The complicated global situation, with the coronavirus pandemic in 2019–2021 and the military conflicts in 2022, has changed the tastes of property buyers. According to some surveys in the USA, people prefer to purchase more spacious residential properties such as detached houses with their own land plots. In addition, the warm climate and the opportunity to spend time in nature have become more valued by buyers. As a result, foreigners and Americans from other states are showing great interest in real estate in Florida. Housing prices in this sunny state have been rising rapidly over the past two years. Will this trend go on, and why does it make sense to invest in luxury properties in Florida right away? Here are six factors that make investing in luxury apartments and villas in Florida a solid investment decision.
Content:
- Economic growth and high rental demand
- Undervaluing the real estate market
- A high-liquid property
- A variety of offers
- A resort lifestyle and a tourist flow
- The most sought-after destinations for celebrities, and how to make transactions easier for foreigners
Economic growth and high rental demand
Florida’s economy is one of the fastest growing in the USA. In 2021, the CBNC Media Corporation ranked the state 17th in the best business states, while in 2022, Florida was ranked 11th in the same ranking rising by 6 points over the year. Attracted by low taxes, lower cost of living than in California and affordable real estate prices, more and more IT companies and other organizations are moving to the sunny state. In recent years, this place has been called the "new Silicon Valley". In 2021, Florida attracted more IT companies than any other American state. In 2023, the average age of a Florida resident is 38. State cities, such as Sarasota, Fort Myers and Daytona Beach, are among the top 10 best U.S. cities for work or retirement. Experts believe that entrepreneurs will keep moving to Florida. This means that the demand for comfortable housing in the state will grow. Investors who are acquiring beneficial properties will profitably resell them or start renting them out and receive passive income.
Undervaluing the real estate market
Before the coronavirus, it was common to laugh at Florida residents in the United States because the state was considered a place for pensioners and because it is located far from the major business American locations. Only the restrictions imposed by the pandemic in New York and some other major cities caught entrepreneurs who were about to move to these megacities by surprise. Although prices for villas and flats in Florida are rising, they are still much lower than in New York, California and Alaska. You can buy houses in Florida for an average price of $241,000. You will have to pay $272,000 for an average residence in Alaska. Meanwhile, the state is more conveniently located than Silicon Valley in terms of logistics: it is twice as close to fly to Miami and Orlando airports from Europe as to California. It is not surprising that from 2015 to 2023, the capitalization of the real estate market in Florida increased by 27%, which is called a record by industry experts. On average, housing prices are rising by 1.5% year by year. In 2023, experts expect the market to cool as bank interest on mortgage loans increases. However, prices will start to rise again by 2024. At the same time, experts predict an increase in the average offer price by 10–12% in the next five years for the elite segment of the market. In the meantime, investors can purchase houses and apartments in the sunny state at low prices.
Here are some examples of housing prices in Florida in 2023:
- a one-bedroom condominium of 70 m2 in Aventura costs $299,999;
- a three-bedroom house of 133 m2 in Oakland Park costs $485,000;
- the price for a two-bedroom townhouse of 76.9 m2 in Miami is $320,000;
- the cost of a three-bedroom condominium of 181 m2 in Doral is $850,000;
- a one-bedroom apartment of 95 m2 in Miami Beach costs $2.2 million.
A high-liquid property
It is easy to sell luxury real estate in the state. Demand surpasses supply in this segment. If an investor purchases off-plan properties for sale in Florida, they can sell it at a more expensive price to earn more money after putting the community into operation. Experts warn that the armed conflict in Europe has affected the global construction materials market and will reduce the supply in the real estate market. As the number of properties on the market is decreasing, their liquidity will grow.
A variety of offers
Another advantage of the peninsula's housing market is a wide range of offers. A dedicated investor will easily find a profitable residential unit, from rural houses on the outskirts of the state to luxurious mansions on the first line next to the white sandy beaches of Miami. Few standard offers are an additional advantage. Developers compete in creativity. Buying an apartment in development projects in Florida means to acquire a liquid and profitable asset. It is most profitable to make a good deal when the residential complex is under construction because the developer offers this housing at a lower price. Studying development projects in Florida, you can see that more and more projects are becoming premium.
A resort lifestyle and a tourist flow
In addition to low taxes in Florida, its nature and climate are other major advantages. No other state, apart from Hawaii, can boast such beautiful beaches and lots of sunny days in a year. There is no winter here. The climate is subtropical in the north and tropical in the south. It is difficult to overestimate the tourist potential of the peninsula. Over the past 10 years, more than 100 million tourists have visited the sunny state. In 2022, 137.6 million people came here to rest. Homeowners do not and will never have a shortage of those who want to rent it for both short and long term in places near the coast. Both low-cost and elite properties are in high demand among tourists.
The most sought-after destinations for celebrities, and how to make transactions easier for foreigners
Miami is one of the most sought-after places among celebrities. It appeals to Enrique Iglesias, Lenny Kravitz, Shakira, Matt Damon, Jennifer Lopez, Ricky Martin, Shaquille O'Neal, and many others. Moreover, famous entrepreneurs and top managers of the world's largest corporations reside here. A lot of people are attracted by the climate and comfortable business conditions. Besides, any foreigner can purchase real estate in the United States without restrictions.
