The City of Ocala is part of Marion County, Florida. It’s known for its lush, stately horse farms, and it lies between three large cities: Jacksonville, Tampa, and Orlando. This geographical location provides the Ocala real estate market with convenient access to state highways and worldwide airports, shipping ports, and the resulting commerce.
Ocala offers good returns for both short-term and long-term rental investors. Based on Mashvisor stats for June 2022, Ocala offers a cash-on-cash return of 3.14% for traditional investors, and 5.43% for AirBnB investors.
This article will provide you with some reasons why Ocala is a great place to invest in real estate. It will also show you some steps to investing in the Ocala real estate market.
About the Ocala Real Estate Market in 2022 and 2023
Ocala is a city in the North of Florida. It’s known for its beautiful horse farms, hence it was named the Horse Capital of the World in 2007. It’s also the principal city of the Ocala Metropolitan Statistical Area.
As Ocala transitions away from a farming economy, the number of non-farming jobs in Ocala increased by an average of 2.2% annually between 2012 and 2017, as reported by the U.S. Department of Housing and Urban Development.
This trend has been responsible for major shifts in the real estate market in Ocala as it has affected the demographics and economy of the city. Major employers of labor in Ocala include Amazon, Cardinal Glass Industries, AutoZone, and Lockheed Martin.
Statistics On The Ocala Real Estate Market
The following data was obtained for the Marion County, Florida Housing Market.
According to the Ocala StarBanner’s real estate report, the number of single-family home sales was up by 13.9% year-over-year in May 2022. The number of condo sales shot up by 71% year-over-year.
The general median price of homes increased by 19% year-over-year, while the median prices for single-family homes increased by 19.37% to $265,000. The median prices for condos increased by 32% year-over-year.
Another report from the NAR shows that there has been a 13.2% percentage increase year-over-year in effective rent in Ocala. Though the commercial real estate market in Ocala was reported as slightly weaker than the overall US real estate market in 2021, reports from 2022 show that the Ocala real estate market is bouncing back.
Are Homes Affordable In Ocala?
Ocala, Florida is one of the most affordable places to live in the United States. In 2020, Yahoo Finance ranked Ocala 10th on a list of the 30 most affordable downtown areas to live in the US.
Redfin reports that the median sale price of homes in Ocala, Florida, was $269,428 in July. This is far more affordable than the median price of a home in the United States, which Redfin estimates to be $412,739.
Right now, homes are still affordable but prices are going up fast. Between July 2021 and July 2022, home prices in Ocala grew by 17% YOY.
Is Crime High In Ocala?
NeighborhoodScout gives Ocala a 9% Crime index rating, meaning it is safer than just 9% of cities in the United States. The violent crime rate in Ocala, according to NeighborhoodScout, is 6.51 per 1000 residents. The US average is 4 per 1000. The property crime rate is 30.46 per 1000 residents, compared to 19 per 1000 for the US and 17.85 per 1000 residents for the state of Florida.
The lower crime rates are found in neighborhoods such as York, On Top of the World, On Top of the World South and Ocala Estates; Montague; Camp Roosevelt; Early Bird/Romeo; Marion Oaks West; Liberty Triangle East and Liberty Triangle North.
In recent years there have been many new developments taking place in Ocala. These developments have changed its outlook from a sleepy area with high crime rates to one that has become more vibrant. One of these is the World Equestrian Center, which opened in January 2021 and is the largest equestrian center in the US.
The Florida Crossroads logistics center, a 1,085,280 square-foot distribution center in Ocala, Florida currently under construction by Red Rock Developments. It is another key piece of the city’s economic development puzzle. This is expected to be completed by the end of 2022 and will employ over 1000 people. There are also a number of planned communities currently under construction in Ocala.
Is Ocala A Good Place To Invest In 2022 And 2023
Based on information from credible sources, we can make forecasts about trends that will characterize the Ocala real estate market in 2022 and 2023. And from our forecasts, we predict a positive outlook for the real estate market in Ocala in 2022 and 2023.
High Home Appreciation
According to data from Ocala StarBanner, in May 2022, the median sale price of properties in the Marion County, Florida housing market was $260,000, up 19% from May 2021. While this is positive news for property owners, it’s not as exciting for renters.
Rent is rising faster in Ocala than the average US rent, according to reports from the National Association of Realtors. This means real estate assets will continue to increase in value.
So what does this mean for you? It means that if you’re looking to buy a house or condo in Ocala within the next few years, now might be a good time to invest!
Influx Of New Home Inventory
The housing market inventory in Ocala is finally showing signs of improvement.
Based on data from July 2022, there has been a growth of 10% Year-over-Year in the New Listing Count in the Marion County real estate market. There has also been a growth of 88.7% YoY in active listing count, meaning that there is less competition for listings as well as more properties for sale.
This means that real estate agents can find more homes for their buyers. That means you can expect to see more properties available in the coming months.
Moderately Large Student Community
Ocala, FL has a moderately large student population.
There are three colleges in Ocala. The College of Central Florida has a student body of 6,605 students. 43% are full-time students. Rasmussen College, Florida has 9055 students with 47.6% full-time. Marion Technical College has 357 students with 72% full-time.
Ocala’s student population has a significant impact on the local housing market.
High Population Growth Rate
The population of Ocala recorded during the 2020 census was 63,591. As of July 2022, that figure is estimated to be 65,047. This means that the population growth rate is approximately 2.3%.
According to a report from U.S News World Report, Ocala FL is the 6th fastest growing city in the United States. This boom in population is partly linked to the low cost of living in Ocala which is relatively lower than most parts of the United States.
