Florida’s Top Real Estate Investment Markets In 2016
By JD Esajian on December 4, 2015
What will Florida’s top real estate markets look like for investors in 2016?
In addition to California and the Northeast, Florida continues to be one of the most popular parts of the country for real estate investment, and attracting new residents. So what do the Sunshine State’s most notable property markets look like as we roll into 2016?
Miami
Miami is one of the most popular cities on the planet. As an Alpha World City, Miami is quickly catching up to the pricing of New York and London. Analysts predict Miami could lead the nation in price growth in 2016, with an almost 20% rise in property values. In contrast to many other U.S. markets, Miami boasts thousands of new construction units to come online over the next 12 months. This will provide the fuel for more rapid sales and appreciation activity versus areas where inventory is more limited. While Miami is best known for its sizzling South Beach, Downtown, and Brickell districts, the massive metro area provides immense room for growth with plenty of surprisingly low cost properties on the border of new development. With rents already taking up around 45% of income, and mortgage credit becoming easier to get, many renters could convert to becoming buyers in 2016. While the action has been furious over the last few years, the market have been dominated by cash buyers; injecting solid equity and protection from any downside. Both rents and property prices are expected to keep rising, while development expands outwards from the core.
Orlando
In terms of national and international visibility, Orlando comes in at nearly a tie with Miami. Orlando is, of course, most famous for its Disney theme parks, but is also a popular convention destination. Millions flock to Orlando each year; supporting a booming vacation condo and housing market. The Greater Orlando real estate market is massive and incorporates everything from tiny hotel room sized timeshares to expansive celebrity worthy luxury homes. Orlando is unlikely to see demand or popularity drop, though its property performance can sometimes be influenced by international factors.
Jacksonville
While often overlook, Jacksonville is actually the largest city in the state. As a major port and business hub, this a busy destination with strong fundamentals. Jacksonville has been highlighted by RealtyTrac as one of the most profitable locations in the country for flipping houses in both terms of dollar and percentage profit. The entry costs are very low for new investors, with upscale beach properties serving the luxury real estate market. Jacksonville ought to see robust growth and development throughout 2016 with plenty of inventory, sales activity, and price growth.
Tampa
Tampa has taken off, and is regaining its popularity with international real estate investors that it enjoyed during the boom of the early 2000s. Rents have climbed rapidly, and new development is underway. Designated as one of the top tech markets and cities for millennials, this blossoming destination has lots of room to grow over the next year.
Naples
Naples is pegged to be one of the United States’ best markets for property value growth over the next 5 years. Prices are expected to rise around 40% over this period, with rental vacancies close to zero, and rents rising. This is one of the wealthiest cities in the world, and an enclave of affluent older generations. Entry prices can be limiting, as asking prices soar to over $40M. However, just north of Naples lies the micro markets of Bonita Springs and Estero, Florida. North of these is Ft. Myers and the regional and international SW Florida airport. Fort Myers is home to many inexpensive properties, yet continues to struggle with its reputation. Bonita Springs and Estero are booming thanks to being popular vacation destinations, and recently becoming home to Hertz’ global headquarters. Prices are growing rapidly, and rents even faster.
Summary
Florida is home to many diverse real estate markets. All of Florida’s major markets should continue to march through the recovery in 2016. For those limited by budget there are more options than just Miami or Orlando. Both condos and homes should perform well, as rentals and for flipping as development continues to push prices higher. The weather, major business, international banking, and tax and liability shelter that Florida provides will continue to make it a popular destination for investment and retirement in good and bad economic times.