A Look at South Florida’s Real Estate Market For 2021
The housing market in South Florida is soaring, with single-family homes sales increasing by over 24% and median sales prices growing by nearly 18% compared to one year ago. South Florida is experiencing a boom in real estate demand due to the influx of new residents and relocations of businesses from New York City.
Rising home prices can be bad news for some homebuyers but it is good news for investors in rental property. This helps to explain why South Florida has such strong rental growth.
South Florida is located in the southernmost region of Florida and contains about 100 cities and towns, including Miami, Fort Lauderdale, and West Palm Beach.
Also known as the Greater Miami Area, South Florida is the 7th-largest metropolitan area in the U.S. and the 2nd-largest in the southeastern U.S., right behind the Washington-Arlington-Alexandria MSA. It covers more than 6 000 square miles in three counties, Broward, Palm Beach, and has more than 6.7 million residents.
The region’s growing job market, population growth, and quality of living make it a great place to do business. It is also a good location for local and international investors, as well as immigrants and locals. Real estate investors looking for long-term appreciation and predictable cash flow are all attracted to the region.
Florida’s population is expected to increase by almost 26 million people by 2030, with South Florida leading the way, according to the Florida Chamber of Commerce. South Florida’s population growth is largely due to the influx of immigrants from abroad and people and businesses moving from high-tax areas.
The following are key population statistics:
- South Florida has a population of 6.2 million.
- The South Florida region is projected to increase by more than 12% for each of the next three decades.
- South Florida’s population is projected to reach 6.9 million in the next ten years, and 7.6 million by 2045, based on research by the University of Florida.
- Over the last four years, population growth rates in South Florida have begun slowing, averaging about 0.6% for the three-county region.
- Net population gains in South Florida are driven by foreign-born residents immigrating to the U.S., as reported by the Miami Herald.
- The region is home to nearly as many immigrants as New York City. More than 87.2% are South Florida residents who were born in Latin America.
The job market
South Florida has the 12th largest economy in the United States. Its economic output is roughly equal to that of Chile, Israel, Colombia, Colombia, and Hong Kong. Because of the high level of domestic and international commerce and trade, the 120-mile stretch of South Florida that runs along Miami-Dade, Broward, and Palm Beach counties are often called Florida’s Gold Coast.
Here are the key employment statistics:
- The GDP of South Florida is over $377 billion and has grown by more than 59% over the last ten years.
- Non-farm employment is more than 2.7 million, with nearly 70,000 new jobs added year-over-year, based on a report from the Business Development Board of Palm Beach County (BDB).
- Over the next seven years, the job market in South Florida is projected to grow by 7.5%, according to the Florida Department of Economic Security.
- The unemployment rate in South Florida is lower than other major metro areas such as Boston, New York, and San Francisco, as reported by the BLS.
- The lowest unemployment rates in South Florida are found in the education, health, and professional business sectors.
- Construction, financial services, transport, leisure, and hospitality are the industries with the highest projected job growth over the next seven-year.
- South Florida is the 2nd-largest international banking center in the U.S., according to Florida Trend.
- South Florida is home to more than 1,400 multinational corporations as well as 75 foreign consulates.
- South Florida is the home of both domestic and international divisions for Spanish-language broadcasters Univision Communications and NBC Universal Telemundo.
- Aldi, Ecolab, and Chiquita Brands International are some of the high-profile South Florida companies. Sixt rent a vehicle is based in Hong Kong and Techtronic Industries, which makes brands like Ryobi, Hoover, and Milwaukee Tool.
- South Florida companies that plan on expanding include aviation/aerospace firm Cyient Defense Services in Jupiter, FL; Fluorotek in Riviera Beach, engineering and tech company Levitas in West Palm Beach, physician staffing firm Hayes Locums in Fort Lauderdale, Kellstrom Aerospace in Miramar, financial consulting firm Slalom in Miami, and aerospace giant Bombardier in the City of Opa-Locka.
- There are many major public and private universities and colleges in South Florida, including the University of Miami, Florida International University, and Miami Dade College.
- Averagely, 86% have completed high school or higher and almost 32% hold a bachelor’s or advanced degree.
- I-95, I-75, and I-395 are all interstate highways in South Florida.
Real Estate Market
Single-family home sales are on the rise in South Florida’s housing markets. According to the South Florida Business Journal, sales volume and prices have grown by double digits with sales of single-family homes increasing by 24.4% compared to the same month a year ago.
