The South Florida real estate market is hot in 2022. Inventory remains low, home prices continue to rise, and the demand for housing stays high.
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South Florida is located at the southernmost portion of the Sunshine State. It has a population of over 6.7 million and is the 7th biggest metropolitan area in the United States. It is home to nearly 100 cities and towns, including the Miami metropolitan area, which is also very populous. South Florida is known for its tropical climate—one of the reasons why South Florida is a popular tourist destination.
Many real estate investors are wondering whether the South Florida real estate market will see a decline this year. For the past couple of years, home prices in South Florida have seen record-breaking growth. The increased demand for housing due to the number of people relocating to Florida made it more difficult for homebuyers to find a property within their budget.
The rising demand for South Florida homes and increased home prices open more business opportunities for rental property investors. This is because many residents who cannot find a house to buy are forced to rent instead. This explains why there is a strong demand for traditional rental properties in South Florida.
If you’re planning to invest in the South Florida rental market, there is a high probability that you’ll make a profitable investment. However, since inventory remains low, it will be challenging for investors to find an investment property to buy.
What Drives the South Florida Real Estate Market?
The South Florida real estate market shows impressive growth even while the world is in the midst of a global pandemic. Since home prices keep soaring and inventory is getting scarce, we can definitely say that South Florida real estate remains a seller’s market.
The demand for Miami real estate, in particular, continues to rise. This is due to an increase in population and partly because of low mortgage rates. Based on Mashvisor’s data as of March 2022, the median property price in Miami remains high at $953,470. We can expect this figure to continue to climb, especially with the declining number of listings.
Related: Airbnb Miami—Should You Invest in 2022?
You may be asking, why the South Florida housing market remains strong? What really drives the real estate market in South Florida?
The housing demand in Miami, which is part of the South Florida Real Estate Market, continues to increase in 2022.
Here are the top five drivers of South Florida real estate:
1. Business Relocations
Many businesses from high-tax urban cities like New York are relocating to South Florida. One of the reasons for this move is that Florida offers more favorable tax rates, which is a significant factor that encourages business owners to relocate. In Florida, you don’t need to pay for state personal, inheritance, or intangibles tax. Additionally, Florida has lower corporate and sales taxes compared to other states.
2. Migration of New Residents
It’s no secret that South Florida has one of the best climates in the country. Aside from good weather, it also offers a wide selection of great schools. Moreover, many companies allow their employees to work remotely because of the COVID-19 pandemic. This allows people to migrate to places with warmer weather and better living conditions. This is why new residents are now flocking to South Florida.
3. Low Mortgage Rates
Another significant driver of the South Florida real estate market is the continuously low mortgage rates. Many homebuyers are worrying that they will miss out on the still-low mortgage rates. This is why many people are joining the bandwagon and finding a house for sale in Florida. According to an article from Time.com, Florida is one of the top states with the lowest mortgage rates based on Bankrate data as of February 2022.
4. Venture Capital Growth
With significant growth in venture capital funding, South Florida is believed to be the up-and-coming startup hub. As of Q4 2021, many start-up companies in South Florida have raised over $1 billion in early-stage funding. This growth is a result of years-long hard work by notable founders, investors, and universities in the region. The growth in venture capital in South Florida has a huge, positive effect on its housing market.
5. Tourism
South Florida is one of the top tourist destinations in the United States because of its best weather conditions, beautiful beaches, and rich culture. Because of this, many out-of-state buyers are buying a vacation home in Florida. South Florida is also one of the best locations for vacation rental investors. The booming tourism industry in South Florida is another reason why the demand for Florida housing keeps growing.
Is It Good to Invest in South Florida Real Estate in 2022?
With the increasing demand for housing, many real estate investors ask if buying a property in South Florida is a good investment. You need to analyze the market trends and study the housing market predictions to know what the South Florida real estate market holds for real estate investors in 2022.
