1.
Not Making Any More
It’s
usually recited about beachfront property, but there’s an old Real Estate
Adage: “They’re not making any more of it.”
That
has never been truer than it is Fort Lauderdale, the primo location in the
state of Florida. There is only so much land. Broward County is not large to
begin with, approximately 27 miles north and south, perhaps 45 miles east to
west. However, around 60% of this geographic area are wetlands which cannot be
developed without cutting off their own water supply. They can no longer build
any anything else beyond the Sawgrass Expressway and US-27, which are somewhere
between 10 and 15 miles from the coast. So the entire county is 1,320 square
miles with 115 square miles of water. Boil it all down this leaves only 471
square miles of developable dry land.
At
this point this developable land is now 99% developed. There are no more swaths
of scrub forest east of US-27 and the Sawgrass which can be bull-dozed into
housing projects. Drive the Sawgrass through northern Broward you see housing
developments and commercial properties along the east side of the road, and along
the west side of the highway it is literally The Everglades – whip grass,
wading birds and alligators.
2.
Come On Down
Withn
a year or two Florida is expected to surpass New York as the third most
populous state in the nation. Well, you never have to shovel sunshine off your
driveway. Admittedly the population is increasing rapidly through central
sections of the state, but Broward County is arguably the most desirable part
of Florida. In 1960 they took the Census, there were 60,000 residents. Ten
years later in 1970 there were 600,000. Currently the population is around 1.75
million and projected to climb to almost 2.3 million by the year 2020.
That’s
550,000 more people – or an additional 31.4% – moving into the same 471 square
miles of dry land.
3.
Location, Location, Location
In
addition to geographic limitations and population growth projections we also
took note of some intruiging statistics compiled by the Florida Association of
Realtors concerning the continued rise in the median price for both single
family homes and condominiums.
Below
are links to the November 2013 summary report for sales of single family homes
and condos across the state. Click on the links if you wish to see these
reports, but I can save you the trouble. They show the median price increased
13.3% year over year (from November to November) in single family, and 17.2% in
condos.
Florida Single Family Summary Nov 2013
Closer
analysis of these numbers confirms an assertion I have been telling my clients
for the last couple years – that the better properties will outperform the
statewide average.
This
is illustrated in the two reports below
Look
at the November 2013 reports for sales in the reporting area of Miami, Fort
Lauderdale and Pompano. Median Price went up 20% (again year to year, from
November 2012 to November 2013) in single family and 23.6% in condos.
These
numbers are a bit skewed, for the reporting area is quite large, encompassing
all of Miami-Dade and Broward Counties. However, were you to distill them down
to Broward County, the best location within that reporting area, these numbers
would undoubtedly go up even further. And if we could isolate the east side of
Fort Lauderdale, higher still.
4.
Equals Four
Talk
about a No Brainer, this would seem to be a simple matter of connecting the
dots, what this should mean for property values in Fort Lauderdale and throughout
Broward County. 1) We don’t have much land. 2) Population is growing. 3) Demand
is increasing. And 4) Prime property will outperform the overall average.
Add
these factors up significant appreciation in property values seems relatively
inevitable. In addition, whatever rate of appreciation you might wish to
forecast for the overall county-wide average, it shall be markedly greater in
prime real estate – waterfont homes, oceanfront condos, houses and townhomes in
nice nieghborhoods along the coast.
