Economy
More than 1 million people — many of them white-collar professionals — have moved to the Sunshine State since the pandemic began, helping prop up the local housing market
By Abha Bhattarai
May 24, 2023 at 6:00 a.m. EDT
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Debbie and Jeff Stevens retired last year, and immediately began plotting a cross-country move from Washington state to Florida. They pictured a waterfront condo in Clearwater with sprawling views, a swimming pool and tennis courts.
But, they quickly learned: All of that would come with a price.
Even with their $1.2 million budget, the Stevenses kept coming up empty, or getting outbid. This month, they finally found a two-bedroom waterfront condo that met their requirements — and made an offer, without setting foot inside.
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“We saw it on FaceTime and put in an offer within the hour,” said Debbie, 65. “It was so difficult to find what we wanted. I kept thinking, ‘What? I thought the housing market was calming down. This is crazy.’”
The U.S. housing market has slowed considerably in recent months, with many parts of the country in a full-blown housing slump. Prices of existing-homes sales fell 1.7 percent in April, marking the sharpest annual decline in more than a decade, according to the National Association of Realtors.
But not in the Sunshine State, where a steady stream of new residents is continuing to prop up home prices in 11 metro areas, including Miami and Naples. The median home sales price in the state was $410,000 in April, flat from a year ago, but up from $405,000 in March, according to data from Florida Realtors, a trade association.
Although there are signs that prices are beginning to moderate, many economists say the Florida housing market has held up remarkably well, particularly compared with other pandemic hot spots, such as Seattle, Austin and Silicon Valley, where home prices have fallen about 12 percent in the past year, according to Black Knight, a mortgage technology and data provider. As a result, although Florida bore the brunt of the 2008 housing crash, the state appears to be insulated this time around.
Are home prices falling? See what it’s like in your area.
“Prices in Florida are still going up, which is really shocking because home prices in many parts of the country, particularly out west and along the coasts, are coming down,” said Ken H. Johnson, a real estate economist at Florida Atlantic University in Boca Raton. “Not only are we short of housing units, but we’re seeing extraordinary population growth. Put those two things together, and you get unaffordable housing.”
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The pandemic spurred nearly 1 million people to move to Florida from 2020 to 2022, transforming the state’s economy and rocking its already hot housing market. Florida’s population grew by nearly 2 percent last year alone, faster than that of any other state and five times the rate of national growth, Census Bureau data shows. Much of that growth, economists said, has been propelled by an influx of white-collar professionals who’ve decided that if they can work from anywhere, they’d like to log on from the beach.
Businesses also are heading to the shore: Hedge fund giant Citadel, Windstar Cruises and fitness chain Barry’s all recently moved their headquarters to Miami. Asset management firm ARK Invest left New York for St. Petersburg, while InnovaCare Health relocated from White Plains, N.Y., to Orlando.
“We are seeing a significant evolution of our economies, especially in Orlando, Tampa, Southeast and Southwest Florida,” Johnson said. “Tech firms and health-care companies are moving in. And it seems like every day, a new hedge fund or finance house opens a new branch or moves its whole headquarters here.”
As a result, Florida prices have remained surprisingly buoyant, even as high interest rates have dragged down inventory and sales.
Although many cities nationwide are seeing steep monthly drops in housing prices, as much as 8 percent in a month, home prices rose in at least 11 Florida metro areas, including Miami, Fort Lauderdale, Pensacola, Naples, Tallahassee and Sebastian, between February and March, according to data from Moody’s Analytics. Sebastian and Vero Beach, on the state’s east coast, saw some of the biggest gains, with prices up nearly 6 percent between February and March, and 9 percent from last year.
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“If you’re looking at the beaches or coastal areas, it’s still a fistfight with multiple offers,” said Cyndy Tomassetti, a real estate broker associate in Jacksonville Beach. “People move here thinking it’s going to be cheap, but it might as well be Aspen.”
About 70 percent of her customers are from out of state, she said, and are moving for jobs at some of the area’s largest employers, including CSX, Johnson & Johnson and the Mayo Clinic. Often, they have little time to find housing and don’t mind paying a premium, especially if they’re moving from pricier markets such as Seattle or San Francisco.
Ryan Lutz and his wife, both software engineers, moved to Land O’ Lakes, north of Tampa, early last year from a Minneapolis suburb, in large part because Florida doesn’t have a state income tax. Both had gotten high-paying remote jobs during the pandemic and wanted to stretch their money.
“It got us thinking, ‘Why in the world are we paying 8 percent state income tax and dealing with negative-40-degree winters?’” said Lutz, 37.