First, let’s take a look at the Florida real estate data from Mashvisor, as of March 2022:
- Number of Listings for Sale: 31,237
- Median Property Price: $875,883
- Average Price per Square Foot: $481
- Days on Market: 87
- Number of Traditional Listings: 91,397
- Monthly Traditional Rental Income: $2,718
- Traditional Cash on Cash Return: 1.91%
- Traditional Cap Rate: 1.96%
- Price-to-Rent Ratio: 27
- Number of Airbnb Listings: 47,514
- Monthly Airbnb Rental Income: $3,521
- Airbnb Cash on Cash Return: 2.73%
- Airbnb Cap Rate: 2.80%
- Airbnb Daily Rate: $213
- Airbnb Occupancy Rate: 58%
- Walk Score: 49
The above data covers the whole state of Florida. It shows that the median property price remains high at $875,883. The total for-sale inventory of 31,237 for the whole state is relatively low, given the current population of Florida which is estimated at 22 million.
Related: 20 Best Places to Invest in Real Estate in Florida in 2022
The present housing market situation in South Florida shows that the demand for housing will continue to grow. The increase in job opportunities, growing population, better weather conditions, and booming tourism make the South Florida real estate market a desirable location for investors. In general, South Florida is a good place for investing if you want stable cash flow, good return on investment, and long-term appreciation.
While many South Florida residents want to take advantage of the low mortgage rates, the low inventory and high home prices prevent them from finding a property that they could afford. This opens more opportunities for real estate investors who are looking to invest in traditional rentals. Based on the data above, the price-to-rent ratio in Florida remains high at 27. This means that property prices are too high in relation to rental rates. For this reason, many people would rather rent than buy a home they could not afford.
Moreover, because of its strong tourism industry, South Florida also offers profitable opportunities for Airbnb investors. Because it has a tropical climate, there is an influx of visitors in South Florida all year round. This translates to high demand for vacation rentals, making it a good location for short-term rental investments.
Are you are ready to invest in South Florida? Mashvisor can help.
Top 10 South Florida Cities for Traditional Rentals
Investing in the South Florida real estate market can be favorable for traditional rental investors, especially if you know which cities or neighborhoods to invest in. The best cities for traditional rentals are those that are close to businesses where job opportunities are rampant. You also have to consider the neighborhoods within the city. Make sure these neighborhoods are family-friendly, close to schools and other amenities, and are generally safe residential areas.
Aside from looking at the general vicinity of a particular city, it’s equally essential to understand the city’s real estate market analysis and trends. We use Mashvisor’s tools and in-depth real estate data to determine which South Florida markets are best for investing in traditional rentals.
Here are the top 10 South Florida cities for traditional rentals, based on traditional cap rate:
1. Lauderdale Lakes
- Number of Listings for Sale: 60
- Median Property Price: $155,543
- Days on Market: 45
- Number of Traditional Listings: 86
- Monthly Traditional Rental Income: $1,342
- Traditional Cash on Cash Return: 4.78%
- Traditional Cap Rate: 5.15%
- Price-to-Rent Ratio: 10
- Walk Score: 61
Lauderdale Lakes is a city in Broward County, FL with a population of over 35,000 as of 2020. It offers a community bus, which is a free service that travels east and west along Oakland Park Boulevard, as well as north and south on State Road 7. It is close to a number of public and private schools, as well as several businesses.
2. Lantana
- Number of Listings for Sale: 15
- Median Property Price: $322,460
- Days on Market: 65
- Number of Traditional Listings: 118
- Monthly Traditional Rental Income: $2,237
- Traditional Cash on Cash Return: 4.77%
- Traditional Cap Rate: 4.92%
- Price-to-Rent Ratio: 12
- Walk Score: 65
Lantana is a town in Palm Beach County and is home to more than 11,000 people. It features a number of parks, beaches, and recreation centers, as well as many varieties of tropical vegetation. At the moment, there are only a few houses for sale in Lantana Florida. If you’re planning to buy an investment property in this area, now is the best time to do so.
