Several cities in Florida – including Orlando, Tampa, and Jacksonville – are listed as some of the best cities to buy a rental property for investment in 2021, according to Money Crashers. The publication analyzed key real estate investment data points including home value index, home price growth, rent index, and gross rent multiplier.
Last year the market has been exceptionally good for investors, but is the Florida housing market still a smart investment for 2021?
Based on the most recent reports from Florida Realtors, the answer is a resounding “Yes!”
It’s true that Florida has one of the hottest real estate markets in the country, and for good reason. The state is bordered by the Gulf of Mexico, the Atlantic Ocean, Alabama, and Georgia.
Florida is an international tourist destination with year-round sunshine (earning the state its nickname “The Sunshine State”) with world-class theme parks. The economy is dynamic and diverse, with dozens of global business headquarters and a government that is both pro-business and pro-development.
Read on to learn why the demand for buying and renting real estate in Florida will keep growing in 2021 and beyond.
Between now and April 1, 2024, the population of Florida is expected to grow by an average of 906 new residents per day, according to a news release from WFLA Channel 8 in Tampa. In fact, over the next two years Florida’s population is expected to grow by more than 700,000 residents.
Key Population Stats:
- In 2018 Florida had a state population of nearly 21.5 million people, according to the U.S. Census Bureau.
- Since 2010 the population of Florida has grown by 13.3% and is currently the third-largest state by population in the U.S.
- The State of Florida expects 906 new residents per day through April 2024, representing an annual compound growth rate of 1.53%.
- In fact, the Florida Chamber of Commerce reports that by 2030 Florida’s population could reach nearly 26 million residents, more than the current population of Australia.
- Florida counties expected to have more than 1.6 million residents in the next ten years are Miami-Dade, Broward, Hillsborough, Orange, and Palm Beach.
- The four largest metro areas in Florida are Miami-Fort Lauderdale-West Palm Beach with 6.1 million residents, Tampa-St. Petersburg-Clearwater with 3.1 million, Orlando-Kissimmee-Sanford with 2.5 million, and Jacksonville with just over 1.5 million residents.
- Although the state’s capital city of Tallahassee only has around 350,000 residents, the city’s growth rate is one of the fastest in Florida.
One of the many reasons that Florida is expected to keep growing so fast is from marketing the state as the ideal business location. The proactive, business-friendly government in Florida is an expert at attracting new high-wage jobs for workers who can compete on a global scale.
Key Employment Stats:
- GDP of Florida is more than $1.1 trillion and has grown by nearly 52% over the past ten years.
- Job growth in Florida was 2.7% last year and ranks as the fifth-best state for doing business, according to Forbes.
- Kiplinger gives Florida a strong economic outlook.
- Unemployment rate in Florida is just 6.1%, with the construction, manufacturing, financial activities, and trade and transportation sectors showing the fastest signs of growth.
- Florida created 22,500 new jobs in last August alone, and remains on a long winning streak of job creation, as the Tampa Bay Times reports.
- Job growth is spread evenly throughout the state with all major metro areas adding new jobs in nearly all of the major employment sectors.
- Job sectors growing the most are healthcare, software, and information and business services, according to the Florida Department of Economic Opportunity.
- The College of Business at the University of Central Florida (UCF) expects the Florida economy to outpace growth in the U.S. over the next four years.
- Major industries in Florida are aviation and aerospace, life sciences, manufacturing, defense and homeland security, information technology, financial and professional services, logistics and distribution, and cleantech.
- Florida is home to 19 Fortune 500 companies including Tech Data, Publix Super Markets, AutoNation, Lennar, CSX, Office Depot, NextEra Energy, Darden Restaurants, and Fidelity National Finance.
- Florida has received numerous top rankings for its business-friendly climate: #2 best state for business, #3 corporate tax environment, #4 lowest private sector unionization rate, and is among the top five states with the best business tax climate.
- Florida has a civilian labor force of over 10.1 million workers, according to the Bureau of Labor Statistics, more people than the entire population of Sweden.
- The workforce in Florida receives top rankings for #1 in innovation, #3 in size, and #4 in workforce training and high-tech employment in the U.S.
- There are almost 160 colleges and universities in Florida including University of Central Florida, Florida International University, University of Florida, University of Miami, and Florida State University.
- 40% of the residents of Florida are college educated, according to U.S. News & World Report.
