The Orlando-Kissimmee-Sanford metropolitan area is the strongest commercial real estate market in the nation, according to a recently published report by the National Association of Realtors. Orlando gained 10,000 new residents from other states, according to the most recent census data, spurring a spike in the local real estate economy.
The National Association of Realtors utilized 25 different indicators in order to create a commercial real estate market index for the largest metro areas in the country such as year-over-year percent change in non-farm employment compared to the U.S. rate, unemployment rate against the U.S. rate, year-over-year percent change in average weekly wages compared to the U.S. rate, and GDP growth compared to the U.S. rate.
Orlando received high scores in considered metrics such as vacancy rates for commercial spaces, average multifamily rents, and weekly wages, leading to its pole position in the report. Wages are rising 9 percent in Orlando, compared to 4 percent nationally while the office vacancy rate is just 8 percent, compared to 12.2 percent nationally.
In the business sector, the industrial vacancy rate is 3.6 percent, compared to 4.1 percent nationally with the retail vacancy rate at 3.8 percent, compared to 4.5 nationally.
The Orlando area received a real estate boom over the past year in both domestic and international migration, becoming a hotspot for individuals moving from South and Central American nations to Florida. Naturally, this led to a hotter market that benefits property owners. Orlando’s effective rent, the final margin of profit a landlord has after building maintenance and expenses are considered, is $1,732 a month, up 26.4 percent from the year before.
Foreign real estate investors brought upwards of $12 billion to the Florida economy in the last year, totaling 22,500 existing homes purchased at a medium cost of $347,300, a real estate study reflected. The bulk of these purchases came from within the Miami Metropolitan Area, accounting for over 50 percent of properties purchased.
Florida as a whole scored highly in the group’s ratings, taking the top five spots. Following Orlando, Miami takes the second spot, which recently posted its third-highest real estate month ever in March.
“Demand is driving the Miami real estate market to fuel property appreciation and record sales,” Miami Association of Realtors Chairman of the Board Fernando Arencibia Jr. said. “Until we see new listings outpace active listings consistently month over month, our market will continue its current trajectory even in the face of increasing interest rates. Homebuyers with positive cash flow, strong jobs, and high equity are relocating to live in South Florida. The shift to working-from-home, Miami’s fintech expansion, and Miami’s stature as the No. 1 U.S. destination for global homebuyers continue fueling demand.”
Palm Beach, Fort Lauderdale, and Fort Myers round out the top five, creating a considerable gap between the Floridian cities and the report’s sixth-ranked metro center, Austin, Texas.
While economic numbers remain strong for landlords and property owners, some Florida lawmakers are expressing concern over the rising cost to rent within the state.
According to a new study released by Florida Atlantic University (FAU), The Sunshine State is home to the most overvalued rental markets. Researchers ranked the 25 most overvalued U.S. rental markets, and the top 5 cities with the highest rent premiums were all located in Florida.
The study showed that South Florida has the most overvalued rental market, with renters in Miami-Fort Lauderdale paying an average of $2,832 a month — 21.75% higher than what they should be paying based on the area’s long-term trends. Fort Myers ($2,052/18.16%), Tampa Bay ($2,029/17.08%), Sarasota ($2,402/16.98%), and Port St. Lucie ($2,201/15.61%) rounded out the top five.
“No legislation passed this session to address the ridiculous cost of rent, condo safety, or property insurance rates,” said Rep. Anna V. Eskamani following the April special session. “Easier to distract than solve problems.”