3. Sweetwater
- Number of Listings for Sale: 8
- Median Property Price: $344,863
- Days on Market: 106
- Number of Traditional Listings: 30
- Monthly Traditional Rental Income: $2,313
- Traditional Cash on Cash Return: 4.72%
- Traditional Cap Rate: 4.85%
- Price-to-Rent Ratio: 12
- Walk Score: 82
Sweetwater is a city in Miami-Dade County and is home to around 20,000 people. Sweetwater is known for its cultural diversity, beaches, and water recreation. The unemployment rate in Sweetwater is 8.2%, which is slightly high compared to the U.S. average of 6.0%. However, recent job growth is positive—this has contributed to the population growth in the city.
4. Tequesta
- Number of Listings for Sale: 11
- Median Property Price: $1,164,245
- Days on Market: 25
- Number of Traditional Listings: 57
- Monthly Traditional Rental Income: $6,440
- Traditional Cash on Cash Return: 4.21%
- Traditional Cap Rate: 4.28%
- Price-to-Rent Ratio: 15
- Walk Score: 1
Tequesta is located in Palm Beach County, with a population of over 6,000. It is one of the most expensive cities in South Florida, with a median property price of over $1 million. Despite the elevated property prices in Tequesta, the demand for housing remains high.
5. Lighthouse Point
- Number of Listings for Sale: 16
- Median Property Price: $792,949
- Days on Market: 102
- Number of Traditional Listings: 148
- Monthly Traditional Rental Income: $3,288
- Traditional Cash on Cash Return: 4.07%
- Traditional Cap Rate: 4.24%
- Price-to-Rent Ratio: 20
- Walk Score: 56
Lighthouse Point is located in Broward County and has a population of over 10,000. The current median property price is high at $792,949. It also has a high price-to-rent ratio, which means that most residents are renting a house. Buying a Lighthouse Point investment property for a long-term rental will make a good investment.
6. Florida City
- Number of Listings for Sale: 9
- Median Property Price: $322,778
- Days on Market: 38
- Number of Traditional Listings: 23
- Monthly Traditional Rental Income: $1,928
- Traditional Cash on Cash Return: 3.95%
- Traditional Cap Rate: 4.06%
- Price-to-Rent Ratio: 14
- Walk Score: 67
Florida City is a city located in Miami-Dade County and is home to more than 13,000 people. It is the southernmost city in the South Florida metropolitan area. With only nine available houses for sale in Florida City Florida, we can expect the demand for traditional rentals to continue to rise.
7. Lauderhill
- Number of Listings for Sale: 124
- Median Property Price: $163,435
- Days on Market: 74
- Number of Traditional Listings: 309
- Monthly Traditional Rental Income: $1,401
- Traditional Cash on Cash Return: 3.71%
- Traditional Cap Rate: 3.95%
- Price-to-Rent Ratio: 10
- Walk Score: 39
Lauderhill is a city in Broward County and has a population of around 74,000. Lauderhill jobs have increased by 1.9%, which opens more opportunities for its residents and other people who relocated to South Florida. This is also a good reason for traditional rental investors to consider investing in Lauderhill.
8. Margate
- Number of Listings for Sale: 39
- Median Property Price: $310,236
- Days on Market: 56
- Number of Traditional Listings: 210
- Monthly Traditional Rental Income: $1,877
- Traditional Cash on Cash Return: 3.72%
- Traditional Cap Rate: 3.86%
- Price-to-Rent Ratio: 14
- Walk Score: 69
Margate is a city in Broward County and has a population of over 58,000. Margate offers several job opportunities, which is a reason why it’s also a good place to invest in traditional rentals.
