With most of the country stuck inside, Florida’s real estate market has been booming as people seek out sun, sand and space.
An open economy, warm climate, looser mask-wearing requirements and relatively low rates of COVID 19 has seen Florida shoot up the real estate map. Buyers of all kinds are flooding into the market, but is this boom here to stay?
According to data from One Sotheby’s, Florida’s coastal economy is thriving, and so is its property market. The reason, they say, can be split into the positive pre-Covid environment of early 2020 and the post covid climate as low mortgage rates, and a desire for wide open spaces, has created a surge of people shifting from urban areas towards the countryside.
Let the good times roll.
It’s not hard to see why Florida is becoming so popular. Elsewhere in the US, Covid-19 and the winter climate holds the economy in its icy grip. Partial restrictions, rising infection rates and closure of many businesses see people craving anywhere with a hint of something to do. Florida, with its beaches, theme parks and temperatures hovering around the 76 degrees mark, is precisely what they are looking for.
Add to that a strong economy and the fact that Covid 19 has not had the same crippling impact seen elsewhere, and you have everything you need. Inevitably, the real estate market has picked up, but will this be a temporary boom, or are we looking at something more permanent?
Everywhere you look, the market is booming. Luxury properties are the subject of intense bidding wars going for millions to wealthy purchasers with celebrity buyers such as Ivanka Trump and Jared Kushner recently snatching up prime properties.
This represents a change of tune from the past few years when the majority of buyers at the top end of the market were foreign, mainly from Russia, Latin America or Asia. The international set are still purchasing, but they are joined by America’s ultra high net worth individuals. Progressively, Florida is turning into a Monaco style haven for the rich and famous.
Beyond these stories, the data tells its own story. Average for sale prices for family homes has shot up over the past few tears. Miami-Dade saw more than a 42% gain. Palm Beach rose by 20%, and Broward is up by 12.5%. Sales of homes over $3million have increased in seven consecutive months.
Newer developments are almost 100% sold out, with even condominiums exceeding demand, especially for complexes with amenities such as a swimming pool.
In many ways, this is a confluence of pandemic era demands. The desire for wide open spaces has combined with historically low mortgage rates. This makes some people nervous. If this is a moment in time, what happens once the market returns to a semblance of normality?
Demand has been building for some time. South Florida has seen an influx of buyers fleeing the high density and high-cost property markets of New York. The desire for a better standard of living at a lower cost has seen people flooding towards a state which seems to have it all.
Indeed, the main driver might turn out to be the tax reform act of 2017. This move which was seen by some as an attempt by Donald Trump to punish ‘blue’ states such as New York and Illinois, saw a mass of migration towards places such as South Florida. Covid 19 simply served as an accelerator. So, while this trend may slow down after the pandemic unless President Biden repeals the law, the market looks certain to stay hot for the foreseeable future.