The couple bought a $900,000 lakefront house in a gated community with a swimming pool and hot tub, which Lutz calls “a little patch of paradise.” Culturally and politically, though, it’s taken some getting used to.
“It’s a stark difference, and the attacks on education, women and LGBT folks don’t sit very nicely with me,” he said. “But then, it’s hard to be too mad at the world while you’re cruising around a lake on a Jet Ski.”
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The Federal Reserve has raised interest rates 1o times in the past year, causing mortgage rates to double to 6.4 percent for a 30-year fixed mortgage. That has had a chilling effect on the housing market. Overall U.S. home sales have plummeted 3.4 percent in the past year, as Americans rethink their plans.
Wealthy buyers, though, are increasingly eyeing Florida real estate as an investment opportunity. Rafael Corrales, a Redfin real estate agent in Miami, said there’s been a spike in foreign investors from Latin America, Asia and Europe, coming in with all-cash offers, which is helping keep prices high.
“When interest rates started rising last summer, it was like an automatic switch: Mortgage applications dropped, which opened the window for cash buyers,” he said. “Investors are saying they’d rather park their funds in tangible real estate here than deal with turmoil in the banking system.”
But just because prices have so far held steady doesn’t mean they won’t eventually tumble. Housing economists cited a number of potential concerns, including an increasingly polarizing political environment and climate change, as factors that could drag down the state’s real estate market.
“Florida really is in the eye of the storm when it comes to climate risk,” said Mark Zandi, chief economist at are, who owns a home in Vero Beach. “You can’t get excess flood insurance anymore. Insurance rates are going up dramatically — and are going to keep going up. That has got to hit home prices sooner or later.”
But for now, many say they’re still being priced out of the local housing market. Tegan and Justin Wolfepack moved to Florida’s Gulf Coast from Denver early in the pandemic.
They were drawn to St. Petersburg because of its beaches, professional sports teams and “good community vibes.” Plus, they figured, they’d be able to save up for a year, then buy a house.
But three years later, those dreams have been dashed. Homes in their neighborhood that sold for $480,000 in 2020 are now on the market for $1.25 million. Meanwhile, their $2,500 rent is slated to go up by 10 percent this year.
“We thought we were going to rent for a year and think about buying, but we were immediately priced out,” said Tegen, 37, a graphic designer. “It’s kind of nerve-racking because we don’t know if there’s anywhere to go anymore.”
For the Stevenses of Washington, the new condo in Florida — which they finally visited last week — represents a fresh start. Debbie worked for years as a nurse, and Jeff as an engineer at Boeing. The pandemic prompted them to rethink their priorities. They sped up their retirement plans and decided that instead of spending winters in Florida, as previously planned, they’d move there altogether.
Their new home overlooks both the Intracoastal Waterway and the Gulf of Mexico. The $907 monthly amenity fee covers a swimming pool, weight room, kayak launch, and tennis and pickleball courts. They’ll be paying more than they did in the Seattle area, but Debbie says, “getting so much more.”
“We decided life is really short and you know what, let’s go all in,” she said. “Instead of maintaining two households and going back and forth, why don’t we just move to Florida?”
FAQs
Will house prices go down in 2023 in Florida? ›
Overall, the Florida housing market is likely to remain strong in 2023, with continued demand for homes and steady price growth. However, the market may begin to stabilize as the growth rate slows down, which may lead to more balanced conditions between buyers and sellers.
Are houses going to keep going up in Florida? ›Over the past few years, home prices in Florida have skyrocketed. Per Redfin data, in the middle of 2020, the median sale price was $275,600 — by April 2023, that figure had jumped to $400,800. The state remains one of the top markets people move to, and its increasing population will likely keep the market robust.
Why are South Florida home prices so high? ›Here's Why Moving South May Be Out of Reach. Florida is one of the most expensive states for housing, and Miami is the least affordable city in the country, according to a report. High demand, short supply, increased migration trends since the pandemic and exploding mortgage rates, make for a pricey combination.
What will happen to the real estate market in Florida in 2023? ›In 2023, experts forecast that the Florida home prices may fall down to 20%. Mortgage Rates Have Almost Doubled: Mortgage rates almost doubled from April 2021's 3.12% to 6.27% for the week ending on April 13, 2023. Sellers are Coming Back, but Slowly: The number of listings dropped by 14.9% in March 2023.
