One of Florida’s defining features of the past several years has been its ability to consistently outperform the national average in terms of jobs and economic growth. This growth is driven in large part by population increases that remain more or less steady year after year, which surprisingly hasn’t been driving the unemployment rate up.
Florida adds about 1,000 net new residents every single day – think about that – and by 2020, we’re forecast to be at 22 million residents. That’s a 6.4% increase from US Census Data at the end of 2016.
Jobs, despite the feedback-loop relationship they have with population growth, are still frequently cited as the main reason people continue to move to Florida.
Florida’s job-growth percentage has consistently outpaced the national average, maintaining a more or less steady 3% growth rate. This is right in line with Florida’s population growth rate, which means the state is and is expected to continue to be an economic powerhouse. Most new jobs are in the expanding fields of healthcare, logistics and home construction markets, but the traditional drivers of tourist economies like retail and hospitality are a large factor as well.
The unemployment rate for 2017 was just over 4.5% and, despite needing revision upwards due to the hurricanes this year, that’s still a few points below the national average. It’s expected to decrease this year as new jobs keep pace with population growth.
All of these factors play into forecasts and assessments of the real estate market, but as a realtor I pay close attention to the housing and construction sectors. Construction job growth was at 4.5% for 2017 and will jump to 5.3% in 2018 to support an increase in housing starts.
This is, in my view, partially due to fewer vacant homes (foreclosures or otherwise) leftover from the housing crash nearly a decade ago. The number of vacant foreclosures in the state is now less than 2,500. But as population grows, so does demand for housing. Whether new residents rent or buy is immaterial; they still need roofs over their heads, which have to come from somewhere.
If you’ve been paying attention for the last few years, nationwide we’ve been short on inventories, and that’s been true for Florida as well. This has contributed to ever-increasing prices and lower affordability, but because of affordability hitting a floor of sorts, price increases are probably going to experience a slowdown this year.
What that means is, as construction shows no sign of slowing down, that buyers may have a brief respite from the cut-throat sellers’ market and heavy competition they’ve experienced for the past few years.
In other words, if you’re looking to upgrade to a larger home, purchase your first house, or pack up and move to Florida, 2018 is probably going to be your year. With the Fed expected to increase interest rates again this year, the cost of borrowing may cancel out any price advantages that are to be had within 9 to 12 months.
Basically, get in while the getting is good. If you’re thinking of moving to Florida, or especially New Smyrna Beach, come on and join the rest of us. The water’s great!