Florida Real Estate Market 2022 Outlook

The Florida real estate market performed exceptionally well in 2021. But can it do a repeat performance this year?

Table of Contents

A Closer Look at the 2022 Florida Real Estate Market
Top Florida Real Estate Market Locations to Invest in 2022
The Bottom Line

What does the real estate market in Florida look like in 2022? Let’s check out what the Sunshine State has in store for real estate investors this year.

Find out about the different factors that are expected to drive Florida’s real estate market this year.

A Closer Look at the 2022 Florida Real Estate Market

Following the national real estate industry’s recovery from the 2008 market crash, Florida remained one of the hottest states in the US for real estate investments. All was well even into pre-pandemic Q1 2020 when it ranked 12th in the house pricing index. However, COVID disrupted not just the Florida market’s momentum but practically the entire US real estate industry. Q2 2020 data from Florida realtor groups showed how the real estate market Florida single-family home sales dropped by 19.2% from a year earlier.

As local economies started to gradually and incrementally reopen in late 2020, the real estate industry in the Sunshine State started picking up and recovered some of its lost pre-COVID momenta. The Florida Realtors housing market data for 2021 reports that closed sales on single-family units went up to 350,516 from the previous year’s 310,378. Considering we’re still in a pandemic, the figure is a pretty good 12.9% year-over-year increase. While that’s some pretty excellent housing market news, will this upward trend continue throughout 2022?

Florida Real Estate Market Forecast 2022

We at Mashvisor think it’s great that 2021 saw the Florida real estate market recover from the adverse effects of COVID but going into 2022, is investing in Florida still a smart thing to do?

How Is the Real Estate Market in Florida?

To answer the question, we need to take a look at several factors that directly affect the Florida real estate market as a whole.

Population Growth. Since 2010, the population’s grown by 2.7 million new residents, bringing the number up to 21.5 million people living in the state. The 14.6% population growth makes Florida the third-largest US state by population. The state is anticipating welcoming 845 new residents daily all the way through April 2025, giving it a 1.39% compound growth rate per year.

Job Market and Economy. One of the main reasons why the Florida population is growing significantly is because it is being marketed as an ideal business location. The state’s business-friendly environment attracts high-paying job opportunities for workers, increasing the in-migration rate. With a GDP growth of over 48% to over $1.1 trillion over the past decade, the state is anticipating the creation of even more jobs in 2022.

In September 2021 alone, there were 84,500 new jobs created in the state, bringing Florida’s unemployment rate down to 4.6%. The good thing about it is job opportunities are evenly spread throughout the entire state. It means that investors can literally look for Florida houses for sale anywhere in the state and still expect some profit because of the housing demand.

Growing Renter’s Market. Jumping off from the previous two points, Florida continues to attract thousands of in-migrants, causing an increase in housing demand. At one point in 2021, several Florida markets saw a 24% increase in a matter of weeks.

To get a better idea of the growing housing demand in the state, consider Miami, Tampa, and Orlando. According to Mashvisor, the three metro areas recorded average monthly rental prices of $3,477, $2,462, and $1,906, respectively, for a three-bedroom home. One of the said cities would probably be the best place to buy rental property in Florida if you’re considering going with a traditional long-term rental investment strategy.

Florida data also shows that while there is a rising demand for rental properties due to people relocating to the state, only 34% of housing units are being rented out. It means that there is a lot of room for growth in the traditional rental market.

Let’s not forget about vacation rentals. Florida remains one of the top tourist destinations in the US, with over a hundred million visitors annually. Although the pandemic caused a decline in tourist numbers in the Sunshine State, 2021 was still a pretty strong year as it hosted 122.1 million visitors. With the easing of travel restrictions, the number of tourists is expected to be higher in 2022, which also leads to the likelihood of a spike in Airbnb demand.

Housing Affordability. FreddieMac publishes its House Price Index monthly, which indicates house appreciation and the percentage of change in prices. According to the HPI, Florida house prices have increased by 156% since October 2000. The last five years have seen house prices in the Sunshine State go up by almost 66%.

