Ever wondered what will happen to the Florida real estate market in the next few years? It may be a hot business right now but we cannot tell what exactly will happen. However, it is possible to predict probable outcomes using data and trends. This will help us to foresee what to expect as we move forward.
Make sure you are well informed about the current trends in the market. This can help you decide before diving into that big purchase you are eyeing. Experts at Vaster Capital have compiled Florida real estate market data and research to guide you throughout 2021 and 2022.
More people will move to Florida
Did you know that Florida has been a favorite state to move to for most Americans? COVID-19 has even made the state more appealing to people due to its sunny atmosphere. This was even strengthened as work from home options have become a trend in most industries. On average, the state receives 777 domestic migrants daily. The numbers even increased to a thousand with 950 people moving in permanently to the state coming from New Jersey, Connecticut, New York and Massachusetts among others.
Current interest rates remain low
Florida is not the only state in the US experiencing an abundant thrive in the real estate market. This trend has also been seen all throughout the country as interest rates have been offered lower. In return, the buying power of most purchasers has improved. The move was a response due to the economic conditions brought by the pandemic. You can take this as good news because the Federal Reserve announced to keep interest rates low at least until 2023.
The demand will continuously overpower the supply
Currently, the demand for real property is more than the available supply. This is because the generation of more than 72 million millennials are entering into property buying for the first time. A lot of them have saved enough cash to afford a down payment. Most of them also want to take advantage of low interest rates. Also, homeowners have been more hesitant to sell property knowing the tough competition in the market. Lastly, COVID-19 has halted several constructions resulting in lowered supply.
New home construction will gain popularity
Labor issues as well as supply will start to resolve as we find more ways to move away from this pandemic. This will enable home construction to meet demands. Last March 2021, home construction rose by 19.4%. This figure showed the highest level since 2006 and the biggest monthly gain since the 90s.
Multifamily real estate will thrive extremely
The single-family home market has been growing in the past year. However, multi-family homes will be more lucrative as we move further. People who would opt to rent will have more finances and will be moving away from the economy we are seeing now with this pandemic going on. Vacancy levels will be low and there is a projected 6% increase in net rentals for next year which makes multi-family homes a great investment.
Vacation rentals will gain more popularity than before
People will become more anxious to travel after a long period of being ordered to stay at home. To experience a change of environment, vacation rentals will be a popular choice. It is projected that home rentals for vacation in the US is set to exceed $88 billion in 2023. Millennials are seen to boost this trend as they seek rural bookings instead of going to urban areas.
Real estate prices and rents will increase continuously
As we know, the higher the demand, the more expensive it will be. This is the same when it comes to real estate properties. According to Freddie Mac, home prices will rise in 2021 and 2022. Moreover, even as the economy improves after this pandemic, interests will still remain low with eager buyers entering the market. In return, prices will steadily increase.