September figures for property in Florida show a steadily-growing market with some of the best all-round investment potential in the US, both for rental returns and capital growth. Stability and consistent growth now characterise the Florida property market, two qualities that feature on any investment potential lists.
Statistics for Florida in September showed impressive growth, both in sales and median sales prices. The median prices for single family homes reached US$180,000 state-wide, representing a 5.9 per cent increase on prices a year ago. Prices for condos and townhouses experienced an even sharper rise with the September median sales price standing at US$142,000, 9.8 per cent higher than September 2013.
“The stability that has characterized the housing market in Florida continued in September, but at a higher level of activity,” said Florida Realtor Chief Economist John Tuccillo, commenting on the rise in prices and sales. Tuccillo added that the lower end of the market is experiencing most pressure because of the lack of available property.
Along with the buoyant employment market and booming tourism in Florida, this shortage of inventory adds to the rental potential for properties in the area. In the latest nationwide rental property report, Florida destinations such as Tampa, Jacksonville and Orlando offer exceptional rental returns.
The All Property Management Quarter 2 Rental Ranking Scores looks at over 100 locations in the US and compares their rental potential. In the southeast, Tampa ranks at the top of area ratings and also takes fourth position nationally. This high ranking is based on the tandem of exceptionally good rental return and high capital growth potential. Owners of rental properties in Tampa can expect to achieve 10.13 per cent rental return (Tampa is one of the few locations nationwide to reach double figures) and 7.3 per cent capital growth annually.
Other Florida locations featuring among the best places to buy-to-let in the US include Jacksonville, in fourth position in the southeast and ranked eighteenth in the country as a whole. In this big Florida city, rental returns are estimated to be 9.71 per cent and property appreciation 5.3 per cent on an annual basis. America’s most-visited tourist destination, Orlando, also does exceptionally well as a buy-to-let spot – here, investors can expect 9.89 per cent rental return annually with 3.2 per cent growth on their property.
In general, Florida is more than fulfilling investor expectations this year. Included as the eighth in the top ten places to invest in 2014 by Forbes, Florida also dominates the top ten rankings in the Local Market Monitor. Three Florida destinations feature in the best five – Daytona Beach, Orlando and Fort Myers (second, fourth and fifth respectively) – with Fort Lauderdale and Tampa in eighth and ninth positions.
The Local Market Monitor bases its ratings on the so-called equilibrium home price, calculated as an average price in a steady and stable market with no destabilising elements such as speculation or market crashes (both characteristics of the Florida market between 2008 and 2011). Florida’s equilibrium house price for a single family home is estimated to be US$209,047 – a considerable distance from September’s figure of US$180,000.
Based on this figure, Local Market Monitor predicts 35 per cent growth for the Florida market over the next three years proving there’s still plenty of room for impressive capital growth in the market.
"We think Florida is one of most interesting states in terms of rental property opportunities," said Ingo Winzer, president and founder of Local Market Monitor, “because home prices haven't bottomed out and rents will be supported by population growth."
Sources: Florida Realtors, Forbes, Local Market Monitor