- Florida’s modern infrastructure is ranked #2 in the U.S. with 15 deepwater seaports, two spaceports, more than 12,000 miles of highways and nearly 3,000 miles of freight rail track routes.
- Orlando International (MCO), Miami International (MIA), Fort Lauderdale International (FLL) and Tampa International (TPA) are the four busiest airports in Florida, handling around 68 million passengers annually.
Real Estate Market
Here’s how one local real estate executive sums up the housing market in Florida: “I don’t anticipate a lot of slowing down coming our way in terms of buyers. The demand to live in Florida is still so incredible.” In fact, the Florida real estate market is seeing some of the most positive numbers in recent memory.
Key Market Stats:
- Median home value in Florida is $267,296 according to Zillow (as of Dec. 2020).
- Florida median home values have grown by 7.9% over the past year.
- Over the past five years home values in Florida have increased by nearly 38%.
- Sales of single-family homes in Florida are up by 21% compared to a year ago, based on the most recent report from Florida Realtors.
- Median sales prices for single-family homes in Florida have increased year-over-year for 108 months in a row.
- Dollar volume of single-family homes sold in Florida rose by 22.5% last year to nearly $125 billion.
- Key real estate markets stats for Florida can vary by area, so be sure to research markets by city in Florida, including Miami, Naples, Tampa, Orlando, Tallahassee, and Jacksonville.
Strong Renters’ Market
Although the demand for real estate in Florida is red hot, the good news for real estate investors is that the number of listings for sale is also on the rise.
According to Florida Realtors, the rental market in Florida will see the demand for affordable housing continue to grow as remote work influences where people can live. That may be one reason why the job market in Florida grew by over 2.7% last year alone.
Key Market Stats:
- Average rent in Florida is $1,790, or about $1.35 per square foot, based on the most recent data from HomeSnacks.
- Rents in Florida are 8.5% higher than the U.S. average, and more than 18% higher than average rents in the USA when measured by rent per square foot.
- Median rents in Florida range from $1,399 for a 1-bedroom place to $4,000 for a 4-bedroom home.
- 34% of the housing units in Florida are occupied by renters, an indication that there may be plenty of room left for growth in the rental market.
- Median household income in Florida is $59,227 and per capita income is $32,887.
- Places in Florida with the highest rents include Southwest Ranches, Key Biscayne, Parkland, and Surfside.
Historic Price Changes & Affordability
Every quarter the FHA publishes its House Price Index report that measures house price appreciation and the percent change in house prices in Florida.
The most recent Index shows that home prices in Florida have increased by more than 248% since the first quarter of 1991. Over the last five years, the price of a home in Florida has grown by nearly 49%, while over the last quarter prices have increased by 2.59%.
U.S. News & World Report recently released its rankings of the best and worst states for housing affordability and overall cost of living. When compiling housing affordability data for Florida, researchers compare median housing prices to median family incomes and mortgage interest rates in the state.
Florida is ranked #35 in affordability, meaning that Florida has one of the least affordable housing markets among all 50 states. By comparison, high-cost states such as Oregon, California, and Hawaii were ranked 48th, 49th, and 50th.
Quality of Life
There are countless reasons why people choose to live and work in Florida. The state offers an almost ideal work-life balance with great job opportunities and near-perfect weather, culture, and recreation.
Key Quality of Life Stats:
- Florida is one of just seven states without personal income tax, according to SmartAsset.
- U.S. News & World Report ranks Florida as the 13th-best state in the country, including top ten ratings for education, economy, and fiscal stability.
- Climate in the Sunshine State has annual summer highs of 81 degrees and winter lows of around 60 degrees.
- Florida is committed to education, with all Florida residents living within 50 miles of a community or state college or university.
- Cost of living in Florida is about 2% below the national average.
- Florida has more than 1,300 golf courses, hundreds of miles of white sand beaches, countless outdoor recreation activities, world-class theme parks, international shopping venues, and plenty of sporting events.
- Florida has three NFL teams: Jacksonville Jaguars, Miami Dolphins, Tampa Bay Buccaneers; two MLB teams: Miami Marlins, Tampa Bay Rays; two NBA teams: Miami Heat and Orlando Magic, and two NHL teams: Florida Panthers and Tampa Bay Lighting, and is a major destination for baseball spring training.
- NASCAR is headquartered in Daytona Beach, PGA of America is headquartered in Palm Beach Gardens, and the ATP World Tour Masters and WTA Premier tennis events are held each year in Miami.