Real estate professionals make side-by-side-by-side comparisons of median housing prices, median family incomes, and mortgage rates to determine housing affordability in Florida. According to US News and World Report, Florida ranked 31st in housing affordability. It means that among all the 50 states, Florida is one of the more expensive housing markets in the country today.

Quality of Life. Lastly, the housing market in the Sunshine State keeps getting hotter and hotter by the day because of the quality of life it offers its residents. People choose to live and work in sunny Florida because of the healthy work-life balance it affords workers. In addition, living in a place with excellent subtropical weather all year long, a robust economy, lots of job opportunities, an outstanding educational system, numerous outlets for recreation and culture appreciation is as close to living out the American dream for most people. Additionally, Florida is one of only eight states with no state-level personal income tax.

Mashvisor’s Florida Real Estate Market Data

At Mashvisor, we keep track of numerous real estate markets across the country, including the ones in Florida. Our website is trusted by thousands of real estate investors because of the quality of data we provide. We gather our data from highly reliable and reputable sources to provide investors with the most accurate and up-to-date market information for investment properties.

We do our best to regularly update our massive database so investors can perform the most accurate data analytics as part of their due diligence. Our data’s helped thousands of investors find investment properties that fit their investment goals and criteria.

Mashvisor helps real estate investors find the best property based on their preferences and analyze them using the relevant metrics.

That being said, we’ve listed below the most recent updates on the Florida real estate market based on the data we gathered from over six million investment properties, two million-plus traditional rental properties, and another two million-plus short-term rental properties based on Airbnb comps:

Median Property Price: $875,883
Average Price per Square Foot: $481
Traditional Rental Income: $2,718
Traditional Cash on Cash Return: 1.91%
Traditional Cap Rate: 1.96%
Price to Rent Ratio: 27
Airbnb Monthly Rental Income: $3,521
Airbnb Cash on Cash Return: 2.73%
Airbnb Cap Rate: 2.80%
Airbnb Daily Rate: $213
Airbnb Occupancy Rate: 58%

Two Important Things Real Estate Investors Need to Know

First, profitability can be measured in different ways, but the most efficient metric to use is cash on cash return. Understanding the difference between cash on cash return and cap rate plays an important role in how an investor conducts a feasibility study.

While a cap rate can be used to determine the return on investment, cash on cash return takes into consideration the property’s acquisition or financing method. After all, not everyone brings deep pockets with them to their investing journey. A lot of investors need to resort to financing options to purchase an investment property.

The typical cash on cash return formula takes the property’s projected annual net operating income and divides it by the total amount of cash used to buy the property. A cap rate does not factor in the financing method. By going with cash on cash return, investors get a pretty good idea of how much profit they can receive with every dollar they invest.

Second, price to rent ratio helps investors determine whether it’s better to buy a house or rent one in a particular location. It, in turn, lets investors strategize accordingly. In such a case, you’re looking for an investment property in Florida. By knowing the price to rent ratio of a certain location, you can identify the different real estate investment strategies that will work well for you. Fix and flips may work better in locations where buying a house is more practical for people than renting one. Then, there are markets where rental property strategies are much more profitable compared to house flipping.

A low price to rent ratio of 14 and below means that it’s better for people to just buy a property than rent one. A medium score of 15 to 19 suggests that the market shows balance between house rentals and property purchases. A high score of 20 and above implies that it’s better for people to just rent a house than buy one.

With the above figures in mind, investors can either choose another location that will help them achieve their investment goals or compromise and come up with the right strategy that will still allow them to make a good profit.

To start looking for and analyzing the best investment properties in your city and neighborhood of choice, click here.

Top Florida Real Estate Market Locations to Invest in 2022

Serious real estate investors who wish to take advantage of Florida’s red-hot housing market ought to keep a close eye on the following ten locations, especially if they’re looking for rental properties to invest in. We’ve also provided the accompanying data so that investors can see if the math checks out by using a rental property calculator.

