Florida Economic Market Report

Market Overview

Economic Landscape is Emitting Rays of Sunshine

Population Growth is Heating Up

Residential Housing Market Recovery is Moving Forward

Top Five Housing Markets

Report Highlights

2015 Q1

Florida is getting hotter, and this time it’s not just the weather. The state as a whole is experiencing one of the more exaggerated bounce backs in the nation following the housing bust that eviscerated a once-booming economy. The state is gaining momentum once again, with several aspects of its local economy seeing bursts of activity. The job market is expanding and diversifying more than ever before, creating a foundation for continued economic growth. Several key sectors have returned to norms seen prior to the recession, or better. What’s more is many sectors in the state are even surpassing national averages. According to a recent report conducted by Chase Bank1, Florida’s real gross domestic product is estimated to have increased by 4.2% in 2014.

This resurgence is not going without notice, as some of Florida’s most notable metros are enjoying unprecedented population growth, causing the state’s total population to surge. All of this activity is giving rise to recoveries in housing markets across the state that are seeing increases in construction, appreciating home prices, balancing inventories, and an influx of international sales. With Florida boasting a desirable climate for both living and doing business, it was only a matter of time before the state regained traction, and this economic revitalization only serves to improve Florida’s prospects over the next few years.

1JPMorgan Chase & Co., Florida Economic Outlook: June 2014.

Florida Market Overview

Florida continues to make strides toward building a vibrant and sustainable local economy. The unemployment rate, which skyrocketed at the height of the recession, has continued to plummet. Over the past 12 months unemployment has fallen over 100 bps and is now in line with the national norm. Several employment segments are experiencing significant growth, leading to this improvement in the unemployment rate. Professional and business services employment is at a new all-time high, with payrolls up 4.5% from a year ago. Local companies offering legal, advertising, consulting, and executive recruitment services have seen a boost. The leisure and hospitality segment is also rebounding nicely. After bottoming out during the recession in late 2009, leisure and hospitality employment is now at a new

record peak, with growth clocking in at a solid 2.1% over the past six months.

Perhaps the most notable employment trend is taking place in construction however, as this segment is roaring back after a massive contraction as a result of the housing bust. While still nowhere near the levels seen prior to the recession, employment in this sector is growing rapidly. Since mid-2012, year-over-year construction employment growth in Florida has regularly outpaced the US at large. Over the past year the state saw construction employment grow 7.8%, an exceptional figure. Given all this improvement within Florida’s economy it should come as no surprise that personal income in the state grew substantially in 2014 from 2013, ranking 11th in the country, with 4.6% growth.

Economic Landscape Is Emitting Rays of Sunshine

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Florida’s population growth has been making noise as well. After a recent announcement that Florida surpassed New York to become the third most populous state, more good news has been rolling in. The latest estimates from the US Census Bureau indicate that the fastest growing city in the country is a senior community outside Orlando called The Villages. The city grew 5.4% in 2014, a rate nearly double the second fastest growing city in the US. In fact, Florida accounted for six of the 20 fastest growing areas in country, the greatest proportion of any state. The other metro areas include Cape Coral-Fort Myers, Naples-Immokalee-Marco Island, Orlando-Kissimmee-Sanford, North Port-Sarasota-Bradenton, and Panama City.

In addition, seven Florida metros were among the top 50 in terms of residents added to the local population; these seven metros accounted for the majority of the state’s population growth. These areas include Miami-Fort Lauderdale-West Palm Beach, Orlando-Kissimmee-Sanford, Tampa-St. Petersburg-Clearwater, Jacksonville, Cape Coral-Fort Myers, North Port-Sarasota-Bradenton, and Lakeland-Winter Haven. What makes these figures even more impressive are the demographic conditions under which they were conceived. In nearly half of Florida’s counties, there were more deaths than births during this period, pointing to overwhelming migration into the state.

The Florida housing market continues to pick up the pieces from the recent housing bust and has posted a swift turnaround thus far. Key metrics show a strengthening housing market, one that is beginning to resemble normalcy, providing a base for sustainable, healthy growth. With traditional sales increasingly representing a larger share of the residential marketplace, along with shadow inventory declining, more transparency is available now than at any other point following the recession. The current market poses a unique opportunity for homeowners and investors alike, as market stability and resilience provide a necessary foundation for a robust real estate environment.

The single family market is demonstrating regular improvements. The overall Florida median sale price for single family homes is maintaining its upward trajectory, growing a solid 9.1% over the past 12 months. Closed sales are surging, having increased a considerable 19% from a year ago. Cash sales still represent almost half of all sales, one indication that

investor activity remains prevalent. Inventories are up 2.1% from 12 months ago, indicating that homeowners who may have been waiting for more a promising seller environment are now gaining confidence in the market. Moreover, the median days on market for single family homes has gradually declined over the past few years and is now around 60 days, signaling a more active market.

The condo market is also making a comeback, with high-rise buildings making up a substantial amount of new construction projects in the state. The median sale price for condos and townhouses has been gradually climbing and is up 8.3% over the last year. Closed sales have increased over the past year as well, posting a 7.4% year-over-year rise. Although cash sales as a percent of closed sales have fallen 5.1% over the past twelve months, they still account for more than half of closed sales. Similar to single family homes, condo and townhouse inventories are seeing more balanced levels and are up 2% from a year ago.

Population Growth Is Heating Up

Residential Housing Market Recovery Is Moving Forward

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Naples-Marco Island, FL

• Employment approaching pre-recession peak

• Job growth outpacing broader Florida since

late 2012

• Population growth trending upward faster

than state

• Home sales choppily increasing

• Home prices up 12.6 percent from last year

Punta Gorda, FL

• Job gains increasing, recouping nearly all jobs

lost during downturn

• Employment growth up considerably from

recessionary pace

• Local population growth outpacing state

since 2012

• Home sales back in normal range

• Home prices continue appreciating, up 4.3%

over past year

Fort Lauderdale-Pompano

Beach-Deerfield Beach, FL

• Job count recently eclipsed pre-recession peak

• Employment growing at a healthy pace, on par

with state

• Local population growth keeping pace with

broader Florida

• Home prices grew a solid 7.8% percent from

last year

• Despite home price appreciation, Fort

Lauderdale remains affordable

Orlando-Kissimmee-Sanford, FL

• Jobs count has exceeded pre-recession peak by

nearly 50,000 jobs

• Employment growing at rate greater than

broader Florida

• Population growth faster than Florida as a whole

• Home sales choppily picking up

• Homes still affordable despite increase 8.5%

price increase from a year ago

Sarasota-Bradenton-North Port, FL

• Economy posting healthy job gains, approaching

pre-recession peak

• Employment growth faster than broader Florida

• Local population growth gaining momentum

and besting the state

• Home prices up 8.4% from year-ago level

• Boasts favorable affordability, close to

national level

Interested in one of Florida’s hottest markets?

Take a look at these quick stats compiled from

Auction.com, IHS Global Insight, Bureau of Labor

Statistics and Census Bureau data.

A Quick Look at Florida’s Top Five Housing Markets

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