Market Spotlight: Florida Real Estate Markets

Florida has long been a favorite among real estate investors, in large part due to the explosive job growth and population growth that many Florida markets have seen over the past several years. 

Stunning beaches, beautiful weather, numerous landmarks and attractions, phenomenal job growth, and no income tax are just a few of the top reasons why new residents and investors are attracted to the Sunshine State.

We are quite bullish on Florida real estate, and in this article, we’ll dive into the different reasons why Florida is such a hotspot, the tremendous growth happening in a few key Florida markets, and why you might want to consider investing in Florida.

 

Why We Love Florida Markets

Did you know that Florida is the only place where some people learn to swim before they can even read? Summer in Florida lasts for 6 months, and it comes twice a year (see what we did there?). This lifestyle explains why so many people are choosing to move to Florida.

On top of that, employers are taking notice of the Sunshine State for its tax benefits, quality of living, and ability to attract top talent, and many are moving their offices and headquarters to Florida, thus increasing both job growth and job diversity.

Cities such as Orlando, Jacksonville, and Tampa are among the most popular destinations for those looking to move to Florida. Even though the housing price averages aren’t high in Florida, many people still prefer to rent their home instead of making a big purchase. For example, in Orlando around 45% of the population are renters.

 

Florida’s Booming Job Markets

Given that Florida has a strong economic outlook, many businesses are setting up base in the area. In fact, the state is home to nearly twenty Fortune 500 companies, with many more businesses exploring their options and considering moving to Florida. This translates to more job opportunities, which in turn affects the demand for housing and real estate.

Florida has one of the strongest job markets in the United States, and in September of 2021, Florida recorded a job growth three times faster than the overall US growth. This impressive job growth is projected to continue to be higher than the national average in 2022 and beyond. 

 

Florida’s Booming Population

Along with strong job growth often comes strong population growth, which is exactly what we’re seeing in Florida markets. The population in Florida is one of the fastest growing in the country, and as a result, this has triggered an increase in the demand for housing and accommodation. 

Florida consists of a diverse blend of job seekers, young professionals, baby boomers, retirees, and foreign investors, making it a great place to live and work, and above all, a lucrative destination for real estate investors.

Florida’s population has been steadily increasing across the entire state and this population growth is important when considering which markets to invest in. Florida saw the second-highest population growth in the nation over the last year.  

With Florida being home to some of the most popular cities in the United States – including Orlando, Jacksonville, and Tampa – we can expect to see the population continue to grow over the next 10 years as people continue to move here. 

 

Florida’s Ideal Rental Market

In addition to the soaring population growth, Florida has a stable rental base compared to many other states. Because of the high quality of living, Florida attracts not only young professionals and families, but also a high percentage of retirees looking to rent. 

Retirees usually have a regular income, tend to stay longer compared to younger tenants, and generally treat the properties better than younger renters.

On top of that, the housing market is relatively stable across Florida markets, and rental rates are continuing to climb. This is good news for investors because, as rental demand and rental rates continue to rise, commercial multifamily assets will be able to generate more rental income, thus leading to appreciation over time. 

In Jacksonville alone, rental rates climbed more than 20% in 2021 and this growth is expected to continue through 2022 and beyond.  

 

Top Florida Real Estate Markets

Now that you have a good idea of the job growth, population growth, and job diversity across Florida as a whole, let’s zoom in to three of the top real estate markets in Florida – Jacksonville, Orlando, and Tampa. 

We’ll walk through the high level growth in each market, what makes each one unique, and the outlook for each MSA in the years ahead.

Jacksonville, Florida

One market we’ve definitely got our eye on is Jacksonville. Not only is Jacksonville one of the fastest growing markets in Florida, but it’s one of the hottest in-migration metro areas in the country.

Why We Love Jacksonville

Jacksonville is the 12th largest city in the US, with a population of 800,000 residents within the city itself, and over 1.6 million residents in the greater Jacksonville metro area.

Jacksonville’s convenient location is a huge draw to residents and businesses alike – it’s just 45 minutes from Orlando and 60 minutes from Atlanta.

Many people are drawn to Jacksonville for the suburban lifestyle it offers, together with the city’s attractive year-round warm climate, affordable cost of living, and beautiful white sand beaches just minutes from downtown Jacksonville. Further, Jacksonville boasts the largest urban park system in the US, with over 450 city parks across over 80,000 acres.

Jacksonville’s Job Growth & Job Diversity

Jacksonville’s business-friendly government and policies continue to strengthen the local economy and attract businesses small and large to the area, contributing to the 55%+ GDP growth over the last 10 years and leading to strong job growth.

In addition to strong job growth and opportunities, Jacksonville also boasts strong job diversity, with a good mix of manufacturing, financial services, logistics, healthcare, e-commerce, IT, and other service and tech industries.

Jacksonville’s many colleges and universities – including University of Florida, University of North Florida, and Jacksonville University – turn out thousands of skilled workers every year, including a strong pipeline of skilled tech graduates.

