New economic reports released Tuesday paint a complicated, but positive, outlook for Orlando’s economy over the next few years.
First, UCF economist Sean Snaith reported that Florida’s economy is expected to grow at a faster pace than the nation’s, over the next four years. Much of that optimism is based on job growth expectations and the housing market.
But a national real estate company, ApartmentList.com, also released a report showing that high rents are a serious problem in Orlando: “Many renters struggle with affordability. In Miami, Los Angeles, and Orlando, for example, more than 55 percent of renters were cost-burdened in 2014, spending more than 30 percent of their income on rent.”
Snaith sees continued population growth for the state, which is good for housing. But much of that growth will come from retiring Baby Boomers moving to the state.
Nationwide, from 1960 to 2014, Apartment List found that inflation-adjusted rents have risen by 64%, but real household incomes only increased by 19%.
“Our data suggests that cities on the coast could do more to increase rental supply, while parts of the South and Midwest need stronger wage growth,” Apartment List’s news release said.
According to the UCF forecast, Florida’s economy is expected to expand at an average annual rate of 2.9 percent through 2019, outpacing the projected average for U.S. real Gross Domestic Product.
Snaith noted that Florida faces a shortage of single-family housing shortage due to the shrinking inventory of existing homes and a pace of housing starts that trails growth – which is rapidly pushing prices up in the single-family market.
“While this looks like another housing bubble, it’s really just an old-fashioned shortage in the single-family market,” Snaith said. “It is expected to correct itself as new housing starts ramp up over the next few years.”
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