The price inflation of the pandemic real estate market in the United States has not been distributed equally. Most major markets across the country have seen median home prices increase at varying levels, but some have been supercharged by home buying trends and unique market conditions.
In some areas, the attractiveness of properties, combined with a low supply of homes, led to an especially steep climb in prices over the course of 2021. Vacation destinations were among the hottest and most competitive markets in the nation — and new data show Florida is tops among these desired locales.
The Wall Street Journal and Realtor.com’s Emerging Housing Markets Index analyzed 300 large metropolitan markets based on factors including economic vitality and quality of life. The quarterly index assesses which markets are most likely to benefit home buyers and investors.
Five of the top 20 markets on the index are in Florida, led by Naples-Immokalee-Marco Island, North Port-Sarasota-Bradenton and Cape Coral-Fort Myers.
Some of the interest in Florida stems from an anticipated uptick in international travel this year. There’s a strong appetite for vacation rentals among potential foreign buyers who see a golden opportunity in Florida markets.
“We’ve seen a shift as more and more people are looking at second homes as investment opportunities rather than a way to simply finance a dream vacation home for personal use,” Shaun Greer, vice president of real estate and strategic growth at international rental-home management company Vacasa, told MarketWatch.
The housing market in Palm Beach County exemplifies the rapid upward trajectory of prices over the last year.
From 2020 to 2021, the county saw a 22% increase in the median home price, which reached $475,000, according to the Palm Beach Post.
In contrast to the median, the average sale price in the county hit a remarkable $926,303, up 35.6% over 2020 and an incredible 71% increase over 2019.
The average sale price, of course, is considerably skewed by the high fetching price of luxury properties. What it shows is that the second home and vacation rental investment markets are off the charts in Palm Beach.
These are people who never thought they would buy in Florida but came down during COVID to escape the restrictions and fell in love with South Florida,” Boca Raton-based Realtor Bonnie Heatzig told the Post. “2021 absolutely brought a time when there were unprecedented bidding wars.
Apart from foreign buyers in Florida, a significant number of New York residents have flocked to Palm Beach County and other areas after finding that the prices compared favorably to Manhattan and the environment offered a more relaxing lifestyle.
With low home inventory expected to continue well into 2022, there remains considerable optimism around the investment prospects in Florida and the likelihood that a hot market will continue to marked by steep competition.
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