Florida on a roll
Once upon a time, states like Arizona, North Carolina, South Carolina and Texas were states that appealed to retirees and young people wanting a warmer climate and lower taxes, making everyone think that Florida’s day had passed. Well guess what, not only has Florida’s day not passed, according to Gov. Rick Scott, “Florida is on a roll.”
In December, Florida almost surpassed New York state in population making Florida the almost third most-populous state. According to the University of Florida, it wouldn’t be a surprise and indeed it’s expected that Florida will surpass New York in the near future something that probably would have happened already if not for the financial crisis.
Scott credits this continuing increase to a lot of new jobs that have been added over the years, thanks to lower taxes and reduced red tape for businesses wanting to operate in Florida. Most of the population increase was in Orlando, which grew at an annual rate of 4.7 percent as well as Miami-Dade and Hillsborough counties, growing just under 4 percent each.
And speaking of Miami, its real estate market has been booming with nearly all of the once vacant condo units created as a result of the housing bubble being sold. In addition there are 118 condo towers proposed in the Miami area with 35 already under construction. Much of this activity is being fueled by foreign investors, which initially won’t add to the state’s population, but when all the thousands of units are built out, Miami’s population will show the affects.
Nationally, there is a tilt toward multi-family apartment buildings and condominiums in the new construction market. Although single-family homes still dominate the marketplace, there is a definite surge in multi-family based on Commerce Department data related to the number of permits being applied for and issued.
In spite of all of or because of the increase in multi-family construction going on around the country, there has also been an increase in the size of new homes being built. During the housing boom, homes were downsized but that has changed with upscale buyers purchasing larger and larger homes.
Data released by the Census Bureau confirmed the trend and reported that the average size of a new home was a record 2,642 square feet in the second quarter of 2013 an increase from 2,561 square feet set in the first quarter of 2009 a 5.2 percent increase. And Naples, Fla., is one of the areas where the size of new homes has expanded the most.
Here’s an interesting side note that does tie into Florida’s new construction market. I was in Aruba earlier this month, which is dominated with American vacationers mostly from the Northeast, and was impressed with the amount of new construction on that little island. Mostly townhouse and condos catering to vacationers are being sold fully furnished with the ability to place them into a rental program. The complexes are large with first class amenities and prices starting around $300,000 and going well over a million.
In my strictly unscientific personal opinion, I believe that a lot of the activity in the real estate market is still being driven by the baby boomers. Many boomers are just starting to retire after having worked longer then they originally planned. They have regained the lost equity in their homes, and their investments are surging. They’re the ones with the money, and the builders are just following the money. So write Florida off at your own peril, we just keep rolling on.
