By Carole Hawkins, [email protected]
Last year jobs in Florida grew, the stock market rose and gas prices dropped, all pointing to a bright future for real estate.
While, 2014 was a very good year, John Tuccillo, chief economist for Florida Realtors, said, “I can say honestly that I believe 2015 will be better.”
The state real estate association’s top economist was a speaker at the 2015 Northeast Florida Real Estate Symposium, held in February at the University of North Florida.
Tuccillo forecasted a 10 percent increase in the number of home sales for Florida in 2015 and a 4.5 percent increase in home values, which is a return to historical growth rates.
There are four main forces that affect real estate in Florida, and all are experiencing fair winds, Tucillo said.
Population growth
One of the fastest growing states in the country, in an unprecedented reversal, Florida lost population during the recession.
Now, growth has returned. Florida in 2014 passed New York as the third most populated state in the nation. New York, incidentally, is also the top state from which Florida draws its new residents.
Employment growth
Tuccillo called it the “single most important factor in the demand for real estate.” Florida has been creating jobs since 2010, with trade, professional services and leisure and hospitality sectors growing the fastest.
Jobs are now growing across all sectors, something that bodes well for the economy as a whole and for real estate, Tuccillo said.
Stock market
A rising stock market injects retirees and luxury home buyers into Florida’s real estate market, Tuccillo said. The trend line for closed sales above $1 million in Florida tracks closely to that of the Dow Jones Industrial Average.
Mortgages
Mortgage rates have been “crazy” low for years, Tuccillo said, and everybody expects them to go up at some point. But this year, they will only inch up at the most, he said.
The bigger issue in real estate will continue to be the accessibility of mortgages.
“It’s a legacy of the Great Recession,” Tuccillo said. “Qualifying standards are now much higher.”