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Best Cities for Homeownership in Florida

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Florida home values dropped by half during the Great Recession but then came back swinging, rising 73% from 2012 to 2017, according to the National Association of Realtors. Lately, however, price growth has slowed in the Sunshine State, and the National Association of Realtors predicts only a very slight rise in the median home price this year.

With prospects for home appreciation in Florida no longer as lofty as they once were, some buyers may be wondering whether this is still a good time to invest in the state. For them, the answer will depend on where they’d like to live and whether they’d be willing to broaden their search to include some of the state’s lesser-known communities.

A new study from LendingTree used U.S. Census Bureau data collected in both 2013 and 2017 to compare 29 Florida cities that are either part of a metropolitan statistical area or a micropolitan statistical area of 10,000 to 50,000 residents. The data was collected from the U.S. Census Bureau’s annual American Community Survey. It focuses on some of the qualities homeowners value the most, such as appreciation in home values, average commute times, local unemployment rates and the overall cost of housing, which can include expenses such as mortgages, utilities, taxes and insurance.

Here is what our study found:

Key findings:

  • The North Port-Sarasota-Bradenton metro area is the highest-ranked metro area in Florida. This area has a high median home value ($225,900), a relatively low unemployment rate for the state (6.1%), a median home value appreciation from 2013-2017 of 23.78% and a reduction in median housing costs during the same period (-6.6%).
  • The Key West micro area is the second best place for homeownership in Florida. Key West has the highest median home value ($432,900), the lowest unemployment rate (3.7%) and the shortest average commute time (17.8 minutes). The only reason it did not get the top spot was its rising housing costs (6.16% from 2013-2017).
  • The Palatka micro area is the worst place for homeownership in Florida. Palatka has a low median home value ($97,700), high unemployment of 10.3% and decreasing home values (-2.01% between 2013 and 2017).

The best cities for homeownership in Florida

1. North Port-Sarasota-Bradenton metro area

This metro area on the Gulf of Mexico coast ranked highest for owning a home. From 2013 to 2017, the median home value rose 23.78%, while housing costs dropped 6.6%, and that combination helped push North Port to the top of our list. In 2017, the median value for a home in the area was $225,900, which put it within the top five Florida cities we surveyed. Compared to other Florida cities, unemployment was relatively low, at 6.1%.

2. Key West micro area

This micro area consists of the Florida Keys and the rest of Monroe County in southwest Florida. Homes here didn’t rise in value as much as they did in the top-ranked North Port-Sarasota-Bradenton area. Still, the 14.37% uptick was enough to give Key West the highest median housing value of any Florida city on this list ($432,900). In 2017, this area also had the lowest unemployment rate (3.7%) and the shortest average commute time (17.8 minutes). One drawback is rising housing costs: Between 2013 and 2017, housing costs decreased in almost every Florida area we studied, but they grew 6.16% in Key West.

3. Naples-Immokalee-Marco Island metro area

This metro area along Florida’s Gulf Coast encompasses the city of Naples, Marco Island and the inland rural community of Immokalee. Home values here also rose sharply between 2013 and 2017, with a median value appreciation of 21.91%. As with most Florida cities on our list, housing costs also dropped during that time, by 4.45%. In 2017, the unemployment rate was a relatively low 5.3%.

4. Orlando-Kissimmee-Sanford metro area

The metro area surrounding Orlando saw the second-biggest fall in housing costs of any Florida cities we surveyed, with the median cost decreasing 8.99% between 2013 and 2017. During that time, homes here still managed to appreciate nicely, with a median increase of 13.52%. In 2017, a home in the Orlando area had a median value of $192,300, not as high as the first three cities on our list, but still high for Florida overall. However, in 2017, commuters here also had the longest average commute of any top 10 city on our list (28.2 minutes).

5. The Villages metro area

In this expansive, central Florida planned community that’s popular for retirement, homeowners also saw the value of their home jump between 2013 and 2017, growing an impressive 24.5%. In 2017, a home here had a median value of $242,400, and the area had an unemployment rate of 6.6%, low compared to some other cities on our list. Unlike most Florida cities on this list, The Villages saw a slight rise in housing costs (0.96%).

6. Cape Coral-Fort Myers metro area

Between 2013 and 2017, home values in this southwestern Gulf Coast area grew a median of 27.7%, the highest rate of appreciation of any Florida area we studied. Also impressive: Housing costs fell 6.56% during the same time period. Still, unemployment in 2017 was slightly higher here than for the first five cities (7.1%), and the area also had the second-longest average commute time after Orlando (27.2 minutes).

7. Crestview-Fort Walton-Destin metro area

Home values in this part of the Florida Panhandle didn’t appreciate as much as they did in other parts of Florida between 2013 and 2017, but they still grew a median of 11.47%. During that time, the median cost of housing dropped slightly, by 0.98%. Crestview’s ranking got a boost from its relatively low unemployment rate, which was 6% in 2017. In 2017, the median value of a home here was $209,900.