Will South Florida home prices go down? ›While prices may slightly drop year-over-year at some point in 2023, Beracha predicted they won't fall by much. He said South Florida needs between five to 10 years' worth of new housing construction at the pace homes are being built here today. And higher interest rates since early last year have slowed home building.
Will home prices drop in 2024 Florida? ›With mortgage rates declining faster than expected, home prices are likely to remain mostly flat throughout 2024.
Is the Florida housing market cooling off? ›Bank failure fears spreading to Florida's real estate market
"It's definitely cooled down a bit. Gone are the days when we would put properties on the market and we would expect a bidding war within a few days," Sandals Realty Group broker Amanda Glass told FOX Business' Ashley Webster. "It's not happening anymore."
The other reasons that people leave the state after moving here are varied: “A nearly 14,000-member Facebook group for people moving out of Florida has cited severe weather, low wages, crowded beaches, changing politics, and steep housing prices as reasons people left.”
Will Florida home prices drop after hurricane? ›Home prices in hurricane-ravaged areas are 5 percent higher on average than unaffected ones during the three years following a hurricane. After three years, prices return to—but do not drop below—pre-storm levels.
What's the most overpriced housing market in Florida? ›According to the initiative, home prices in Cape Coral are overvalued by 47.22%, while Lakeland, Palm Bay, Deltona and Tampa have home prices overvalued by around 41%. Data shows that renters are also paying more than the average in Florida — with Cape Coral once again being one of the most overvalued places.
Why are Florida closing costs so high? ›
Sellers in Florida pay more in closing costs than buyers do, because sellers are responsible for covering the real estate commission fees on the deal. These typically amount to about 6 percent of the home's purchase price.
Why is Florida so unaffordable? ›Florida is expensive because of its popularity among retirees and tourists. Retirees often have disposable income and spend it on activities like golfing, fishing, and boating. Additionally, housing, food, and healthcare costs are higher in Florida compared to other states.
What is the problem with the housing market in Florida? ›In Florida, the cost of rent has jumped by 36 percent since 2020, with much of the increase occurring in 2021 alone. Rent is not the only portion of Florida's housing market to feel the pressure of increasing prices. The cost to purchase a house has also increased over the past couple of years.
Will mortgage rates go down in 2024? ›Fannie Mae, Mortgage Bankers Association and National Association of Realtors expect mortgage rates to drop through the first quarter of 2024, by half a percentage point to about nine-tenths of a percentage point. Figures are the predicted quarterly average rates for the 30-year fixed-rate mortgage.
What is the average price of a house in Florida? ›Housing costs
All are notably higher than the national median rent of $1,967. On the buyer side, the median home price in the state as of April 2023 was $410,000, according to Florida Realtors — also notably higher than the nationwide median, which is $388,800.
Total residential sales plunged in South Florida in 2022 compared to the prior year, according to the latest sales report by the Miami Association of Realtors. Miami-Dade recorded 32,627 single-family house and condominium sales last year, a 20% drop from 39,394 sales in 2021.
Will 2023 be a good time to buy a house? ›The most recent Homebuyer.com data indicates that, for first-time home buyers, May 2023 is a good time to buy a house. This article provides an unbiased look at current mortgage rates, housing market conditions, and market sentiment.
Will prices go down in 2023? ›In some categories there will be deflation, or an outright drop in price levels. In the charts below, these trends show up as a declining rate of year-over-year inflation toward the end of 2022. By the end of 2023, many and perhaps all of those charts will show negative year-over-year inflation, or deflation.
Where is the housing market cooling the fastest? ›California metro areas are cooling off the most.
In these areas, homes are staying on the market longer relative to a year ago – nearly double the amount of time.
From July 2021 to July 2022, about 319,000 more people moved into Florida than left — the largest net population gain of any state in the country. For context, Texas had the second-largest net inflow: about 231,000 people.
What states are people leaving the most? ›
Top states residents are leaving
The annual 2022 United Van Lines National Movers study is out! But it wasn't good news for New Jersey or New York. A similar report from United Van Lines showed New Jersey as the top outbound state, followed by Illinois, New York, Michigan, and Wyoming.
Florida's population has been growing rapidly since 1946 — in fact, today, it's the fastest-growing state in the nation. Many are drawn to Florida's beautiful beaches, golf courses, scenic nature, affordable living and income tax advantages.
What will happen to Florida real estate after hurricane? ›The most shocking reality of the effect hurricanes have on Florida's housing market is that there really isn't one – there is no real long-term effect on the housing market. There are plenty of short term effects as the recovery progresses, but Florida's housing market recovers relatively quickly from those.
