish and believe that in most growth markets, for-sale homes are undersupplied”.
National property prices remain slightly below (1.2%) their peak reached in July 2006. However, in many US property markets they fall considerably shorter of this. Such is the case with property in Florida across the board, suggesting plenty of room for growth in 2017.
“The US property markets have provided strong returns through this year and everything points to a continuation of this during 2017,” says Dies Poppeliers, Managing Director of BRIC Group. “This latest survey underlines the potential for certain property types in specific areas and we certainly expect this to be fulfilled.”
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.
(Sources: PwC & Urban Land Institute)