• December 26, 2016

The Sunshine State Shines Again: Northern Florida’s Best Real Estate Investment Opportunities

The Sunshine State Shines Again: Northern Florida’s Best Real Estate Investment Opportunities

Now that the recession has been quelled and overbuilding is no longer an issue, there are some serious real estate growth opportunities in Florida. In South Florida, the prices have climbed back to their original values. In the north, however, particularly Gainesville, Ocala, and Deltona-Daytona Beach, houses are surprisingly underpriced. Those in Osceola, St. Johns, and Seminole can expect to see a sharp increase in demand for mortgages and construction loans. Osceola and Flagler counties are prime locations to convert single-family homes into rental properties.

Similar to Central Valley in California, northern Florida was first developed to be an area of agriculture, hence the abundance of fruit and potted plants. The mild climate brought an influx of residents to the area that initially settled on the coast, but moved inland when they found property and land was cheaper. Due to transportation across the region being relatively easy, many retirees from the Midwest moved to this area. The development of Disney World near Orlando laid the foundation for the state’s colossal tourism industry.

South Florida is limited in its real estate opportunities due to the lack of land that is not near a coast. As the urban centers in the north expand, the best places to invest are in the surrounding semi-rural land that can be used for agricultural development. Services, healthcare, and retail stores comprise the bulk of the jobs in these areas, in addition to other jobs with modest pay. Subprime loans and foreclosures affected markets all across Florida, but the North felt less of the blow.

An analytics company called Local Market Monitor has used data it accrued to determine the top eight counties in major market areas that will prove to be worth investing in the next few years due to an increase in housing demand.

Alachua County – Gainesville
With above-average population growth and a job growth that is nearly twice as much as the national rate, Alachua County looks promising. Although healthcare is the largest segment of the economy, the majority of the job growth has been in business services and restaurants. The University of Florida is the main proponent of the increase in population. In close proximity to the university, there is a very favorable home price-to-rent ratio. A 17 percent increase in home prices over the next three years is predicted, coupled with an increase in home construction, which will include 3,000 single-family homes and 4,000 rentals. The 32605 zip code area, which has a higher average income than the rest of the county, has seen an especially sharp increase in renters.

Clay County – Jacksonville
Both the population and number of jobs have grown twice as fast as the national average. Business services and healthcare have seen most of the new jobs as a result of Jacksonville’s suburbs expanding to the south and southwest. The demographics of this area illustrate that there are many veterans living in the county, the average income is fairly high, and there is a low amount of rental property. The price-to-rent ratio favors single-family rentals. A 30 percent increase in home prices over the next three years is expected, alongside the creation of 2,500 single-family homes and 1,500 rental homes. The affluent 32065 zip code area has seen the greatest increase in renting and population.

Flagler County – Deltona-Daytona Beach
Both population and job growth have astoundingly grown at triple the rate as the rest of the country. Business services, restaurants, and retail are the industries where most of the growth has occurred, which is typical for suburban areas where many people commute to work. Despite the recent boom in work, healthcare providers and retail owners are still understaffed. Based on demographics, this area is home to a large elderly population with moderate income, and there are not many rental homes available. Single-family renters will find the home price-to-rent ratio very pleasing in this area. There is predicted to be a 34 percent growth in the price of homes over the next three years. There will also be a heavy amount of construction, with 2,000 new single-family homes and 1,000 new rental properties being built. The sharpest increase in total renters has been in the zip code 32137.

Leon County – Tallahassee
The county’s population has experienced only modest growth, but has experienced above-average job growth. The government sector, alongside Florida State University, dominates much of the local economy. The university draws an influx of renters to the area. Healthcare, business services, and construction have seen the largest increases in work. Home price-to-rent ratio is fair for single-family rentals, which will likely be taken advantage of by university staff. Over the next three-year block, home prices are expected to rise 22 percent. 1,500 single-family homes and 2,500 new rentals will also be built. Zip code areas 32311 and 32312 have seen the largest increase in demand for rentals, as these locations have a high income and are not inhabited by students.

Marion County – Ocala
Population has experienced an increase slightly greater than the rest of the country this past year, and jobs have increased at double the rate. Most new occupations are found in the area’s large healthcare sector. In Marion County, there is a large elderly population, many of whom are disabled. Furthermore, the average income is low, as is the home price-to-rent ratio, which benefits single-family rentals. There is an expected 14 percent rise in home prices over the next three years, with a large amount of construction; 5,500 single-family homes and 3,500 new rentals will be created. The largest population growth has been seen in the 34473 zip code area, where the income is moderate and the demand for rentals is increasing.

Leon County – Tallahassee
With more than triple the national average growth in population and double the growth in jobs, Leon County is quite promising for investors. Healthcare and retail have seen the largest increase in jobs, which is the norm for expanding suburban areas. The demographics in this area include many Latinos and immigrants who make an average income, and also have properties with very low home price-to-rent ratios. The cheap properties are ideal for single-family rentals. A price increase of 32 percent is expected by the end of the decade. 5,500 new single-family homes and 4,500 rental homes will be developed during this time. Population and rental demand have been the most prominent in 34746, a zip code west of Lake Tohopekaliga.

Seminole – Orlando
Although population has only grown marginally quicker than the national rate, jobs have grown twice as fast in this county, mainly in business services and construction. The demographics of the area portray residents with a fairly high income, and rental properties with a strong home price-to-rent ratio, which are good for single-family renters. There is an expected price increase of 26 percent over the next three-year period. A very high level of construction will also take place, including 9,000 new single-family homes and 6,000 rentals. Population and rental growth have occurred mainly in the 32703 zip code area, which can be found northeast of Lake Apopka. In this location, income is high and there is a large volume of immigrants.

St. Johns County – Jacksonville
Population has grown at an enormous 400 percent of the national rate, and jobs at more than 200 percent, with many of them in tourism and healthcare. The demographics are made up of an older population that has a high income, and there is a low amount of rentals to choose from. The home price-to-rent ratio is high, which implies there is more success at either the low or high segment of the market, but not much in the middle. A 37 percent increase in home prices is expected over the next three years. 6,500 single-family homes and 3,500 rentals will be built, as well. The zip code area 32086 will see the most success in single-family rentals due to its above-average income and rental demand. For more information regarding real estate investments, [Click Here].