[fa icon="calendar"] 01.04.2017 / by Rory Williams
As 2016 has come to an end, it is time for all of us real estate professionals to begin looking at the year ahead. Are we in a housing bubble? How will exchange rates affect foreign investments in Florida real estate?
Check out these five Florida real estate trends for 2017 to find out how you can prepare for the new year:
1. Housing Prices Will Rise
Even with housing prices rising faster than wages, we still are not headed toward a bubble. Prices are expected to continue rising but Florida is still an average market in historic terms. So what does this mean for investors? This is a good time to buy if you are looking for a long-term purchase, but if you are looking for a short-term investment, be cautious.
2. International Buyers Will Begin Looking Toward Multi-Family
As the U.S. dollar grows stronger and stronger, luxury condo sales will continue to slow and developers will start looking for U.S. buyers rather than international ones.
However, foreign economies are still going strong and international buyers will begin looking for other investments, particularly multi-family apartments and single-family rental homes.
3. Multi-Family Will Continue to Grow
In addition to more investments coming from international buyers, developers have been seen leaving bigger markets like San Diego and New York and coming to places like Orlando and Miami that have strong absorption. These cities are still a good bet, demographically, and apartments have high occupancy rates. However, as rent continues to rise, we should expect to see a turning point in the future.
Florida is still a strong market and we haven’t seen rent concessions yet. Investors should be on the lookout, though, as it could come in the next year or so.
4. Construction Costs Will Increase
The construction industry took a major hit during the Global Financial Crisis and, as a result, lost a lot of workers who have not been quick to return. A shortage of workers means that many construction timelines are being pushed back and raising the total cost of the project. Developers will need to figure out a solution to this problem in 2017.
5. More People Will Continue to Rent Instead of Buy
A big portion of the young millennial crowd is still paying back student loans which makes it difficult to purchase a home. This means that a large part of that demographic is choosing to rent instead of own - and this applies to both multi-family and single-family homes.
Although there is a fallout to the market right now, there is not likely to be a housing recession in the near future. All the delayed housing formations have created a lot of pent up demand that is expected to increase in the next few years.
From an increase of foreign investment in multifamily and commercial real estate to a shift from buying to renting, the biggest prediction for 2017 Florida real estate trends is a continued slow-down of the Florida housing market. However, there are still plenty of opportunities for investors in other markets if you know where to look.