Real Estate, Including Custom Homes, Are a Real Asset Here in Florida
There are over 80 million homeowners across the U.S., and among the many real estate trends Americans have watched attentively over the last several years, younger homebuyers are on the rise. In fact, according to an April report from the National Association of Realtors®, Millennials make up 38% of buyers, surpassing Baby Boomers as the largest age demographic to invest. And among first-time customers, the strong desire to own a home was the primary reason for their purchase.
The statistics continue and shift over time, but here’s what remains the same – buying a custom home set on beautiful property is one of the most significant financial transactions people and families can make over the course of their lives. At Lee Wetherington Homes, it’s about designing and building a singular “American dream” for our customers, and creating a timeless, enduring investment. Here are a several reasons why real estate, especially a custom home, is a real asset with a track record of reliability that’s worth adding to your portfolio.
Impeccable Custom Homes Appreciate
Among various asset classes, like stocks, bonds, cash and other alternatives, like collectibles and artwork, real estate tends to reign as an effective investment that has steadily appreciated with time. In fact, the St. Louis Fed, known commonly as FRED, notes that in 1963 the median sales price of a home in the U.S. was $17,800 – and steadily rose to $412,300 by the second quarter of 2024, despite navigating eight recessions over the decades.
In some instances, real estate has outperformed the S&P 500 over years-long spans, such as the “Great Moderation” from 1990 to 2006 when housing returns exceeded market returns. Ownership in real estate has also generally proven to be a hedge against inflation. As costs increase for goods and services, so does the value of your home and, in many cases, faster than price hikes.
Florida’s Market Continues to Hold Value
As all of us who live here know, Florida was one of the most popular states for relocation during and after the pandemic. Last year alone, Florida ranked No. 1 in the nation for net migration – and nearly 444,500 people moved to the Sunshine State between July 2021 and July 2022, according to the Tampa Bay Economic Development Council. But there’s more to Florida than relocation from the Northeast and neighboring states.
Strong population increases, a favorable tax climate, such as no state income tax, and remarkable economic growth has made the Sunshine State’s real estate market a solid investment beyond year-round sunny skies and glistening, clear waters. In fact, Florida’s GDP grew by 21.9% from 2019 through the first quarter of 2024 – almost double the 11.1% national rate. And not only is Florida’s economy predicted to grow faster than any other state this year, but its diverse, robust job sectors, from tourism to aerospace, manufacturing and healthcare, play a role in providing stability within the real estate market. While the market can shift at times, historically, these factors have allowed Florida to remain resilient and homes to appreciate long-term.
A Method for Building Wealth – And Mitigating Risk
There are many reasons why a recent Gallup poll shows that 36% of Americans view real estate as the best long-term investment – more so than stocks, mutual funds, gold or cryptocurrencies. When you’re buying real estate, you’re investing in a tangible asset. While the experience of designing and building a custom home can be overwhelming or completely tailored, like our process at Lee Wetherington Homes, it’s a relatively easy asset class to understand. You’re in control, you can resell for a higher value when the time is right, and there are a host of tax advantages to being a homeowner.
Adding real estate to your portfolio is one way of diversifying and reducing volatility – and there are a number of ways to get started, aside from building a custom home. Again, it’s more stable than assets like crypto, which are considered far more volatile than even stocks, with upward and downward movements that can have serious consequences. It’s not only a tried and true way to build wealth and net worth but fulfill your dream of owning property you can enjoy for a lifetime.
