2020 may still be a couple of months away, but every real estate investor knows the importance of following market trends. We’re going to take a look at some of the current real estate market trends and see what Florida housing market predictions they reveal for next year.
Florida Housing Market Predictions 2020
1) Tight Inventory Supports Signs of a Seller’s Market
This is a national trend- the number of active real estate listings just isn’t enough to match buyer demand. Despite effortsun of increasing inventory levels, most US cities are still struggling to have enough housing stock. This is apparent as house prices in July went up 5 percent which means affordability is also dropping. Properties priced below $200,000 are selling a lot faster than luxury homes (30 days faster). Although a hot real estate market is good because it means it’s active, the pressure on prices and the high demand could be signs of a possible housing market crash. But US housing market experts believe that, while a recession is bound to hit us sometime in the future, our strong economy and low interest rates are keeping us away from a national housing market bubble.
Focus on Florida
So what do these national trends say about Florida housing market predictions? Well, the Florida real estate market is looking very healthy. We’re seeing consistent growth in sales, prices, and real estate transactions. Still, inventory trends are following national trends. New listings of single-family homes went down 2.2 percent this year with 96,984 new units on the market. Condo listings dropped double that by 4.5 percent with only 39,618 units. New home listings are expected to continue dropping throughout 2020.
Although the number of Florida investment properties for sale isn’t rising, home sales still are. Single-family home sales in the Florida housing market had a YoY increase of 4.6 percent, with a total sales volume of 85,017. Condo sales increased from Q1 2019 to Q2 2019 with a total of 34,128 condos and townhomes sold. However, this is a 1.4 percent drop in volume from last year.
Although these Florida real estate market trends don’t signal a buyer’s market, it doesn’t mean you can’t invest in Florida real estate. Quite the contrary. Taking a look at some key return on investment trends shows us that you can make some lucrative investments in the Florida housing market 2020.
Related: Searching for Property in a Low-Inventory Real Estate Market: 6 Tips
2) The Florida Real Estate Market Forecast 2020 Is Looking Positive
The best way to form reliable Florida housing market predictions is to look at the numbers. We’ll give you Mashvisor’s stats on rental property performance in the Florida housing market, but remember that these are state-level numbers. Performance of a real estate investment can differ from city to city and even neighborhood to neighborhood. We’ll give you a list of the top-performing cities at the end of this blog, but for now, let’s take a look at the Florida housing market forecast 2020:
- Median Property Price: $432,690
- Price per Square Foot: $250
- Price to Rent Ratio: 20
- Average Days on Market: 125
- Monthly Traditional Rental Income: $1,816
- Traditional Cash on Cash Return: 1.4%
- Monthly Airbnb Rental Income: $2,763
- Airbnb Cash on Cash Return: 3.3%
- Airbnb Occupancy Rate: 55%
Future rental property performance in the state is looking good- all numbers point to a profitable real estate investment in 2020.
Related: What Is a Good Return on Investment for Real Estate?
Another important metric to consider when analyzing a market for investment is home value. According to Zillow, Florida home values went up 4.3% since last year. The Florida housing market predictions 2020 are that home values will continue increasing (projected to increase 2 percent within the next year).
Zillow Home Value Index for Florida
Mortgage rates also went against expert predictions and dropped in 2019, hitting 3.82 percent, a rate we haven’t seen in almost two years. These rates are predicted to not progress in 2020. All of this combined with the fact that it is one of the few states with no income tax makes buying a house in Florida for investment quite the favorable decision next year.
To get access to our real estate investment tools, click here to sign up for a 7-day free trial of Mashvisor today and enjoy 15% off for life.
3) Population Will Increase, Economy Will Get Stronger
Florida is the third fastest-growing state in the country, with its population increasing 1.63 percent this year and an overall 11 percent increase since 2010. The Florida housing market predictions 2020 are that the highest population growth will happen in Sweetwater, Groveland, Palm Springs, and Parkland. An important thing to note is the record high population that the South Florida real estate market witnessed- 6 million. You can only imagine how high the level of demand is for housing and rental property in South Florida.
The state is a big contributor to the US economy, creating 10 percent of the country’s new jobs. With housing and tourism being the driving industries of the Florida economy, it’s predicted to reach over $1 trillion in 2020. The strong economy signals even more positive Florida housing market predictions. Expect to continue seeing strong employment rates, a growing GDP, and more migration to the Sunshine State.
To wrap up our Florida housing market predictions 2020: The favorable tax conditions, great job market, and even the beautiful weather will all support a strong rental market in the next year. Why wouldn’t people want to invest in Florida real estate?
Related: Job Growth and Its Effects on the US Housing Market
Where to Invest in the Florida Housing Market 2020
We can’t talk Florida housing market predictions 2020 and not tell you which are the hot locations for real estate investment. Using Mashvisor’s investment property calculator, we’ve located some of the top-performing Florida cities for rental property investments. Note that we will only be listing our data on traditional long-term rentals. If you would like access to our short-term rental data on a Florida city as well as our Airbnb calculator, sign up for Mashvisor.
Now let’s take a look at the Florida housing market predictions for best cities in 2020:
Port Saint John, Brevard County
- Median Property Price: $268,180
- Price per Square Foot: $153
- Price to Rent Ratio: 9
- Average Days on Market: 134
- Monthly Traditional Rental Income: $2,361
- Traditional Cash on Cash Return: 10.8%
Captiva, Lee County
- Median Property Price: $1,240,422
- Price per Square Foot: $668
- Price to Rent Ratio: 12
- Average Days on Market: 260
- Monthly Traditional Rental Income: $8,876
- Traditional Cash on Cash Return: 8.3%
Cedar Key, Levy County
- Median Property Price: $293,463
- Price per Square Foot: $236
- Price to Rent Ratio: 9
- Average Days on Market: 82
- Monthly Traditional Rental Income: $2,671
- Traditional Cash on Cash Return: 6.0%
Holly Hill, Volusia County
- Median Property Price: $258,742
- Price per Square Foot: $155
- Price to Rent Ratio: 11
- Average Days on Market: 138
- Monthly Traditional Rental Income: $1,961
- Traditional Cash on Cash Return: 5.7%
Rotanda West, Charlotte County
- Median Property Price: $283,993
- Price per Square Foot: $148
- Price to Rent Ratio: 9
- Average Days on Market: 102
- Monthly Traditional Rental Income: $2,632
- Traditional Cash on Cash Return: 5.7%
Check out our Florida State Guide for more on investment property performance. If you want to take advantage of these Florida housing market predictions 2020, start your search for a property now. The best way to find the perfect investment property in the Florida housing market is to use our Property Finder. If you sign up for a free account, you can find lucrative investments that match your criteria in a matter of minutes.