UF Study Finds Florida's Home Ownership Rate Exceeds The Nation

October 13, 1998

GAINESVILLE — Despite its image as a condominium haven for retirees and the footloose, Florida is really a down-home state with record numbers of homeowners, a new University of Florida study shows.

The latest figures estimate the state’s home ownership rate at 68 percent for 1995, above the national average of 65 percent, said Wayne Archer, a UF business professor who did the study. By 2010, nearly three-quarters of Floridians (71 percent) are projected to own homes.

“Home ownership is very much influenced by the age of the household; the older the household the greater the probability of owning,” Archer said. “The fact that we have a larger older population creates a higher rate of ownership.”

Florida’s housing market will add between 1.75 million and 2 million housing units between now and 2010 — strong but relatively flat growth compared with the 1970s and 80s when the state’s population rate exploded, he said.

Reflecting the aging of the baby-boom population, the largest growth in households is expected for the 45-to-64 age group, which accounts for a projected increase of more than 1.1 million households, he said.

Despite predictions of appreciation at or slightly less than the rate of inflation, Florida’s housing prices have an edge over the rest of the nation because the state’s building costs are so much lower to begin with, Archer said.

“Compared to the Northeast or a place like Denver, where water is scarce, Florida has a lot of land and water,” he said. “When you look at cities such as Orlando or Jacksonville, there are places to put homes. Even in the northern part of the Gold Coast — Martin County and northwest Palm Beach county — there is available space. For the time being, that will help us to keep fairly competitive house prices.”

Also helping to boost Florida’s home ownership are technological advances that have freed more companies and people to move where it is pleasant and the climate favorable, Archer said. Corporations on Wall Street, for example, can easily move their operations to cities such as Tampa or Orlando, he said.

Such draws are important considering that incentives to home ownership as a hedge against inflation have diminished over time, Archer said. Under the current federal income tax code, for example, more and more households use the minimum standard deduction because they don’t have enough other deductions to itemize, causing them to lose the benefits of mortgage payments, mortgage interest and property tax deductions, he said.

But when people do buy homes, they stay in them longer than expected, shows the study, titled “The State of Florida’s Housing 1997.” “There’s a perception that people sell their home on average about every seven years or so,” he said. “We found that the turnover rate is lower, in the range of 12 years.”

Home sale prices differ sharply from one Florida city to another. Counties with the highest median prices are Monroe ($169,792), Collier ($139,184), St. Johns ($128,756), Martin ($124,167) and Palm Beach ($122,785). Those with the lowest median prices are Dixie ($28,636), Madison ($35,385), Liberty ($35,556), Hamilton ($36,667) and Holmes ($37,826), the study found. The state’s four hottest markets between 1991 and 1996, in terms of appreciation rates, were Naples (4.48 percent), Gainesville (4.43 percent), Panama City (4.36 percent) and Miami (4.08 percent).

Ten years from now, the biggest sales trend is likely to bein high- density housing, he said. As land becomes scarcer and aging baby boomers tire of maintaining large yards, two-story homes on small lots will be in greater demand, he said.

Archer did the study with David Ling, a UF business professor, Marc Smith, associate director of UF’s Shimberg Center for Affordable Housing and Dean Gatzlaff, a Florida State University business professor.