The current population of Florida is 21,993,000. With a growth rate of about 1.6%, the number is expected to rise significantly in 2021. Much of the population increase is a result of migration from overseas, as well as from within the US itself. There is especially a large influx of Hispanic immigrants from Cuba, Spain, and Latin America. Due to this, Spanish is now spoken by 20% of Florida residents. With this population growth, the real estate market forecast is that the demand for rental properties will be on the rise in 2021. This means landlords can charge higher rental rates for their properties.
Understandably, many buyers and sellers in the Florida real estate market hit the pause button earlier in the year due to coronavirus. However, the Sunshine State started showing signs of recovery in July. According to Florida Realtors, the year-over single-family unit home sales increased by 11.7% compared to July 2019. According to the Chief Economist Dr. Brad O’Connor, the main factors contributing to this surge is the pent-up demand from the failed spring buying season, as well as record-low mortgage rates. Since the interest rates are not expected to increase in the near future, the Florida housing market forecast is that demand will continue increasing well into 2021.
Despite the increased demand for property in the Florida real estate market, the mid-year housing inventory levels are very low. Chief Economist O’Connor says that inventory levels are down 27% compared to 2019.
Low inventory combined with rising demand means a rise in property prices. Data from the Florida Realtors Research Department showed that the median price for single-family properties was $277,500 in the second quarter, an increase of 4.7% from the previous year. The median price for a condo-townhouse home was $207,000, 6.2% higher than in 2019. This trend of increasing prices is likely to continue in 2021.
Is it a buyer’s or seller’s market in Florida? A low supply of homes means that sellers have the upper hand in any negotiation. Therefore, the Florida real estate market will remain a seller’s market well into 2021.
According to a recent study by the University of Central Florida, short term rental properties in Florida generated about $27 billion in 2018. Though the vacation rental industry was adversely affected by the coronavirus, things are now picking up. For example, vacation rentals in Northeast Florida got permission to reopen on May 19. Key Data Dashboard reports that the number of bookings doubled within 24 hours. The reopening of Florida’s coastline and attractions such as Disney World, Kennedy Space Center, Universal World, and The Ringling will keep demand for short-term rentals high in 2021.
When it comes to rules and regulations, Florida has some of the most Airbnb-friendly laws. The current law does not allow cities and counties to prohibit short-term rentals of residential properties. And Mashvisor recently reported that new legislation might put all Airbnb Florida income properties under state regulation. As of now, there are no major changes on the horizon for Airbnb Florida laws in 2021.
With the increased demand for vacation rental properties and the friendly Airbnb laws, real estate investors will continue enjoying a good Airbnb occupancy rate in 2021.
Source: Charles Mburugu, Mashvisor.com
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