The Florida real estate markets, much like markets elsewhere, fluctuate over time. There are distinct differences between the commercial and residential real estate markets in the Sunshine State.
Those looking to invest in real property or to pursue a career as an agent may need to learn about the markets and what to expect from them in the near future. The residential real estate market is where people list single-family homes for sale. The commercial real estate market contains multi-family dwelling units, retail space, office buildings and manufacturing or industrial facilities.
What other differences are there between the residential and commercial sectors?
Commercial real property typically costs more
When looking at the cost per square foot to acquire real estate, it quickly becomes clear that commercial real estate is usually far more expensive. Pricing for properties and the speed with which they sell depends on factors including property condition and location, as well as demand in a particular sector of the commercial real estate market.
In recent years, retail properties have seen particularly high demand. On the other hand, demand for office space is not as strong as it was during the 00s or 10s. Demand for multi-family rental units tends to remain consistent.
Many businesses prefer to lease commercial real estate as opposed to purchasing it, meaning that ownership doesn’t necessarily change hands every time new tenants take possession of specific properties. Commercial real estate is likely to belong to a business rather than an individual, although individuals do acquire commercial real property as investment holdings or as locations in which to operate their businesses.
Residential real property fluctuates
Generally speaking, demand for residential property remains consistently high. However, the price has to reflect what people can afford and demand in specific areas. After years of price increases and strong demand, residential real estate in Florida may see a cooling-off period according to professional evaluations.
Prices may stagnate or drop over the next year, and individual listings may take longer to close because of reduced buyer demand. Overall, thankfully, Florida generally has one of the strongest real estate markets in the nation thanks to demand for vacation homes and those retiring to a warmer climate after living elsewhere.
Agents representing buyers or sellers on the Florida residential or commercial real estate market generally need to track the markets carefully to offer their clients the best possible guidance. They may also want to partner with real estate lawyers to create bespoke documents and review closing paperwork for the protection of their clients. Securing the right support can take some of the risk out of assisting people navigating the residential and commercial real estate markets.