Thanks to the constant sunshine, miles of white sand beaches, and world-renowned cuisine, Miami and South Florida have long been known as some of the most popular destinations for vacationers and residents.
However, many people don’t realize that South Florida’s popularity extends to the real estate market as well.
South Florida homes sell faster than in most other areas of the country and typically at higher prices per square foot.
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However, if you’re thinking about buying or selling property in South Florida, here are some factors that could be driving the region’s hot housing market.
Table of Contents
1. Low-Interest Rates
One of many macroeconomic factors that directly impact home prices, interest rates affect how much home buyers need to borrow and, therefore, how much they have to spend monthly.
As you might imagine, low-interest rates encourage borrowing and give potential homeowners more breathing room if their household income falls short.
Fannie Mae notes that every percentage point drop in mortgage rates translates into borrowers’ additional $2,000 purchasing power.
This explains why most economists agree that lower interest rates increase demand for homes – but also why it can take some time before home prices respond accordingly.
2. Employment Growth
The number of jobs being created in any particular area tells us a lot about its economy. As you might guess, more jobs mean higher wages for locals.
The South Florida area has seen some of the highest job growth in recent years. Growth rates are expected to continue at over 100,000 new jobs per year through 2021.
This not only bodes well for residents but also means that new employees are raising demand for homes in South Florida’s flourishing real estate industry.
3. Population Growth
In previous recessions, Miami’s housing market was one of few bright spots. In part, that’s because international buyers tend to own more than 50% of all homes in some South Florida zip codes.
With money pouring out of China and other emerging markets, demand for US real estate has helped drive up home prices even as everything else in America seems to be slowing down.
If you want to take advantage of that trend, investing in residential real estate can be a great way to turn a nice profit.
The trick is finding a niche market where locals aren’t oversupplied with properties and can make wise investments without getting too nervous about local trends or economic news from overseas.
Conclusion
In a nutshell, the Sunshine State has something for everyone. In addition to its natural beauty and good weather, it offers a wide variety of activities from which to choose.
You can spend your time on one of many spectacular beaches; Engage in world-class boating or fishing; Participate in a considerable number of water sports; Practice your golf skills at one of over 300 courses across the state; Hike through beautiful nature preserves and national parks; Or take part in any number of special events including popular music festivals and food truck gatherings.
With all that going for it plus no state income tax and affordable housing—it’s no wonder so many people call South Florida home!
About Carson Derrow
