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It’s not news that Florida, one of the fastest growing states in the US, is experiencing a housing shortage. The already low inventory of residential homes could get worse if builders are unable to cope with the growing population. A recent study by the Florida Apartment Association (FAA) reveals worrying indicators in the housing aspect, but which also mean an ocean of opportunities for investors, who see in this imbalance a strong potential for property appreciation.
In this context, the FAA created a new website, BuildFlorida2030.com, which features a panel with several indicators, with the aim of helping residents and local authorities in the search for solutions.
We have commented several times on this blog about the current imbalance between demand and supply, especially in the residential housing segment in Florida. It is estimated that, by 2026, Florida will receive, on average, 849 new residents per day. The state has already received more than 1000 new residents in 2021.
In the decade of 2010 – 2020 the “Sunshine State” grew by 15%, which is equivalent to almost 3 million new inhabitants. By 2030, according to FAA studies, Florida’s population is expected to grow by more than 3 million.
Considering the current inventory of housing units and assuming that the study’s projections will come to pass, Florida will then need more than 500,000 new housing units to cope with this growth.
Florida’s Population Boom
Florida was already a region that was growing at an accelerated rate, even before the pandemic. With the consolidation of remote work, many Americans from other states saw the opportunity to fulfill their housing dreams by migrating to Florida and working remotely.
After all, who doesn’t want to enjoy the pleasant climate of Florida, its tropicalism, beautiful beaches and the receptive atmosphere of the “Sunshine State”.
Large companies also took advantage of the movement and migrated part of their divisions, taking advantage of Florida’s low taxes and a more business-friendly environment. Each corporation that moves its headquarters to Florida brings thousands of employees and their families.
Builders unable to meet demand
The huge demand for new homes could be a boon for Florida home builders trying to keep up with the huge demand for homes. However, there is no longer so much free land for new projects.
In addition, the production chain has not yet stabilized after all the global disorganization of recent years. Not only is there a lack of building materials, but also qualified labor to expand new projects.
To further aggravate an already critical situation, new projects can take up to 6 years to be delivered, from approval by local authorities, to construction and delivery of keys.
Opportunity for Investors
Faced with a scenario that is still unbalanced, expectations are for real estate prices to rise, which means a high potential for appreciation for investors.
Florida, as well as the American real estate market as a whole, has shown a slowdown in recent months, due to the increase in interest rates practiced by the American Central Bank (FED). Interest rates, however, rose to contain an inflationary period. Once inflation is under control, the upward bias in US interest rates will cease. At this time, the real estate market will be stimulated again.
So now is a good time to buy real estate in Florida. Taking advantage of the slight slowdown and entering the market could be a promising strategy for anyone thinking of investing in Florida.
About AMG International Realty
AMG International Realty is a global real estate company specialized in Florida. If you want to know more about real estate opportunities in the region, get in touch right now and chat with me via WhatsApp: +1 305 318 6968 (Heloisa Arazi).