Florida’s strong housing market is an economic engine pumping dollars, jobs, and numerous other benefits into communities across the state. Low interest rates and innovative mortgage loan programs helped homeownership become a reality for 69.5 percent of all Floridians in 2003, higher than the national homeownership rate of 68.3 percent, according to the U.S. Census Bureau.
In fact, the real estate and construction industries have a total impact on Florida’s economy of about $233.9 billion annually, according to researchers with the University of Florida’s Shimberg Center for Affordable Housing.
As political candidates throughout the state prepare for upcoming elections, the Florida Association of Realtors has outlined 10 key points they need to know about the housing market and real estate industry.
1. Obstacles to homeownership continue to exist, leaving the Housing Act of 1949’s goal of “a decent home and a suitable living environment for every American family” unfulfilled. A small increase in housing costs can put homeownership out of reach: for every $100 increase, between 1,575 and 1,880 families in Florida find themselves unable to buy a home.
2. Documentary stamp taxes on home sales generate millions of dollars, providing more than $250 million annually for affordable housing programs in Florida. Doc stamp revenues not specifically earmarked for the state’s affordable housing trust funds also help pay for other worthy state programs through general fund revenues.
3. Housing accounts for 32 percent of household wealth in the nation. Homeowners have a total of about $8 trillion in home equity, which they often use to help pay for college expenses, as a nest egg for retirement or in other ways that benefit the economy.
4. A housing gap remains and may be growing. While the national homeownership rate stands at a record 68 percent, millions of working families are still struggling to obtain a decent place to live. The homeownership rate for minorities lags 25 points below Caucasian households. In addition, more than 14 million people still spend more than 50 percent of their income on housing or live in seriously substandard housing.
5. The need for affordable housing continues to grow. As the number of immigrant, minority and female-headed households continues to grow over the next decade, demand for starter homes and affordable rental housing will increase. Unfortunately, more and more working families — including teachers, firefighters, nurses, police officers and other public servants — are being priced out of the local markets where they work, giving rise to long commutes and contributing to traffic congestion.
6. Florida’s 8.6 million property parcels have a net worth of $1.1 trillion; of that, $520 billion represents single-family homes. All real property generates about $13.6 billion in tax revenues for schools, roads and other essential infrastructure and services. Last year, 63,516 million square feet of commercial real estate was developed in the state. This year, the amount is expected to increase by 10 percent, with 69,685 million square feet under construction.
7. The real estate industry in Florida puts people to work, generating 1.3 million jobs that pay $24.7 billion a year in salaries. The addition of just 100 new homes contributes $10 million to the local economy, generates $1 million in tax revenue for local government and creates 257 full-time jobs.
8. Homes continue to drive the local economy long after the sale is closed. Buyers of existing homes spend an average of $3,766 to furnish, decorate and improve their properties during the first year of ownership.
9. Numbers are only part of the value of real estate, since there are numerous intangible benefits. Research shows that homeowners vote in local elections 15 percent more often than renters; children raised in owned homes are more likely to stay in school and graduate high school; and children raised in owned homes have a higher lifetime annual income.
10. Florida’s rapidly growing population means a greater demand for housing. Nationally, new household formations are expected to average between 1.3 and 1.6 million per year during the next decade. Sensible growth management policies can help meet housing needs while preserving the state’s natural environment — its coastlines, forests, lakes and wetlands that define Florida to visitors and residents.
“Affordable housing, private property rights and maintaining a high quality of life for all Florida residents — these are just some of the issues that the Florida Association of Realtors and its 105,000 members strive to protect and enhance in communities across the state,” Grooms says.