The Relative Inevitability of Appreciation in Fort Lauderdale Real Estate

Over the past few weeks a series of interesting statistics have been released. Taken individually these numbers are all compelling on their own, but when you add them all together I think they paint a pretty clear picture of what’s in store for the Fort Lauderdale Real Estate market.

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

 

Florida Condo 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.

Fort Lauderdale Single Family Summary Nov 2013 

Fort Lauderdale Condo Summary Nov 2013

 

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.