Shedding light on Florida’s Single Family Homes market in 2022, Fred’s valuable insights cover topics such as supply and demand, the backlog of build-for-rent homes, the impact of remote working on the Florida rental market, as well as unemployment rates and affordability across the state.
What is the supply/demand situation for single family homes in Southwest Florida?
The market for single family homes in Southwest Florida is still extremely strong. The amount of apartment deliveries in cities like Cape Coral, North Port and Port Charlotte have been low so the majority of the rental inventory is made up of single family homes.
Not only is the tenant class preferring single family homes to apartments, but many of them currently live in 1980-built houses and the switch to new inventory has been a big win.
How big is the backlog of build-for-rent homes, and does Benoit Properties have any concerns about market saturation/over-supply?
Getting homes on the ground is taking time. The county permitting/inspection offices are overwhelmed and do not have enough staff. This alone has slowed down the development of new builds, in an attempt to keep the number under control.
Over the last 24 months we have seen an increase in land lot value. This has largely been due to the fact that lots for master-planned communities sold out, and some of the National Home Builders were forced to acquire single family home lots as an alternative. Their move into the Florida Single Family Homes space drove lot prices up considerably.
Eighteen months ago, single family lots in Cape Coral traded for $12,000; today they are $45,000+. Last month we listed two Banyan homes on the market for $389,900 and sold both to end users in less than a week. Last time we looked there were 7 new completed homes on the market in Cape Coral.
To what extent has this region benefitted from excess demand due to the rise of remote working and people buying second homes? What will happen if the work-from-home dynamic reverses and renters need to move back to the big cities?
Florida definitely benefitted from an influx in remote workers due to its low cost of living.
Data from U-Haul—an American moving-truck, trailer, and self-storage company—revealed that Florida has 10 of the Top 25 U.S Growth Cities. Amongst the 10 Florida cities that ranked, North Port was fourth and Cape Coral sixth.
U-Haul calculates the growth rate of cities by the net gain of one-way U-Haul trucks entering a city/market versus those leaving that city/market per year.
And while their migration trends don’t correlate directly with population or economic growth, the U-Haul Growth Index provides a good insight into how well Florida is attracting and maintaining residents.
Miguel Caminos, U-Haul Company of Orlando President, states, “Florida remains competitive, especially during the COVID era. We’ve pushed through, and business is thriving. It’s not just people moving to Florida, but businesses moving because they see better opportunities here.”
What is the local employment situation like? Who are the big employers? How comfortable is Benoit Properties that renters can afford to invest in single family homes?
Southwest Florida thrives on tourism. Visitor numbers over the last 10-15 years have increased dramatically.
And, with many businesses keen to capitalise on Florida’s flourishing economy, the state is teeming with employment opportunities. The unemployment rate went from 8.9% in April 2021 to 3% the following year. It is a preferred destination for college graduates. There are a lot of reasons why workers would choose to move to, and stay in, Florida.
Florida also saw an increase in retirees in 2021, with a lot of people entering into early retirement. Therefore, while it’s true some renters may move back to the cities for work, those giving up work are moving to the state in higher numbers.
Our single family homes in Florida rent for $2400 without any resistance. Market rent is probably $2500-$2600, but our management team—Benoit Management—rent for lower to fill homes fast.
If you’re thinking about investing in Florida’s Single Family Homes market, you can rest assured that demand is strong, and the sunshine state’s future is bright. Our properties are fully managed by our dedicated in-house management team, making them an attractive opportunity for time-poor investors.
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