What Lies ahead for South Florida’s Economy in 2017?
As we begin to work our way through the leftovers of Christmas dinner (turkey sandwiches for days!), media outlets of all kinds are running down what happened in 2016. The real estate market in Florida is mostly seasonal, that is to say, it depends on the seasons of the year and the mobility of the population due to familiar situations like change of works or search of new schools. Real estate market statistics are calculated on the basis of certain indicators, such as information on foreclosures (houses that the bank is going to repossess in the near future), short sales, and REO (houses already owned by the bank) to analyze the percentage of desperate sales and make a graph that guides us on the market trend.
They are also looking forward into the New Year, attempting to predict what might happen in the coming months.
If you call South Florida home like Marc J Leder does, you may be wondering if the strong performance witnessed in 2016 will be repeated in 2017.
In this post, we’ll run down the factors that we expect will have a significant impact on this region’s fortunes this year.
Another year of strong growth
According to Wells Fargo, South Florida is expected to achieve a growth rate of approximately 3.3% in 2017.
Much of this progress will occur due to this region’s popularity with Baby Boomers, who are in the process of cashing out of their homes and moving here to retire.
All these new arrivals will need places to live; this fact of life is expected to keep the home building industry busy in 2017, along with the host of retail businesses that are expected to pop up in response to this surge in population growth.
Although the strengthening dollar is expected to hurt foreign tourist arrivals to the Sunshine State, the strong state of the American economy is expected to boost domestic numbers, which will help the Florida tourism industry have another solid year.
The housing market may cool slightly
Although Florida’s economic fundamentals appear to be moving the region towards another strong year of sales, the recent rapid increase in home valuations might end up pricing out certain segments of South Florida’s population out of the market in 2017.
The average sale price of a home has increased 8% in each of the past two years, pushing valuations to loftier levels than those of several years ago. As an example, the average home in the Fort Lauderdale area now costs roughly $278,000.
These price points will make it difficult for average working-class families to afford a starter home, a fact that many economists say will lead to a cooling housing market in 2017.
Activity is expected to remain brisk in other income brackets, however, which is good news for local homeowners looking to cash out of their current property.
Exports to South America will likely be lower
A significant chunk of South Florida’s economy is based on exports to Latin American countries.
Unfortunately, growing uncertainty over the global economy has dampened demand, leading to an 8.7% drop in exports through the first six months of 2016 compared to the year before.
Some analysts are concerned, as this segment of the economy was responsible for over 53 billion dollars in revenue in 2015, which represents roughly 6% of Florida’s overall economic output.
Despite these dark clouds on the horizon, many area entrepreneurs are optimistic about 2017.
According to the results of a survey released in September, 65% of business owners in South Florida reported increased revenues over the first six months of 2016 compared to the year before, while 67% had plans to hire staff in the months to come.
While some businesses may be affected by global uncertainty in the near future, it would appear that others have good reason to expect 2017 to be a great year for them.