Jacksonville is home to multiple Fortune 500 companies, including Fidelity, CSX Corporation, and Southeastern Grocers. Major employers with headquarters in Jacksonville include Bank of America, Merrill Lynch, JPMorgan Chase, Johnson & Johnson, McKesson, Miller Electric Company, and many more.

Jacksonville’s Population Growth

These employers have brought strong job opportunities to the Jacksonville area, leading to tremendous population growth. Over the last 10 years, Jacksonville added over 100,000 residents – making it one of only 14 cities in the US that saw a population increase from 2010 to 2020 of more than 100,000 residents.

In addition, the Bureau of Economic and Business Research (BEBR) at the University of Florida predicts that over the next ten years, more than 800,000 new residents will move to the Jacksonville area, further driving rental demand.

Jacksonville’s Rental Demand & Rent Growth

Over the past year, rents in Jacksonville have increased by 20%. Further, since the last real estate cycle market bottom in March 2012, home prices in Jacksonville have increased by more than 81%. 

Together, the combination of strong job growth, population growth, and job diversity, together with strong rental demand and market appreciate lead to a very positive overall multifamily outlook for this market.

Orlando, Florida

When you think of Orlando, the first things that come to mind are likely Disney World and Universal Studios, pristine golf courses, and premium shopping outlets. 

And while it’s true that Orlando is a mecca for tourists and international travelers, the market has also become one of the hottest markets for industrial and high-tech jobs, with one of the largest research parks in the country.

Orlando’s Population Growth

The tremendous economic growth in Orlando has led to boundless opportunities, which, when combined with the high quality of living, makes Orlando a magnet for new residents. Orlando’s rate of population growth is the second fastest among the top 30 largest cities in the US, with over 1,000 new people moving to Orlando every week.

The city of Orlando is home to over 300,000 people, with 2.4 million residents in the greater Orlando metro area. As the strong rate of growth continues, experts predict that the population of the Orlando area will more than double in the coming years, hitting 5.2 million residents by 2030.

Going hand in hand with that strong population growth is job growth, projected to grow by 19% by 2030 – nearly double the rate of growth for the US. 

Orlando’s Job Growth & Job Diversity

Many employment sectors in Orlando have shown tremendous growth over the last year, and over the next 10 years, the fastest-growing sectors will include home and healthcare services, manufacturing and construction, engineering and transportation, and computer systems design.

As mentioned previously, Orlando has become a hub for industrial and high-tech businesses, with some of the largest engineering, manufacturing, and aerospace companies taking up residence in the Orlando metro area. Some of these companies include Lockheed Martin, General Dynamics, Mitsubishi Power Systems, Siemens, AT&T, and Boeing.

On top of a strong tech presence, Orlando is also home to several major defense employers, including the National Center for Simulation, US Army Research, Patrick Air Force Base, and Cape Canaveral Air Force Station.

Orlando’s Rental Demand & Rent Growth

Together, these major employers bring thousands of jobs to Orlando every year, thus contributing to the soaring population growth, strong rental demand, and rise in rental rates. 

Rents in metro Orlando increased by 23% over the last year, and we anticipate that the rental demand and growth will continue to remain strong in the coming years.

Tampa, Florida

Before we go, there’s one more market in Florida that we wanted to draw your attention to – Tampa – one of the hottest metro areas for investors nationwide. Why are so many investors drawn to this market, and what’s the multifamily outlook here? Let’s dig in.

Why We Love Tampa

Located in western Florida along Tampa Bay and near the Gulf of Mexico, the Tampa Bay Area offers an attractive combination of warm weather and coastal living, together with business expansions spurring economic growth and ample job opportunities. 

Tampa’s Job Growth & Job Diversity

The Tampa economy includes a broad and diverse economic base, with a unique mix of finance, technology, tourism, and construction sectors, along with strong growth in IT, life sciences and healthcare, manufacturing, and distribution and logistics. Further, the Port of Tampa is the largest in the state of Florida, further leading to economic diversity and drawing top employers to the area.

Tampa’s Rental Demand & Rent Growth

While area job growth is bringing many new residents to the area, the hot housing market is making it difficult for many first-time homebuyers to compete, thus driving up rental demand throughout the area. 

Rents in Tampa increased by 25% in the last year alone. Further, nearly 50% of the households in Tampa rent rather than own, making this an ideal market for multifamily investment.

 

Why You Should Consider Investing in Florida Real Estate

From the white sandy beaches to world-class parks to near-perfect weather, Florida is the ideal destination to live and work. The idyllic and tranquil lifestyle is the main reason why so many people choose to migrate to Florida, further increasing the demand for housing and driving up rental rates.

As we continue to see low inventory and pent-up demand, along with strong job growth and population growth, we expect that these Florida markets will be ideal for multifamily investment now and in the coming years.

If you’re an accredited investor looking for passive multifamily real estate investment opportunities, we invite you to invest alongside us as we invest in Florida, as well as other top real estate markets around the country.

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