There is increased optimism in Florida real estate market due largely to the defeat of Amendment 4, a new University of Florida (UF) survey finds.
The proposed constitutional amendment would have required a referendum for all changes to local government comprehensive land use plans.
The conclusion of mid-term elections also provided a clearer picture of the future. Moreover, the new governor’s emphasis on making Florida a more business-friendly state, if successful, respondents believe will have a positive impact on the real estate market.
Expectations on the part of respondents for occupancy and rent increased across every property type. The investment outlook rose in a majority of the property types, and the statewide outlook was the highest since the survey’s inception in 2006.
Notwithstanding this positive outlook however, respondents are wary of troublesome economic factors, most notably Florida’s high jobless rate of 12 percent. There are concerns too, with regard to federal, state and local budget issues, said Timothy Becker, director of UF’s Bergstrom Center for Real Estate Studies.
Although the outlook for single-family and condominium sales increased slightly this quarter, Becker said home builders continue to have a negative outlook because financing is difficult to obtain and lower prices in the foreclosure and short-sale market take potential customers away from the new housing market.
Expectations for office and retail occupancy continued to improve, while for apartment occupancy and the industrial sector it was mostly stable, Becker said.
Accordingly, the investment outlook in retail increased for neighborhood centers while declining for the remaining property types.
Land investment and capital availability also rose this quarter. More respondents believe land is beginning to be priced at levels that support longer-term investment, Becker said, despite the fact that lack of financing for land purchases continues to be a concern. The optimistic outlook for capital availability is due in large part to respondents’ belief that future capital availability will increase.
“Respondents believe there is a need to add additional apartment units based on the fundamentals and expect development financing to be available for that sector,” Becker said. “Private equity continues to be plentiful for quality core assets and valued-add assets.”
Expectations for apartment occupancy and the industrial sector were mostly stable.
