Residential, commercial prices soar
Credit: Ridofranz
With the price of property insurance based in part on property value, that property – whether residential homeownership, rental, or commercial real estate in Florida – keeps going up and up! New reports show the Sunshine State leading the nation in home prices, residential rent hikes, and on the commercial side, having 9 of the top 15 strongest markets in the country. Miami-Dade County has set a new record price for office space at $100 per square foot.
A new study by Florida Atlantic University and Florida International University ranks Florida’s and Ohio’s housing markets leading the nation in overvalued (aka “overpriced”) homes. Among the 33 most inflated U.S. markets at the end of December 2021, seven are from Florida, including No. 12 Lakeland and No. 14 Tampa, both at more than 40 percent above historic pricing. Miami has the least overvalued market in Florida at about 21%. You can view the Florida rankings here. With the high prices though come concerns of another real estate bubble.
“If you’re buying a home in these metros across Florida, Ohio and other areas, it’s imperative that you know you’re buying close to the peak of the market,” said Dr. Ken Johnson, an economist at Florida Atlantic. “The danger is that prices will soon level off or even decline, and you’ll be stuck in that home for a significant amount of time before you can sell it at a profit that makes financial sense.”
Rental housing is high, too, with Florida being described as “on another level.” “Florida over 2021 had the most rent growth of any state or general area in the country,” said Jeff Andrews, data analyst for the rental listing platform Zumper. “And I don’t think it was even very close.” Zumper’s 2021 Annual Rent Report listed Florida as having five of the top 10 highest rent increases in the country’s most populated areas. Miami took the top spot with a 38.2% increase, followed by Tampa at 38.1%, and Orlando #3 at 32.8%. Jacksonville came in #6 and St. Petersburg #10. Miami also ranked #5 overall most expensive residential rent in the country, with a 1 bedroom median rent of $2,280.
Meanwhile on the commercial real estate side, the National Association of Realtors 2021 fourth-quarter report shows Florida is home to 9 of the top 15 areas with “strong commercial real estate conditions.” The report looks at a range of commercial markets, including multifamily, office, industrial, retail and hotel property, and creates individual reports by state, with the Florida report here. Fort Myers and Jacksonville came in 3rd & 4th, Miami and Naples came in 6th & 7th, North Point-Bradenton-Sarasota & Orlando came in 9th & 10th, Palm Beach and Port St. Lucie came in 12th & 13th, and Tampa came in 15th on the list.
And to note the sign of the times, Miami has set a new record price for office space at $100 per square foot at an office building on Brickell Avenue. The Miami-Herald reports “it’s sending shock waves through the city’s real estate market, at a time when companies are still trying to figure out their return-to-work plans as the coronavirus pandemic drags on.”
See you on the trail,
Lisa
LMA Newsletter of 2-7-22
