Florida’s Booming Economy And Its Impact On Housing

Florida's economy
Florida's economy is booming and the housing market has reflected this.

Florida’s economy has been on a tear in recent years, outperforming the rest of the nation in terms of job growth, Gross Domestic Product (GDP), and tourism. This strong economic performance has subsequently had a significant impact on the state’s housing market, which has seen soaring prices and low inventory. We discuss some of these impacts below.

Florida’s economy: A beacon of sunshine

Florida’s economy has been one of the strongest in the nation in recent years. The state’s GDP grew by 7.0% in 2021, which was more than double the national average of 3.5%. This growth was driven by a number of factors, including the state’s booming tourism industry, its growing technology sector, and its low taxes.

Job Growth: Florida has also seen strong job growth in recent years. The state added over 500,000 new jobs in 2021, which was an increase of 4.2%. This job growth was driven by a number of sectors, including construction, healthcare, and professional and business services.

Tourism: Florida’s tourism industry is one of the largest in the country, and it has been a major driver of the state’s economic growth. In 2021, Florida welcomed over 112 million visitors, who spent a record $132 billion. This was an increase of 10.9% from 2020.

Technology: Florida’s technology sector is also growing rapidly. The state is home to a number of large tech companies, including Amazon, Microsoft, and Facebook. These companies are attracted to Florida’s low taxes, its large pool of talent, and its proximity to Latin America.

Low Taxes: Florida is one of the most tax-friendly states in the country. The state has no income tax, a low sales tax, and no inheritance tax. This makes Florida an attractive destination for businesses and individuals alike.

Housing Market: Florida’s strong economic performance has had a significant impact on the state’s housing market. Housing prices in Florida have been rising rapidly in recent years. The median home price in Florida increased by 21.4% in 2021, to $377,200. This is more than double the national average increase of 9.4%.

Low Inventory: In addition to rising prices, Florida’s housing market is also facing a shortage of inventory. The number of homes for sale in Florida has been declining for several years, and it is now at a record low. This is making it difficult for buyers to find homes, and it is putting upward pressure on prices.

Impact on Affordability: The combination of rising prices and low inventory is making it difficult for many Floridians to afford to buy a home. The median home price in Florida is now more than five times the median household income. This is making home ownership less attainable for many Floridians, especially young people and first-time home buyers.

Summary

Florida’s economy is booming, and this has had a significant impact on the state’s housing market. Housing prices have been rising rapidly, and inventory is low. This is making it difficult for many Floridians to afford to buy a home. The future of Florida’s housing market is uncertain, but it is clear that the state’s strong economy will continue to play a major role in shaping its housing market.

Are you looking to buy or sell a property in the South Florida area? We can help! Contact Natasha at Live South Florida Realty, Inc. today! Also, be sure to download the free Florida Home Search app for your smartphone or tablet.

By natasha moore

REALTOR® with Live South Florida Realty, Inc.