As we have documented consistently on this blog, South Florida continues to be arguably the most popular destination in the country for people looking to improve their living conditions. With this said, we are beginning to see an issue with land scarcity throughout our region. As a result, we are seeing a stark drop in the number of new housing projects expected to be developed. Naturally, a decreased supply of land to develop is resulting in few housing options. This lack of supply combined with continued rising demand is putting housing affordability out of reach for many.
Housing start headwinds
New residential housing permits issued in South Florida plummeted 21% in 2022 when compared to the year before, according to the latest data from Point2Homes, a company that analyzes real estate trends. This figure was significantly higher than the 1% drop that was seen throughout the rest of the state as compared to the year prior. So what are some of the challenges being seen with housing starts? Here are few:
- More strict lending requirements
- Higher interest rates
- Increase in construction costs
- Less land to develop
- Higher cost of land making it cost prohibitive to build
According to data from the U.S. Census Bureau, Florida’s population increased by 1.9% to 22,244,823 from 2021 to 2022. This makes Florida the third most populous state in the country. Meanwhile, The Sunshine State had among the highest raw numbers in the country in terms of permits issued in 2022. As for affordable housing, the more supply of housing that we can bring to the market, the more competition this will create. As a result, we will see more competition among sellers and landlords. This ultimately would result in more competitive pricing.
Are you thinking about buying or selling property in South Florida? We can help! Contact Natasha at Live South Florida Realty, Inc. today. Also, feel free to download the Florida Home Search app for your smartphone or tablet.