Ah, Florida. The land of sand, snowbirds — and real estate speculation.
Ever since the 1920s, when the first real estate boom officially arrived at the doorstep of the Sunshine State, the idea that you too could own a sunny slice of Miami or Tampa has taken root within the American dream.
But, as with any investment, the risk of loss is real and timing is everything. Florida housing prices, which hit a peak in December 2006, are slowly recovering after the Great Recession nosedive — the state’s fall was among the harshest in the nation — but recently, the trend is positive, stoking renewed interest in real estate.
According to the S&P/Case-Shiller Index, considered one of the more reliable indicators of local real estate market trends, home prices in the Miami area have been on an uninterrupted march up since November 2011. Recently, in Lauderdale-by-the-Sea, a community just north of Fort Lauderdale, buyers camped out overnight for a chance to snap up new condos selling for $500,000 to $1 million.
Investors will find real estate prices vary widely across Florida. In a recent study, the cheapest average sale price was $37.36 per square foot in Kenneth City in Pinellas County. The most expensive was Key Biscayne at $546.77 per square foot, a difference of over $500.
So what area offers the best bang for your real estate investment buck? Asset Quest crunched the numbers to find out.
Doral tops the list thanks to its relative affordability, low unemployment rate (4.4%, or over a full percentage point lower than the statewide rate) and strong population growth. This north-central Miami-Dade County city from 2013 to 2015 welcomed almost 6,000 new residents, a gain of more than 14%.
- Bal Harbour
In tiny Bal Harbour, population 2,569, price could quickly become a factor — it’s the most expensive location in the top 10 with an average sales price of $340 per square foot. Still, there are plenty of buyers. On Zillow’s 0-10 scale for speed of sale, Bal Harbour scored a healthy 8.66.
The watchword in Homestead is growth. More than half — 56% — of its homes have increased in value over the past 10 years, yet housing remains relatively affordable in this city of 61,714 residents. Sale prices over the past two years averaged just $79.42 per square foot, among the most affordable on the list.
- Miami Lakes
Miami Lakes may not boast oceanfront property, but a full 57% of its housing stock has increased in value over the past 10 years, and vacancies have dropped 3.6%. That’s a good sign for investors who may have to pay a premium for this suburban location just north of Miami. Here, buyers paid an average of $152 per square foot for a house.
Bargains abound in Marianna, home of the top ten’s lowest price-per-square-foot sale price of $61. It’s also clearly attracting new residents, with a 28% increase in the population from 2010 to 2013.
- Hialeah Gardens
Hialeah Gardens, population 22,136, had the highest overall market health score in the survey at 9.55. This means buyers who are looking for a quick turnaround on their investment will find many options to flip housing in Hialeah Gardens.
This diverse and growing community in northeastern Miami-Dade County is known for its high concentration of transplants from the Northeast, and its many high-rise condos. Buyers will find an average sales price of $227 per square foot and options for Intracoastal Waterway and Atlantic Ocean views. The city’s investment score also benefits from its 7.51% increase in population since 2010.
This small suburban village in Miami-Dade County is the second-most expensive in the top 10, with the price of $269 per square foot. Its population has grown a modest 1.54% in recent years, and village leaders are thinking about expanding. A common discussion involves annexing land west of U.S. Highway 1 to help build out the small village’s tax base.
- Cape Coral
Cape Coral moves in many directions: It is the largest city in our top 10 at 158,415 residents, and it has an average sales price that is the third lowest in the top 10 at $96 per square foot. It’s the only city on our list located in Lee County, which is also home to Fort Myers. Cape Coral residents are thinking about development, which can have a major effect on real estate values.
- Winter Garden
The only place in the top 10 near Orlando, Winter Garden has a lot to offer those diving into the real estate market. Its vacancy rate declined while its population grew over 13%, suggesting strong demand for housing. Perhaps it’s the nearby Disney World effect, but Winter Garden enjoys a particularly strong job market, which supports a growing housing market. The unemployment rate in Winter Garden in November 2015, the most-recent data available, was 3.8%. By comparison, the entire state of Florida was at 5.6% for the same month