Yahoo Finance I’m A Real Estate Agent: My Predictions for the Florida Housing Market Over the Next 5 Years
No one can know what the future holds, particularly in Florida. The southeastern coastal state is constantly in flux, going through booms and busts in terms of real estate based on politics, climate change, cost of living changes and population demographics.
“Florida’s growth in wealth and population, as well as in home prices, will continue not for five years but for decades,” predicted Julio Ybanez of Florida Extraordinary Condos. “Those who think they have missed the train or [are] losing future appreciation by not purchasing real estate in Florida at lower prices between 2020 and 2022 are not in touch with demography.”
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GOBankingRates checked in with Ybanez and a few other real estate agents who shared their predictions of the Florida housing market over the next five years. Should you buy property in the Sunshine State between now and 2029?
Here’s what the experts had to say:
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Continued Population Growth
Florida’s population is expected to continue growing due to its warm climate, attractive tax policies, and retirement-friendly environment, in the opinion of Colten Claus, an Associate Broker with 8z Real Estate.
“This influx of new residents, particularly retirees and remote workers, will sustain demand for housing, potentially driving up property values in popular areas,” said Claus.
Florida is expected to see continued population growth due to its favorable climate, job opportunities, and lack of state income tax agreed Alejandro Ferro the CEO of Ferro Home Buyers.
“This influx of residents will likely sustain demand for housing, especially in metropolitan areas such as Miami, Orlando, and Tampa,” Ferro suggested. “The state’s appeal to retirees will also contribute to this growth, keeping the market robust.”
“The US will continue growing its population and maintaining its status as the third most populated country in the world,” Ybanez said. “Proportionally, Florida will be the state absorbing the major percentage of that population; it’s impossible for the housing stock not to continue its increase in value with that demand pressure.”
Rising Home Prices
Claus foresaw that Florida home prices would rise steadily over the next five years, fueled by high demand and limited supply.
“Cities like Miami, Tampa, and Orlando may see significant appreciation in home values, making it a good investment for early buyers,” Claus explained.
Ferro agrees that Florida home prices will likely rise steadily through 2029.
“While the rate of increase might slow compared to the post-pandemic boom, factors such as limited housing supply, increased construction costs, and high demand will continue to push prices upward. Buyers should anticipate paying more for homes, particularly in desirable neighborhoods and coastal areas,” Ferro said.
“Interest rates are likely to fluctuate, affecting mortgage affordability,” Ferro continued. “While rates have been relatively low in recent years, potential increases by the Federal Reserve to combat inflation could make borrowing more expensive. Buyers might need to act quickly to lock in favorable rates or risk higher monthly payments.”
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Increased Development in Suburban and Rural Areas
As urban areas become more expensive, there will be increased development in suburban and rural areas, according to Claus.
“This trend will provide more affordable housing options and promote growth in less developed regions of the state,” Claus said.
“The state and local governments are likely to invest in infrastructure projects to support the growing population,” Ferro said. “Improvements in transportation, healthcare, and education facilities will enhance the livability of various regions, making them more attractive to homebuyers and increasing property values.”
Impact of Climate Change
“Climate change will continue to impact the Florida housing market, particularly in coastal areas vulnerable to rising sea levels and hurricanes,” Claus explained.
Ferro also thought climate change would play a significant role in shaping the Florida housing market through 2029 and beyond.
“Areas prone to flooding, hurricanes, and rising sea levels may see decreased demand and lower property values,” Ferro described. “Buyers will need to consider environmental risks and invest in properties with resilient infrastructure or less vulnerable inland areas.”
“Buyers may see increased insurance costs and stricter building codes, but there will also be opportunities in inland areas less affected by these risks,” Claus noted.
Strengthening Rental Market
With rising home prices and interest rates, Ferro estimated more people might opt for renting over buying in the second half of the 2020 decade.
“This will lead to a robust rental market, providing opportunities for investors to purchase properties for rental income,” Ferro said. “High demand for rental units, especially in urban centers, drives rental prices up.”
“The rental market in Florida will remain strong, driven by both population growth and affordability challenges,” Claus said. “Investors in rental properties can expect stable demand, particularly in cities with major universities and tourist attractions.”
Growth in Luxury Real Estate
“Florida’s luxury real estate market will continue to thrive, attracting wealthy buyers from both the U.S. and abroad,” Claus said. “High-end properties in cities like Miami and Palm Beach will see strong demand, making them lucrative investments for those targeting the luxury segment.”
It’s not just new builds that change the Florida real estate market, but classic homes that define the state’s style.
“Many older beachfront structures, especially those built in the 1950s and 1960s in the most valuable areas of the state, will be purchased by developers and turned into modern high-rise structures set to change the coastal residential landscape,” Ybanez shared.
Technological Integration in Real Estate
Claus predicted that technological integration into the real estate industry enhances the buying and selling experience.
“Virtual tours, AI-driven marketing strategies, and online transaction platforms will become more prevalent, making the market more efficient and accessible,” Claus remarked.
Ferro also believed that technology adaptation in real estate transactions will increase.
“From virtual tours and digital closings to blockchain for secure transactions, technological advancements will streamline the home buying process, making it more efficient and accessible, especially for out-of-state buyers,” Ferro added.
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This article originally appeared on GOBankingRates.com: I’m A Real Estate Agent: My Predictions for the Florida Housing Market Over the Next 5 Years