5 Best Locations in Florida for Traditional Rental Properties

Based on Mashvisor’s latest data, here are the top five locations in the Florida real estate market for traditional rental properties:

1. Lantana, FL

Median Property Price: $322,460
Average Price per Square Foot: $333
Traditional Listings: 118
Traditional Monthly Rental Income: $2,237
Traditional Cash on Cash Return: 4.77%
Price to Rent Ratio: 12 (low)
Days on Market: 65
Walk Score: 65

2. Lighthouse Point, FL

Median Property Price: $792,949
Average Price per Square Foot: $386
Traditional Listings: 148
Traditional Monthly Rental Income: $3,288
Traditional Cash on Cash Return: 4.07%
Price to Rent Ratio: 20 (high)
Days on Market: 102
Walk Score: 56

3. Palm Springs, FL

Median Property Price: $274,639
Average Price per Square Foot: $212
Traditional Listings: 124
Traditional Monthly Rental Income: $1,661
Traditional Cash on Cash Return: 4.01%
Price to Rent Ratio: 14 (low)
Days on Market: 41
Walk Score: 29

4. Royal Palm Beach, FL

Median Property Price: $405,182
Average Price per Square Foot: $246
Traditional Listings: 152
Traditional Monthly Rental Income: $2,174
Traditional Cash on Cash Return: 3.84%
Price to Rent Ratio: 16 (medium)
Days on Market: 24
Walk Score: 56

5. Venice, FL

Median Property Price: $526,335
Average Price per Square Foot: $348
Traditional Listings: 221
Traditional Monthly Rental Income: $2,331
Traditional Cash on Cash Return: 3.83%
Price to Rent Ratio: 19 (medium)
Days on Market: 47
Walk Score: 22

5 Best Locations in Florida for Short-Term Rental Properties

According to Mashvisor’s most recent data, the following five locations are ideal for short-term vacation rental property investments:

1. Palm Coast, FL

Median Property Price: $515,228
Average Price per Square Foot: $246
Airbnb Listings: 222
Airbnb Monthly Rental Income: $4,100
Airbnb Cash on Cash Return: 5.89%
Airbnb Daily Rate: $209
Airbnb Occupancy Rate: 68%
Days on Market: 76
Walk Score: 7

2. Deerfield Beach, FL

Median Property Price: $363,508
Average Price per Square Foot: $273
Airbnb Listings: 230
Airbnb Monthly Rental Income: $3,276
Airbnb Cash on Cash Return: 5.44%
Airbnb Daily Rate: $207
Airbnb Occupancy Rate: 59%
Days on Market: 37
Walk Score: 78

3. Port St. Lucie, FL

Median Property Price: $458,815
Average Price per Square Foot: $225
Airbnb Listings: 192
Airbnb Monthly Rental Income: $3,779
Airbnb Cash on Cash Return: 5.36%
Airbnb Daily Rate: $152
Airbnb Occupancy Rate: 67%
Days on Market: 152
Walk Score: 57

4. Oakland Park, FL

Median Property Price: $602,451
Average Price per Square Foot: $382
Airbnb Listings: 610
Airbnb Monthly Rental Income: $5,149
Airbnb Cash on Cash Return: 5.34%
Airbnb Daily Rate: $242
Airbnb Occupancy Rate: 59%
Days on Market: 46
Walk Score: 46

5. Homosassa, FL

Median Property Price: $352,452
Average Price per Square Foot: $195
Airbnb Listings: 123
Airbnb Monthly Rental Income: $2,914
Airbnb Cash on Cash Return: 5.28%
Airbnb Daily Rate: $203
Airbnb Occupancy Rate: 47%
Days on Market: 63
Walk Score: 39

Find Profitable Florida Investment Properties

The Bottom Line

With Florida’s 2021 momentum spilling over into 2022, real estate investors should give investing in the Florida real estate market some serious consideration. With the right investment strategies in the right location(s), investors could end up owning a gold mine of a property.

But just because the Sunshine State is a top industry performer doesn’t mean that you can afford to throw caution to the wind. As an investor, you still need to perform your due diligence to ensure you make the wisest and most informed investment decision. With the help of Mashvisor, you can increase your chances of success at real estate investing.

To get access to our real estate investment tools, click here to sign up for a 7-day free trial of Mashvisor today, followed by 15% off for life.

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