"The Love Line"
By Ryan Love
How hot can it possibly get?
Not an uncommon question for those residing in
or visiting South Florida. However, this question
is becoming increasingly more in regards to the
South Florida Real Estate Market rather than our
Summer weather forecasts. With Home values in
South Florida increasing an average of 15-35%
each year over the past few years, one might think
that the end of skyrocketing values is near. But, when you look around, there are no signs of an imminent slowdown or correction. In this month's column, I will discuss the advantages that South Florida has to those who are thinking of investing in our fast-paced market.
South Florida has long been known for its tropical climate and miles of beautiful beaches. This combination was always a lure to older generations, but over the past decade not only have we have seen the continued migration of the older generations, but also the arrival of younger and middle-aged generations. This is especially true when it comes to the Baby Boomer Generation. A recent survey of Baby Boomers acrossed the country shows that well over 25% plan to either move or buy a second home in Florida over the next five years. When you combine this with the 2000 people of all generations who move to Florida every single day, it is easy to see that the demand for housing will be continuing for quite some time. Here in South Florida (Broward, Palm Beach, and Miami-Dade Counties), the growth is staggering. Broward County, which is home to cities such as Fort Lauderdale, Hollywood, Pompano Beach, and Wilton Manors, is already 98% developed. This means that in the entire county, there is currently only 2% of land available for development. A factor that plays a key role in this number is that the Florida Everglades, an area of federally-protected subtropical preserve located in Western Broward County, can not be developed. Therefore, with the continued influx of new residents to the Fort Lauderdale Metropolitan Area, resales of existing Homes and redevelopment of previously developed property will be the primary options to those looking to purchase. Acrossed South Florida, we are witnessing a lack of available inventory and a high demand of Buyers wanting to purchase, which creates a Sellers Market. The demand for Homes heavily outnumbers the supply of Homes, so the values continue to increase at a rapid rate. As long as the demand continues to outnumber the supply, it is likely that we will not see any major corrections or the dreaded 'real-estate bust' that everyone fears.
It is pretty well-known that living in South Florida has an alluring appeal to the vast majority of people within the United States. What many people do not realize is that alluring appeal is not just here within our boundaries, but it extends worldwide. We continue to see an increase in Foreign Buyers from a wide array of countries throughout Europe and South America. With the values of the Euro and British Pound being so strong, many Foreign Buyers are investing in the South Florida Market. With our warm climate year-round, we are an attractive option to Europeans in the Winter and to South Americans, South Africans, and Australians in the Summer.
South Florida also continues to be a major tourist destination both domestically and internationally. In 2004, Broward County alone had nearly 9.5 million visitors. As you may expect, with this many visitors each year there is a constant need in finding employees to help in various aspects of day-to-day operations for tourism-related businesses. Having a stable job market is a significant component to those who are considering a relocation and South Florida compares favorably to other parts of the country. While the federal unemployment rate is at 5.2%, the unemployment rate in Miami-Ft Lauderdale is at 4.6% and they added 62,900 jobs to the workforce in March of this year. These jobs are not all tourism-related either. Many corporations are moving their headquarters to South Florida which is helping to create a more diverse workforce throughout the entire region. In addition, Florida does not have a state income tax, making it even more inviting for those looking to relocate from states which do have an income tax.
Demand, domestic and international visibility, and a stable job market....three very important factors to consider when investing in a real estate market. South Florida ranks very highly in all three of these categories and this has helped to create a very lucrative real estate market. In the upcoming months, I will feature different types of investments like new construction, condo living, the rental market, and fixing-up single-family homes to sell at a higher value.
Ryan Love is a Realtor with Coldwell Banker in Fort Lauderdale, FL. He is a member of the National Association of Realtors, Florida Association of Realtors, and the Realtor Association of Greater Fort Lauderdale. His real estate columns can be seen here on a monthly basis. You can contact him directly through his website, www.FloridaMoves.com/Ryan.Love