8. Panama City metro area

This metro area is also on the Florida Panhandle, but east of Crestview and Fort Walton. Homes here grew in value by about 8.32% between 2013 and 2017, while housing costs dropped 2.91%. This area’s ranking got a lift from both its relatively low unemployment rate of 6.3% and low commute time, which averaged just 22.8 minutes in 2017. That year, the median home value in Panama city was $177,000.

9. Sebastian-Vero Beach metro area

This part of central Florida’s Atlantic coast saw housing costs drop an impressive 6.36% from 2013 to 2017, along with a decent uptick in home values (7.96%). In 2017, the average commute time here was one of the lowest on our list, 22.4 minutes, and the median home value was $176,400. One potential concern: In 2017, this area had a relatively high unemployment rate (8.2%).

10. Punta Gorda

Home values in this Gulf Coast area north of Cape Coral and Fort Myers grew a median of 15.84% from 2013 to 2017. During the same time, housing costs fell an impressive 7.44%. Still, Punta Gorda’s ranking took a hit from its relatively high unemployment rate of 8.9%. Commuters here took an average of 24.7 minutes to get to work, which means they may have had an easier time than those around Cape Coral.

Homebuying tips for Florida

If you’re looking to buy a home in Florida, consider starting with one of the top 10 areas listed above. Eight of these areas recently experienced double-digit growth in home values, and the other two — Panama City and Sebastian-Vero Beach — also saw positive home appreciation.

Florida home values are expected to see more modest increases this year, but some areas may see stronger growth than others. For example, Realtor.com predicts two of the top 10 best-performing real estate markets in 2019 will be in Florida, with the Lakeland-Winter Haven area topping the list and the Miami-Fort Lauderdale-West Palm Beach area expected to come in ninth. Realtor.com expects existing home sales and median price increases in both areas to be much better than the national average.

In a recent study, LendingTree found that for Americans considering moving out of their respective states, Florida is the top pick for residents in 15 out of 50 states. Because Florida’s housing market is both diverse and attracts so many buyers from out of state, it may be worth your time working with a local real estate agent who knows the market that interests you and who can help you make a competitive offer.

If you’re a first-time buyer, consider looking into the state and regional programs that may help make it easier and more affordable to buy and own a home in Florida. The Florida Housing Finance Corporation, for example, offers down payment assistance for first-time homebuyers of up to $15,000, as well as 30-year, fixed-rate mortgages through the Florida Homebuyer Loan Program.

As our study shows, the cost of housing has dropped in many parts of Florida lately. With the recent slowdown in price growth, this may be a good time to look for the city that fits your needs and budget.

Methodology:

The methodology for this study was simple and straightforward.

1: Collect metropolitan statistical areas (“MSAs”) and micropolitan statistical area from the U.S. Census Bureau using 2017 population data.

2: Each MSA and micropolitan statistical area was ranked on a scale from 29 (Best) to 1 (Worst) for five different metrics. Those metrics are:

Median Home Value (29-Highest Value, 1-Lowest Value)

Unemployment Rate (29-Lowest Rate, 1-Highest Rate)

Average Commute Time (29-Shortest Time, 1-Longest Time)

Median Home Value Appreciation (2013-2017) (29-Greatest Appreciation, 1-Smallest Appreciation)

Median Change in Yearly Housing Costs (2013-2017) (29-Smallest Cost Change, 1-Greatest Positive Cost Change) — The formula for this metric is:

(((Monthly Housing Costs for 2017 *12)+(Real Estate Tax for 2017))/ ((Monthly Housing Costs for 2013 *12)+(Real Estate Tax for 2013))-1)

3: An average score was then calculated for each MSA based upon the scores received for each metric.

4: The MSAs and micropolitan statistical area were then ranked on a scale of 1 (Best) to 29 (Worst) based on their average score.

5: All metrics were ranked equally.

Data:

All data were obtained from the U.S. Census Bureau. More information on where the data came from is provided below:

2017 Median Home Value, Monthly Housing Costs, Real Estate Taxes

  • Filtered for all MSAs
  • Then filter for Financial Characteristics for housing units with a mortgage – 2013-2017 American Community Survey 5-Year Estimates

2017 Unemployment Rate and Median Commute Time

  • Filtered for all MSAs
  • Then filter for Selected Economic Characteristics – 2013-2017 American Community Survey 5-Year Estimates

2013 Median Home Value, Monthly Housing Costs, Real Estate Taxes

  • Filtered for all MSAs
  • Then filter for Financial Characteristics for housing units with a mortgage – 2013-2017 American Community Survey 5-Year Estimates
 

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