9. Riviera Beach
- Number of Listings for Sale: 29
- Median Property Price: $658,171
- Days on Market: 47
- Number of Traditional Listings: 331
- Monthly Traditional Rental Income: $2,802
- Traditional Cash on Cash Return: 3.69%
- Traditional Cap Rate: 3.79%
- Price-to-Rent Ratio: 20
- Walk Score: 43
Riviera Beach is a city in Palm Beach County and is home to around 34,000 people. This is also one of the South Florida cities with high home prices. As of March 2022, the median property price is $658,171. With a high price-to-rent ratio, we can expect an increased demand for long-term rentals in Riviera Beach.
10. Sunrise
- Number of Listings for Sale: 109
- Median Property Price: $302,381
- Days on Market: 57
- Number of Traditional Listings: 456
- Monthly Traditional Rental Income: $1,772
- Traditional Cash on Cash Return: 3.59%
- Traditional Cap Rate: 3.79%
- Price-to-Rent Ratio: 14
- Walk Score: 68
Sunrise, Florida is a city located in central-western Broward County and is home to over 97,000 people. The Sunrise real estate market offers great potential for profitable traditional rental investments because of its increasing population.
Top 10 South Florida Cities for Airbnb Rentals
Another reason why the South Florida real estate market remains strong is that it has a thriving tourism industry. Visitors flock to South Florida because of its optimal weather conditions, sunny beachfront parks, historical museums, scenic attractions, botanic gardens, and so much more. Buying a vacation rental property in South Florida will make a profitable investment, especially if you invest in the right location.
Related: Where Should You Invest in Airbnb Rentals in Florida?
The best cities for Airbnb rentals are those that are near most tourist attractions. It’s also important to choose a location that is close to basic amenities and public transportation and has a high walk score. Using Mashvisor’s tools and analytics data, we list the best South Florida markets for short-term rentals.
Here are the top 10 South Florida cities for Airbnb rentals, based on Airbnb cap rate:
1. Deerfield Beach
- Number of Listings for Sale: 88
- Median Property Price: $363,508
- Number of Airbnb Listings: 230
- Monthly Airbnb Rental Income: $3,276
- Airbnb Cash on Cash Return: 5.44%
- Airbnb Cap Rate: 5.68%
- Airbnb Daily Rate: $207
- Airbnb Occupancy Rate: 59%
- Walk Score: 78
Deerfield Beach is one of the most family-friendly holiday destinations. It is a good place to rent a kayak and check out the mangrove forest. As this city is frequented by visitors, Deerfield Beach investment properties are great for short-term rentals.
2. Coral Springs
- Number of Listings for Sale: 81
- Median Property Price: $495,142
- Number of Airbnb Listings: 33
- Monthly Airbnb Rental Income: $4,562
- Airbnb Cash on Cash Return: 5.42%
- Airbnb Cap Rate: 5.54%
- Airbnb Daily Rate: $300
- Airbnb Occupancy Rate: 55%
- Walk Score: 42
Coral Springs is a family-friendly city in Broward County. It features a number of wilderness preserves, an art museum, and several nature parks that many visitors would not want to miss.
3. Oakland Park, FL
- Number of Listings for Sale: 58
- Median Property Price: $602,451
- Number of Airbnb Listings: 610
- Monthly Airbnb Rental Income: $5,149
- Airbnb Cash on Cash Return: 5.34%
- Airbnb Cap Rate: 5.44%
- Airbnb Daily Rate: $242
- Airbnb Occupancy Rate: 59%
- Walk Score: 46
Oakland Park is a city in Broward County, which is around five miles from Pompano Beach and around four miles from Fort Lauderdale. Oakland Park is strategically positioned near many of Florida’s most popular tourist destinations, making it a perfect location for Airbnb rentals.
