The Florida real estate market has grown by leaps and bounds since the Great Recession of 2008, and it doesn’t seem to be slowing, even with the economic uncertainty brought by the COVID-19 pandemic of 2020.
Florida has remained a hot seller’s market through 2020 and into 2021. Like other parts of the country, the Sunshine State enjoyed rising home values as buyer demand increased. Currently, the value of the typical Florida home is $264,149, a 7.1 percent year-over-year increase. The demands of a growing population and a historically low unemployment rate of 3.1 percent helped to create underlying stability.
And, despite the severe impact of COVID-19 on Florida's economy, there is still exceptionally high buyer demand in Florida for a few key reasons:
Historically low-interest rates (below 3% as of the date of this publication).
The brunt of the COVID recession has been born by lower-income earners in industries like tourism, entertainment, and hospitality. While this is a sad and unfair situation, from a purely analytical perspective, it means the buyer pool has not shrunk because the people hardest hit were unlikely to be in the market for a home in 2021.
With COVID-19 proving making the work-from-home model commonplace, Florida is attracting out-of-state migrants from cold-weather states in the North and Midwest as well as from states with higher taxes (like New York and California).
Naturally, some markets are growing faster than others. Here are eight of Florida’s fastest-growing real estate markets.
Florida's Fastest Growing Real Estate Markets for 2021
1. Cape Coral
Home to 32 Fortune 500 companies, Cape Coral, Florida is one of the top 10 metropolitan areas for job growth in the United States. The Cape Coral metro area (including popular cities like Fort Myers and Lehigh Acres) is also among the fastest-growing areas in the country, in terms of population. The median home price here is $284,000, an increase of 16 percent from a year ago. Homes are selling for roughly two percent under list price and take an average of just 20 days to sell.
Jacksonville grew 10.9 percent over the last decade, and experts predict a 50 percent population growth in the next 10 years. The median home sale price is $235,000, an increase of 13.8 percent from last year. Houses remain on the market for an average of 35 days and usually sell for two percent below list price. Jacksonville is a good bet for investors as it's possible to purchase a refurbished foreclosure for up to 30 percent below list value in the greater metro area.
Orlando, home to some of the country's largest theme parks, receives a Redfin Compete Score of 70, or very competitive. The median home price is $282,500, up 6.6 percent over the last year. As proof that the seller's market is currently strong in Orlando, homes sell in just 22 days. The city of Orlando continues to grow at a fast pace, increasing its population by 20.4 percent over the last decade.
Pensacola enjoys lower-than-average unemployment rates, partially due to the strong employment prospects with companies like Gold Coast Health Care and the University of West Florida. The typical home value in Pensacola is $205,500, up 9.7 percent over the previous year, with a projected increase of 8.3% over the year to come. Niche gives Pensacola high marks for families, public schools, nightlife, and diversity.
5. Port Charlotte
The median home price for properties in this unincorporated community on southern Florida's Gulf Coast is $215,990. Properties have increased 10.2 percent over the last year, and the median days a listing spends on the market is down to just 23 days. On a sad note, foreclosures are on the rise in Port Charlotte. But this could provide investment opportunities for investors considering pre-foreclosures, auctions, or bank-owned properties. The community has good public schools and low crime. It is a popular destination for retirees.
6. St. Petersburg
St. Petersburg, part of the Greater Tampa Bay area, has a Redfin Compete Score of 66, making it a somewhat competitive market. The median home sales price is $275,000, reflecting an increase of 18 percent over the last year. Because inventory has tightened throughout Tampa Bay, St. Petersburg homes move to pending after only 21 days on the market and only sell for just over two percent below list price.
The typical home value in Tallahassee has grown from $189,000 in December 2019 to 206,000 in December 2020, reflecting an increase of nearly eight percent. And Zillow® is projecting 2021 growth of nearly 10% more. According to Don Pickett, a Realtor with Caldwell Banker Hartung, the market for single-family homes is strong in this area.
A city of nearly 400,000 residents, Tampa experienced 18.9 percent population growth over the last decade. With a Redfin Compete Score of 73, the real estate market here is very competitive. The median home sale price is currently $290,000, an increase of 16 percent over last year. Unlike other Florida cities, Tampa had tight inventory even before the pandemic, but it’s gotten tighter, with the typically listing staying on the market just 18 days.
Increasing Sales Prices
While there was some concern about the potential for falling sales prices due to the COVID-19 outbreak and subsequent recession, real estate markets in Florida have weathered the pandemic well. Most experts now project increasing sales prices across most Florida housing markets in 2021.
Although it has eased somewhat, net migration to the Sunshine State is predicted to continue over the next five years at a rate of 1.5 percent per year. People over the age of 55 are expected to make up 53.2 percent of those moving to Florida from other parts of the United States. That continued trend bodes well for those looking to invest in retirement communities throughout the state.
The Potential for Increased Foreclosures
Florida was one of the states to suffer the most from foreclosures after the collapse of the housing market in 2007. Governor DeSantis has already extended a moratorium on foreclosures in Florida twice. However, the extended ban only applies to single-family homeowners affected by COVID-19, and analysts fear that vague language in the extension may contribute to a rise in foreclosures statewide. While no one wants to see a rise in foreclosures, this could represent an investment opportunity for real estate investors.
Despite the initial concern over the possibility of the COVID-19 recession impacting Florida’s housing markets, most of Florida is seeing continued growth in population, home values, and sales prices. Homes are selling faster and for more money than they did before the pandemic. Some areas are seeing an increase in foreclosures, but even these outliers are calming down as the economy continues to recover from the pandemic. All in all, 2021 looks to be a good year to be in the Florida real estate industry.