We are living through one of the most exciting and at the same time the most difficult times in the history of the housing market. Demand from home buyers across the country, historically low mortgage rates and rising homeowner stocks have allowed the real estate market to thrive in new ways amid the uncertainty of the pandemic.
On the other hand, the limited stock of existing homes against a backdrop of persistent high demand has caused house prices to rise, which has left some people exhausted in their search for housing. The new construction and development industry also faces certain challenges. Demand far exceeds supply in the country’s housing market – the United States is reported to be short of 5.24 million homes. But the gap between new supply and demand had already widened long before the pandemic, in large part due to severe labor shortages in the construction industry. Adding to the problem is supply chain disruptions that have caused delays and increased the cost of building materials.
But there is good news for Florida: it remains a strong market for new developments. Despite the challenges, we are seeing growth and consumer and manufacturer confidence in the market. Extended periods and difficulties during the eligibility process have slowed the pace of construction, but demand persists. Coldwell Banker Development Services vice president in Florida, Alec E. String, shares that even with rising prices, land in Florida is in high demand for developers.
He says, âWe have noticed the steady increase in land rights over the past 18 months. Even though these projects are taking longer than usual and house prices are rising due to the rising cost of materials, we are seeing consumers across the state are willing to pay it, and developers are confident of the opportunity presented by the Florida market. . “
The point is, Florida has already seen one of the largest portions of growth within the new construction industry. The volume of residential construction has increased statewide. For single-family homes, the number of building permits filed has been on the rise since 2009, after hitting its lowest point during the recession. Between 2015 and 2020, Florida saw more than 800,000 permits issued, according to a US Census Bureau building permits survey – and it continues to rank among the top states with permits applied for in 2021.
The same factors that make Florida a premier relocation and investment market contribute to developer and consumer confidence in new construction opportunities across the state. Factors such as the lack of income tax, the ability to work remotely, and the availability of land for development, consolidate Florida as the primary market for new construction. For developers, population growth is a key factor. According to U.S. Census data, Florida’s population has grown 14.6% over the past decade – and the pandemic has only accelerated that, as migration from high-density markets has brought in volume. high of people in Florida.
Purchases of townhouses and single-family lots exceed sales in places where there is more land to develop, such as the Florida Panhandle, East Central Florida, and the Gulf Coast. Southeast Florida is not lagging behind, in fact, it continues to see exponential growth in redevelopment and new condominium spaces, especially on the coast. Simply put, Florida is reaping the benefits of a robust real estate market and new developments.
Duff Rubin is the President of Coldwell Banker Realty in Florida.