Is it good to buy real estate after a hurricane? ›When homes are damaged or destroyed during a hurricane, it shrinks inventory and this creates more of a seller's market. Construction teams are tied up in repairs and so new construction is hard to find. Typically, after a storm inventory is low, so demand goes up and conversely so does price.
Where is the hottest real estate market in Florida? ›New data shows Orlando continues to be one of the hottest real estate markets in the country.
What is the most affordable housing in Florida? ›- Cape Coral.
- Dunedin.
- Fort Walton Beach.
- Lakeland.
- Vero Beach.
According to worldpopulationreview.com, Hawaii is the most expensive state to live in, with its housing costing three times the national average. New York and California rank as the second and third most expensive states in which to live, respectively.
How much are closing costs on a $300000 house in Florida? ›Closing costs in Florida amount to an average of between 2.5% and 3% of the total loan amount. But that varies from one lender to another and also from one city to another. With an average loan amount of about $300,000, your Florida closing costs can be about $7,800.
What is the average closing fee in Florida? ›In Florida, the average closing costs amount to about 5-10% of the purchase price. Usually, the seller and buyer each pay a portion of these costs. Some of the most common closing costs include: Loan origination fee: This is a fee that the lender charges to cover the costs of processing the loan.
How much are closing costs in Florida if you pay cash? ›Typically, the buyer closing costs in Florida will add up to around 1-3% of the purchase price. Florida buyer closing costs include appraisal fees, loan origination fees, inspection fees, and recording fees. Cash buyers will pay the lowest closing costs. In Florida, cash buyers will pay less than 1% in closing costs.
Will Florida become unlivable? ›
Scientists expect the lower third of the state to be underwater by 2100, according to The Guardian. There are a lot of different scenarios and estimations when it comes to rising sea levels, and some are severe. “In some scenarios, sea levels will rise up to 31in (79cm) by 2060,” The Guardian reported.
What is the most expensive state to live in right now? ›Hawaii. Hawaii is truly a paradise, but it is also the most expensive state in America to live in. The cost of living in Hawaii overall is 86% higher than the national average, and the cost of housing in Hawaii is a jaw-dropping 207% above the national average.
Where is the most expensive place to live in Florida? ›The richest city in Florida is Palm Beach. The median household income in Palm Beach is $169,500. It's also the Florida city with the most billionaires, with an estimated 30 billionaires living in Palm Beach as of 2022.
What will mortgage rates be in fall 2023? ›The Mortgage Bankers Association predicts rates will fall to 5.5 percent by the end of 2023 as the economy weakens. The group revised its forecast upward a bit — it previously expected rates to fall to 5.3 percent.
Will home prices drop in 2023 recession? ›Experts at Fannie Mae's Economic and Strategic Research (ESR) Group believe that the housing market downturn could lead to a “modest recession” overall in the second half of 2023. If wage-related inflation continues, the Fed is likely to maintain its tight grip on economic policies.
How high will mortgage rates go over next 5 years? ›The predictions made by the various analysts and banks provide insight into what the financial markets anticipate for interest rates over the next few years. Based on recent data, Trading Economics predicts a rise to 5% in 2023 before falling back down to 4.25% in 2024 and 3.25% in 2025.
What is a good salary to live on in Florida? ›What is a livable salary in Florida? MIT's Living Wage Calculator says a livable salary for a single person in Florida with no children is about $36,000 before taxes.
How much does the average person make in Florida? ›We found at least 10 types of jobs in Florida that pay more than the state average of $49,481 per year. The top examples of these jobs are Neuroradiologist, Anesthesiologist, and Gastroenterologist.
What is the just value of a home in Florida? ›The just value is the property's market value. The assessed value is the just value minus assessment limitations (see the Save Our Homes section below). The taxable value is the assessed value minus exemptions and is the value the tax collector uses to calculate the taxes due.
Will my house be worth less in 2023? ›Most experts do not expect a housing market crash in 2023 since many homeowners have built up significant equity in their homes. The issue is primarily an affordability crisis.
What should you not do when staging a house? ›
- Do not leave the house empty. (Image credit: Future) ...
- Leaving personal photos on walls. (Image credit: Future) ...
- Not making an effort with tidying. (Image credit: Future) ...
- Don't go overboard on holiday decor. (Image credit: Future / Sussie Bell)
This delay in itself will not cost you extra money, but if the 3-day delay pushes the repayment of the old loan too close to the weekend, you could end up with a longer overlap in interest payments. You will ideally want to sign your documents on a Tuesday or Wednesday to avoid this issue.