Attractive Rental Market
It’s a good time to be a landlord in the Ocala real estate market. 54% of households in Ocala rent rather than buy. And the outlook for the rental property market in 2022 is largely positive. According to the NAR, the effective rent per unit in Ocala for Q2 2021 was $1,152. Zumper estimates that the average rent for a one-bedroom apartment in Ocala is $995.
In Ocala, rental prices have risen by 15% over last year—and they’re expected to rise even higher in 2023. Landlords are unlikely to have many rental vacancies due to the strong demand.
Good Job Growth
In July 2022, the Bureau of Labor Statistics reported a job growth of 2.2% year-over-year, making Ocala one of the fastest-growing cities in Florida.
In 2016, Forbes Magazine named Ocala one of the top 10 metro areas in America for Future Job Growth. It is also worth noting that Ocala’s job growth has been steady since 2012, excluding 2020.
Image Source: Ocala, FL Metropolitan Statistical Area Employment Chart, Bureau of Labour Statistics
Top 5 Ocala Real Estate Market Predictions For the End of 2022 And Into 2023
Low Housing Inventory. Supply Fails To Meet Demand
One of the biggest challenges faced in the Ocala real estate market has been the incredibly low housing inventory.
It’s like this: you have a bunch of people who want to buy homes, and there are not enough homes for them to buy. It’s a classic supply-and-demand situation, except that in this case, the demand is so high that it has overwhelmed the supply.
According to the 2021 NAR report on Ocala, construction activity in the Ocala real estate market has been slower than construction activity nationally. But that was just in Quarter 2 of last year. It’s difficult to predict the pace of housing supply in the coming months.
Also, according to the report, the City of Ocala gave out 5,082 building permits, mostly for single family homes in the second quarter of 2021. Hence, housing inventory is expected to improve in the near future thanks to ongoing housing projects.
Price Appreciation Will Continue
The Ocala, Florida housing market continues to be red-hot as median home prices increased over 19% year-over-year in May 2022, as reported by Ocala StarBanner. Home prices are expected to continue appreciating as demand appears to keep pace with supply.
The median price for homes was in flux between August 2020 till January 2021. Since then, house prices have been rising steadily. It is expected that this trend will continue into 2023.
Average Rent Will Increase As Rental Demand Increases
Ocala is primed to be a strong rental market in 2023.
The Ocala metro area is experiencing strong employment growth. Therefore, it is expected that the average rent will increase as rental demand increases.
Also, with the growing popularity of remote working, we may see a demand for more spacious rentals that have room to accommodate home offices and outdoor spaces.
Decrease In Bidding Wars
The recent economic slump has made buying real estate more complicated than usual. However, it will be a lot easier to get properties in 2023.
Inventory has been low over the last two years, which increased competition for properties.
Although 2023 will still be considered a competitive market, with more inventory available, it will likely become slightly easier for buyers to locate properties without having their offers rejected by sellers.
Days On The Market Will Increase
According to data from Ocala StarBanner, the median days on market increased to 36 in July 2022, a 4% increase from the month prior.
In contrast to that, Movoto found that the median number of days on the market in the Ocala real estate market fell from 110 in July 2021 to 52 in July 2022.
Though the number of days on the market in 2020 and 2021 has dropped significantly, it is expected to increase slightly in the coming months, and even into 2023.
How To Buy Investment Property In Ocala Today
To conclude our guide to the Ocala real estate market, let’s take a look at how to buy investment property in Ocala.
Know Your Budget
It’s important to know your budget before you start looking for an investment property. Understanding the cost implications is the first and most critical step in buying real estate.
There are primarily two types of costs involved in buying a property: one-time costs which involve down payment, legal fees, inspection fees, and taxes; recurring costs i.e. your monthly mortgage, utilities, maintenance, insurance, property taxes, etc.
If you know what type of investment property you want, it becomes easier to calculate your current budget and future expenses associated with this purchase.
Decide On Your Investment Strategy And Property Type
After you’ve decided to invest in the Ocala real estate market, and you’ve sorted out your budget, the next step is choosing an investment strategy.
Investment strategies include buying and renting it out to tenants, fix and flip or buy-and-hold which means buying a home while waiting for its value to increase over time before selling.
Build to rent is another investment strategy where BTR developers offer investors the chance to partner with them on single-family build to rent projects.
After deciding on your investment strategy, choose the property type you will like to invest in. In the Ocala MSA, the primary types of housing are single-family homes, semi-detached or linked, multi-family homes, and condos or townhouses.
Search Out Investment Properties For Sale
If you’re looking for investment properties for sale in Ocala, you can start by checking out real estate ads in local newspapers. Then you can visit the Ocala MLS.
There are online listing services that you can use in searching for properties in Ocala. They include:
Hire a Realtor
When investing in real estate, it’s wise to enlist a professional. Real estate transactions can be complicated and time-consuming, requiring a lot of legal paperwork.
Find a real estate professional that can represent you and help you with the paperwork. There are different ways to find a realtor — While driving through a neighborhood you’re interested in, jot down the names and numbers of realtors whose signs are displayed prominently; open houses are a great way to meet realtors; ask friends or neighbors who they recommend, or check out online services like Zillow or Trulia.
Make an Offer
The final step in buying a property is making an offer to the seller. This can be a daunting task, but luckily for you, your realtor is expected to handle this part for you as they are expertly trained for it.
Review the condition of whatever property you want to buy, and look at comparable property values in Ocala and comparable rents to estimate your potential ROI when coming up with an offer.
If you’re considering investing in the Ocala real estate market, it’s paramount that you know the state of the market and how to invest. And now you have the lowdown.
One of the lowest-risk ways to start your investing journey is by partnering with a build to rent developer. Build-to-rent homes help take away much of the stresses of property management, and they are in high demand right now, especially among millennials who desire privacy and affordability.
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