In their latest publication, Florida Tax Watch looks ahead and makes its predictions for 2021. Their conclusion on the outlook for the Florida economy and real estate is optimistic. Economic growth and employment have “a slow but steady process” ahead while the property market looks set to continue its upward trend.
Florida GSP in 2021
Florida Tax Watch underlines the continued uncertainty for the US economy. It does, however, predict a strong increase in Gross State Product (GSP) for the Sunshine State in 2021.
It expects 4.9% growth this year for Florida, ahead of the 3.6% forecast for the US as a whole. The 2021 rise in GSP will also be higher than the average for Florida between 2015 and 2019 when the annual rate stood at 3.4%.
Job creation back
The pandemic hit employment particularly hard in Florida during 2020 when the jobless rate rose to 13.8% in April. However, as with the outlook for the Florida economy and real estate, job creation looks set to get back on track.
Florida Tax Watch predicts 5.5% unemployment in Florida this year, slightly below the national rate of 5.8%. Job creation will be strong at around 5.6% with the leisure and hospitality sector experiencing a surge in new employment. This industry is expected to add 11.9% more jobs this year.
Conclusion on Florida economy
Despite the “backdrop of a constantly changing pandemic”, Florida Tax Watch is optimistic for the Sunshine State’s economy in 2021. It says that “Florida looks poised to undergo the slow but steady process of economic rebuilding”.
Strong Florida real estate
The real estate sector in Florida will make up a substantial part in the rebuilding process. “The strength and resilience of Florida’s housing market in 2020 has been remarkable,” said Florida Realtors President Cheryl Lambert.
The figures for December 2020 certainly back her statement up. Single-family home sales ended the year with a 21% increase and a 14.4% rise in prices. Their median price currently stands at US$309,000.
Condos and townhouse properties in Florida also finished the year with a flourish. Sales soared by 27.7% and price increases almost matched single- family homes. They rose by 13.7% to reach a median of US$230,000.
Low inventories for now
Judging by levels of supply, the Florida real estate market will remain the domain of sellers in 2021. At the end of last year, the inventory of single-family homes in Florida stood at just 1.8 months. The supply of condos and townhouses was marginally better with 4.2 months’ inventory available.
Analysts predict, however, that 2021 will see a rise in the number of homes on the market. Florida Tax Watch said that “buyers are expected to see some relief as inventories gradually increase”.
Time to invest
Nonetheless, would-be buyers still face the dual challenges of rising mortgage rates and house prices. Both mean that many more will turn to renting a home rather than buying. This in turn opens up yet more opportunities for buy-to-let investment in Florida.
(Source: Florida Tax Watch, Florida Realtors)