The Key Market Stats
The three-county South Florida region, Miami-Dade and Broward counties, according to Realtor.com (as per May 2021 and the most current information from Zillow.
- Miami, Hialeah, and Homestead are the biggest cities
- Zillow Home Value Index: 361,829
- The annual increase in home value: 9.5%
- Median listing price: $435,000
- Price Median Selling: $410,000
- The median list price per square foot: $319 per square foot
- Median Days on Market: 82
- The ratio of sale-to-list: 97.11%
- Pinecrest, one of the 76 Miami-Dade County cities, is the most expensive. It has a median listing cost of $1.5million. North Miami is the least affordable with a median listing value of $297,000
- The biggest cities are Fort Lauderdale, Pompano Beach, and Hollywood
- Zillow Home Value Index: 319,823
- The annual increase in home value: 10.4%
- Median listing price: $359,000
- The median selling price of $350,000
- The median list price per square foot: $241 per square foot
- Median Days on Market: 67
- Sales-to-list price ratio: 98,21%
- Parkland, the most expensive of the 40 Broward County cities, has a median listing cost of $939,000. The city of Sunrise, with a median listing value of $169,000.
Palm Beach County
- Biggest cities: Boca Raton, Boynton Beach, West Palm Beach, Palm Beach Garden
- Zillow Home Value Index: 345,638
- An annual increase in home value: 13.1%
- Median listing price: $385,000
- Median selling price of $402,400
- Median list price per square foot: $228 per square foot
- Median: 64 Days on the market
- Sales-to-list ratio: 98.59%
- The City of Palm Beach, with its median listing price of $1.8million, is the most expensive of the 64 Palm Beach County cities. Village of Palm Springs, on the other hand, is the most affordable with a median listing cost of $164,000.
Historical Price Changes and Housing Affordability
Real estate investors have two options to forecast rental demand: Analyzing historic changes in home prices and affordability. The Freddie Mac House Price Index, (FMHPI), and Kiplinger’s Housing Affordability Report are two readily available sources for housing data.
Based on data from Freddie’s most recent FMHPI report, these are the historic changes in home prices for South Florida:
Miami-Fort Lauderdale-West Palm Beach MSA
- May 2016 HPI: 205.7
- May 2021 HPI 300.6
- 5-year change in home prices: 45.4%
- 1-year change in home prices: 14.7%
- Monthly changes in home prices 1.5%
The housing affordability report from Kiplinger compares median home prices with the median income needed to purchase a home.
Kiplinger ranks the 100 most affordable metropolitan areas based on an affordability index scale from 1-10, where 1 is the most affordable market and 10 is the least affordable.
Reports from the firm on analysis of housing affordability within the Greater Miami Area
- The Greater Miami Area saw a 17.1% decline in home prices since the May 2006 peak of the real estate market.
- The Greater Miami Area has seen a 103.4% increase in home prices since March 2012’s bottom of the real estate market.
- Greater Miami’s affordability index is 8/10, meaning that it’s one of the most affordable areas in America to purchase a home.
Quality of life
Several neighborhoods in Miami, Fort Lauderdale, and West Palm Beach were recently listed among South Florida’s best neighborhoods to live in by the South Florida Business Journal. The report compared key quality-of-life factors like cost of living, employment opportunities, crime statistics, and public schools.
The Key Quality of Life Stats
- South Florida is the only major area in the United States with a tropical climate.
- Less than a four-hour drive to world-class Orlando-area theme parks such as Disney, SeaWorld, and Universal Studios Florida, and Epcot.
- PGA of America rates the Blue Monster at Doral and Heron Creek Golf Club as two of the best golf courses in South Florida.
- The best beaches in South Florida are Pompano Beach and South Beach.
- According to the U.S., the three top hospitals in South Florida are Cleveland Clinic Florida and Baptist Hospital of Miami. News & World Report.
- The Miami Dolphins, Miami Marlins, and Miami Heat are some of the South Florida pro sports teams.
This post was written by a real estate expert from the Dotoli group. Josh Dotoli is Paramount Residences #1 Selling Realtor with nine sales in 2021, 3x more sales than any other Realtor selling in the building. The Paramount Residences enjoys a prime beach area location. It is a Ft. Lauderdale oceanfront condo located across from the beach.