Since the housing market crash of 2008, Florida has emerged as one of the hottest real estate markets in the US. In the first quarter of 2020, the housing price index (HPI) ranked the Florida real estate market no. 12, with an average year-over-year price growth of 7.1%. Florida markets such as Jacksonville, Fort Lauderdale, Orlando, and Tampa-Saint Petersburg-Clearwater occupied some of the top slots for year-over-year appreciation.
However, in the second quarter of 2020, the Florida real estate market felt the impact of COVID-19 and the ensuing economic turmoil. Data from Florida Realtors revealed that closed sales of condo-townhouses dropped 33.9% from the Q2 2019 level, while closed single-family homes were down 19.2%.
With the gradual reopening of the economy, things are now changing for the better in the Florida real estate market. Here are Mashvisor’s stats for how the housing market is generally performing, as of the end of Q3 2020:
Mashvisor’s Florida Real Estate Market Statistics
- Median Property Price: $487,033
- Price per Square Foot: $281
- Price to Rent Ratio: 22
- Traditional Rental Income: $1,883
- Traditional Cash on Cash Return: 2.6%
- Airbnb Daily Rate: $187
- Airbnb Rental Income: $2,359
- Airbnb Cash on Cash Return: 2.2%
- Airbnb Occupancy Rate: 54%
Of course, Florida is not in the clear yet as far as COVID-19 is concerned. Still, there are some positive market trends on the horizon for the Sunshine State. Here are some Florida housing market predictions for 2021:
5 Florida Housing Market Predictions for 2021
The population will increase
The current population of Florida is 21,993,000. With a growth rate of about 1.6%, the number is expected to rise significantly in 2021. Much of the population increase is a result of migration from overseas, as well as from within the US itself. There is especially a large influx of Hispanic immigrants from Cuba, Spain, and Latin America. Due to this, Spanish is now spoken by 20% of Florida residents. With this population growth, the real estate market forecast is that the demand for rental properties will be on the rise in 2021. This means landlords can charge higher rental rates for their properties.
There will be a higher demand for real estate
Understandably, many buyers and sellers in the Florida real estate market hit the pause button earlier in the year due to coronavirus. However, the Sunshine State started showing signs of recovery in July. According to Florida Realtors, the year-over single-family unit home sales increased by 11.7% compared to July 2019. According to the Chief Economist Dr. Brad O’Connor, the main factors contributing to this surge is the pent-up demand from the failed spring buying season, as well as record-low mortgage rates. Since the interest rates are not expected to increase in the near future, the Florida housing market forecast is that demand will continue increasing well into 2021.
Property prices will continue to increase
Despite the increased demand for property in the Florida real estate market, the mid-year housing inventory levels are very low. Chief Economist O’Connor says that inventory levels are down 27% compared to 2019.
Low inventory combined with rising demand means a rise in property prices. Data from the Florida Realtors Research Department showed that the median price for single-family properties was $277,500 in the second quarter, an increase of 4.7% from the previous year. The median price for a condo-townhouse home was $207,000, 6.2% higher than in 2019. This trend of increasing prices is likely to continue in 2021.
The Florida real estate market 2021 will be a seller’s market
Is it a buyer’s or seller’s market in Florida? A low supply of homes means that sellers have the upper hand in any negotiation. Therefore, the Florida real estate market will remain a seller’s market well into 2021.
There will be high demand for Airbnb rentals
According to a recent study by the University of Central Florida, short term rental properties in Florida generated about $27 billion in 2018. Though the vacation rental industry was adversely affected by the coronavirus, things are now picking up. For example, vacation rentals in Northeast Florida got permission to reopen on May 19. Key Data Dashboard reports that the number of bookings doubled within 24 hours. The reopening of Florida’s coastline and attractions such as Disney World, Kennedy Space Center, Universal World, and The Ringling will keep demand for short-term rentals high in 2021.
When it comes to rules and regulations, Florida has some of the most Airbnb-friendly laws. The current law does not allow cities and counties to prohibit short-term rentals of residential properties. And Mashvisor recently reported that new legislation might put all Airbnb Florida income properties under state regulation. As of now, there are no major changes on the horizon for Airbnb Florida laws in 2021.
With the increased demand for vacation rental properties and the friendly Airbnb laws, real estate investors will continue enjoying a good Airbnb occupancy rate in 2021. Below, you’ll find a list of the best places to buy a vacation home in the Florida real estate market.
The Best Places to Invest in Florida Real Estate for 2021
Thinking of buying property in the Florida real estate market 2021? Here are some of the best places to invest in the Florida real estate market based on Mashvisor data:
5 Best Places to Invest in Long-Term Rental Properties
- Median Property Price: $412,105
- Price per Square Foot: $239
- Price to Rent Ratio: 14
- Traditional Rental Income: $2,403
- Traditional Cash on Cash Return: 4.8%
#2. Miami Gardens
- Median Property Price: $268,487
- Price per Square Foot: $175
- Price to Rent Ratio: 13
- Traditional Rental Income: $1,725
- Traditional Cash on Cash Return: 4.5%
- Median Property Price: $188,185
- Price per Square Foot: $155
- Price to Rent Ratio: 11
- Traditional Rental Income: $1,395
- Traditional Cash on Cash Return: 4.4%
#4. Lake Worth
- Median Property Price: $308,369
- Price per Square Foot: $181
- Price to Rent Ratio: 14
- Traditional Rental Income: $1,799
- Traditional Cash on Cash Return: 4.2%
- Median Property Price: $406,129
- Price per Square Foot: $197
- Price to Rent Ratio: 17
- Traditional Rental Income: $2,048
- Traditional Cash on Cash Return: 3.8%
5 Best Places to Invest in Airbnb Rental Properties
Be sure to check Airbnb laws for any city you plan to buy an Airbnb property in.
- Median Property Price: $276,209
- Price per Square Foot: $150
- Airbnb Daily Rate: $133
- Airbnb Rental Income: $2,382
- Airbnb Cash on Cash Return: 5.1%
- Airbnb Occupancy Rate: 60%
- Median Property Price: $484,052
- Price per Square Foot: $220
- Airbnb Daily Rate: $132
- Airbnb Rental Income:
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