Home Articles 7 Things to Know About the Fort Lauderdale Real Estate Market

7 Things to Know About the Fort Lauderdale Real Estate Market

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Understanding the intricacies of the Fort Lauderdale real estate market is a must before taking the plunge and investing in this fashionable area. Known for its nightlife and culture, beautiful beaches, countless shopping possibilities, and canals, it’s no wonder the Fort Lauderdale housing market is booming.

The Fort Lauderdale property market is considered a balanced market for investment and there is stable demand for rental properties. For investors thinking about expanding their portfolio, Fort Lauderdale, FL is a solid option for both residential and commercial properties.

Things to Know Before Investing in Fort Lauderdale

Fort Lauderdale homebuyers will find that investing in a Florida beach town has obvious benefits; a strong rental market, a stable job market, and the option to convert a property into tourist accommodation.

Before purchasing in the Fort Lauderdale area, consider the following:

Real Estate Market Trends 2022-2023

Understanding housing market trends is essential before investing in residential or commercial property in Fort Lauderdale. These figures are taken from data published by the real estate agency Redfin and are correct as of 19 August 2023.

Fort Lauderdale Home Prices and Market Trends

The median home sold price in Fort Lauderdale was $515K—or $404 per square foot—in July 2023, a slight reduction year-over-year. Though this follows the general reduction in the median sale price after the post-pandemic boom, prices are still higher than they were before the pandemic. Lower average prices right now could increase the return on investment for investors looking to rent out their properties.

Competition Level

Despite a growing demand for property in downtown Fort Lauderdale and the trendy beach area, agencies don’t consider the housing market to be overly competitive. Homes for sale in Fort Lauderdale sell within an average of 53 days and receive, on average, only two offers.

Florida’s Economy

Fort Lauderdale boasts a growing, diverse, and stable economy with strong industries like tourism, film and television production, manufacturing, and technology driving economic growth in the area. As well as a booming tourist industry, the area is home to various major corporations like AutoNation and Citrix Systems, which offer stable and plentiful employment.

Additionally, the unemployment rate in Fort Lauderdale is below the national average, indicating a stable jobs market. For investors looking to rent out their property to long-term tenants, this is a big plus.

Tax Savings

Residents in Florida may choose the Sunshine State for the weather, opportunities, or its natural beauty. For investors, however, Florida offers compelling financial reasons to invest such as:

  • The Homestead Exemption and Save Our Homes assessment limitation that may reduce your tax liability on a homestead in Fort Lauderdale
  • No personal income tax
  • No estate or inheritance tax

As a homeowner in Florida, you may also be able to deduct the following real-estate-related items on your income tax return:

  • Mortgage insurance
  • Mortgage interest
  • Property taxes
  • Closing costs and loan origination fees
  • Medically required home improvements

The Fort Lauderdale market, therefore, presents an interesting prospect for property investors, combining low tax with affordable house prices and excellent rental opportunities.

Investors looking to make the most of the financial benefits Florida has to offer can consult a professional at a Florida CPA firm like Alpine Mar. Their experts can take you through all the necessary steps to get the best possible outcome for your investments by helping you optimize your capital gains taxes and alerting you to any other benefits you can take advantage of as a property owner in Fort Lauderdale.

Fort Lauderdale Is Experiencing Population Growth

The population in the city has climbed steadily over the past decade. Projections suggest this trend will continue, bringing in an influx of potential renters. Fort Lauderdale is also a favorite destination for tourists and retirees, opening up opportunities to rent to different demographics.

Florida’s Warm and Sunny Weather

Fort Lauderdale enjoys around 3,000 hours of sunshine per year and is a hotspot for tourism. Many investors have already tapped into the short-term rental market, converting their properties into Airbnb—or similar—accommodations.

According to AirDNA, short-term rentals in Fort Lauderdale have an occupation rate of 65%. This type of setup can be a great choice for investors looking for a second home but who wish to rent it out in the months they’re not in the area.

Strong Rental Market for Tourists and Long-Term Renters

Due to the city’s steadily growing population, it’s likely that the current demand for rental properties will continue. Many reliable workers and families need places to rent. You can satisfy this need by investing in properties for long-term renters.

Fort Lauderdale Has a Growing Luxury Market

Luxury sales can also be an interesting idea for investors who wish to purchase high-end properties. Fort Lauderdale has a burgeoning luxury market in which Broward County saw an 18% rise in luxury property sales in 2022. Several reasons may explain this boom including:

  • The appeal of the area
  • The “spillover” from Miami
  • Lower average prices than Palm Beach
  • The construction of more exclusive real estate
  • The arrival of luxury brands in the area

Seeing that prime locations such as along the seafront are limited, it’s likely that the median listing home price of luxury properties in Fort Lauderdale will increase over time.

Plan for Seasonal Changes

Offering short-term rentals to tourists is, per night, the most lucrative way to rent out a property. Income from tourists however fluctuates greatly and there may be times of the year when your property remains empty.

Despite the climate being one of the area’s biggest drawcards, Florida experiences hurricanes and other natural disasters that can damage buildings constructed with low-quality materials. With this in mind, investors should choose good quality properties that will be less susceptible to damage from the elements.

Fort Lauderdale Is a Great Option for Informed Investors

Fort Lauderdale offers a great opportunity for investors wishing to capitalize on an area with a strong rental market and strong prospects. This city is an excellent option for investors wishing to attract long and short-term renters and would be an asset to any investor’s portfolio.

The luxury market also presents an interesting option for investors, with more affordable prices than Miami and Palm Beach and favorable market forecasts. Investors should conduct comprehensive research with the help of an experienced real estate CPA firm to make informed decisions and ensure the best possible return on their investment.