4. Homestead
- Number of Listings for Sale: 205
- Median Property Price: $497,715
- Number of Airbnb Listings: 87
- Monthly Airbnb Rental Income: $3,887
- Airbnb Cash on Cash Return: 5.26%
- Airbnb Cap Rate: 5.38%
- Airbnb Daily Rate: $177
- Airbnb Occupancy Rate: 59%
- Walk Score: 88
Homestead is a city within Miami-Dade County and is home to various museums and delectable dining. Homestead is where the famous Everglades Alligator Farm is located. It offers a small-town atmosphere, which visitors from big cities love to experience.
5. Miami Gardens
- Number of Listings for Sale: 61
- Median Property Price: $350,841
- Number of Airbnb Listings: 213
- Monthly Airbnb Rental Income: $3,279
- Airbnb Cash on Cash Return: 5.20%
- Airbnb Cap Rate: 5.33%
- Airbnb Daily Rate: $238
- Airbnb Occupancy Rate: 54%
- Walk Score: 35
Buying a Miami Gardens investment property for Airbnb rentals is also a good idea. Miami Gardens is famous for its parks and is also home to the Miami Dolphins, a professional football team based in Florida.
6. Delray Beach
- Number of Listings for Sale: 244
- Median Property Price: $517,215
- Number of Airbnb Listings: 291
- Monthly Airbnb Rental Income: $3,339
- Airbnb Cash on Cash Return: 4.73%
- Airbnb Cap Rate: 4.92%
- Airbnb Daily Rate: $208
- Airbnb Occupancy Rate: 57%
- Walk Score: 87
Delray Beach is known as “Florida’s Village By the Sea”. It is famous for its lively main street, warm beach weather, and arts and culture. This is one of the top destinations of many Florida visitors, making it a good location for Airbnb investment.
7. Davie
- Number of Listings for Sale: 74
- Median Property Price: $480,946
- Number of Airbnb Listings: 44
- Monthly Airbnb Rental Income: $4,292
- Airbnb Cash on Cash Return: 4.78%
- Airbnb Cap Rate: 4.88%
- Airbnb Daily Rate: $332
- Airbnb Occupancy Rate: 50%
- Walk Score: 46
Davie, FL is located in Broward County and is another top tourist destination. It is a good place for Airbnb rentals because it is close to a variety of nature parks, museums, and historical architecture.
8. Hialeah
- Number of Listings for Sale: 176
- Median Property Price: $359,552
- Number of Airbnb Listings: 105
- Monthly Airbnb Rental Income: $3,285
- Airbnb Cash on Cash Return: 4.70%
- Airbnb Cap Rate: 4.82%
- Airbnb Daily Rate: $185
- Airbnb Occupancy Rate: 58%
- Walk Score: 73
Hialeah is a city in Miami-Dade County and is home to Hialeah Park Racetrack, a well-known historic site. Hialeah is a good location for Airbnb rentals because it’s close to several tourist sites like parks and art districts.
9. Pembroke Pines
- Number of Listings for Sale: 157
- Median Property Price: $388,648
- Number of Airbnb Listings: 99
- Monthly Airbnb Rental Income: $3,143
- Airbnb Cash on Cash Return: 3.88%
- Airbnb Cap Rate: 3.98%
- Airbnb Daily Rate: $179
- Airbnb Occupancy Rate: 50%
- Walk Score: 72
The Pembroke Pines real estate is a good market for short-term rentals. It is a city in southern Broward County, which is famous for its nature parks, shopping districts, and outdoor adventure activities like flying lessons and paddleboarding.
10. Plantation
- Number of Listings for Sale: 48
- Median Property Price: $513,929
- Number of Airbnb Listings: 121
- Monthly Airbnb Rental Income: $3,748
- Airbnb Cash on Cash Return: 3.67%
- Airbnb Cap Rate: 3.75%
- Airbnb Daily Rate: $274
- Airbnb Occupancy Rate: 59%
- Walk Score: 16
Plantation, FL is also a great location for Airbnb rentals because of its famous tourist sites such as the Plantation Heritage Park and Plantation Historical Museum. This is also a top destination for nature and art lovers.
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