Earlier this month, the Florida Chamber Foundation held its annual Florida Economic Outlook & Jobs Solution Summit via virtual programming. The purpose of this event is to provide Florida residents and affected entities with a glimpse into the opportunities and challenges Florida’s economy is facing on the road to 2030. Led by leading economists and industry experts, the program featured an exclusive 2023 Florida economic forecast, a national economic outlook, and invaluable insight into Florida’s evolving workforce needs, population growth, housing trends, and other economic points of importance.
The factors discussed in this session hold valuable insights into the future of the commercial real estate market. Some of the more relevant topics concerning CRE include population growth and job creation, residential sales, and states with largest volumes of in-migration
Population & Employment
National economic data revealed that Florida currently leads in both population growth and job creation. With an annual population increase of 1.9%, Florida outpaced the nation’s population growth by nearly 500% in 2022. It was no surprise that this would lead to a tremendous increase in job creation as well.
At an excellent 4.69% annual growth rate in job creation, Florida trailed just behind Texas’s 5.05% growth rate. It is common knowledge that real estate is space for people. When you connect the dots, increased employment and population growth are directly correlated to an increased demand for commercial real estate.
Residential Real Estate
We don’t often talk about residential real estate in CRE but as stated, more people means more demand for commercial real estate. Without homes, we cannot have people.
During the session, Dr. Brad O'Connor, Chief Economist of Florida Realtors noted that, as a result of higher interest rates, home sales are declining significantly. This has huge implications for current and future Florida residents. Another reason for this drop-off is the significant increase in the cost of homes we’ve seen in the past few terms, specifically within Central Florida, but in the rest of the state as well.
In-Migration
Lastly, it is important to point out the amount of in-migration Florida has experienced over the past year. Individuals and families all over the country have recognized the tremendous economic opportunities that lie within our Sunshine State which has led to a huge influx of outsiders becoming Florida residents.
(note: New York was too high to fit on chart)
Top Predictions for 2023
Based on the conclusions drawn by the Florida Chamber Foundation, here are our top economic predictions for the coming year:
- Increased population and employment will promote higher demand for commercial real estate.
- Unemployment will continue to decline.
- Inflation will continue to weigh in on investment decisions.
- In-migration will create an influx of job positions over various industries.
Takeaways
It is good to be in Florida. It is an even better place to be for commercial real estate. As our population continues to grow, we can expect to see more demand for land and commercial real estate.
If you are interested in getting involved with this industry, but are unsure what decision is best for you, contact one of our experts today. The SVN | Saunders Ralston Dantzler team is dedicated to serving clients in all aspects of investment, property management, and business development.