Florida Residential Real Estate is Hot, Contentious, and Misunderstood.
After reading this post by @doitvoluntarily, there needs to be some air cleared about some domestic migration patterns and foreign investment into the South Florida Residential Real Estate market. The original plan was to respond with a comment, but the comment was going to be too long and so a blog post was needed (in fact, a series). There are a few things that need to be cleared up about Florida Real Estate and what the actual hottest markets are, who is moving where, and the rationales for it all.
This is Part I of a multi-post series about Florida Real Estate
New Yorkers have been flocking to South Florida for a while.
It is absolutely not a surprise that New Yorkers were moving to Florida. This is a phenomenon that has been happening since the 1980s. They move to Palm Beach, Broward, and Miami-Dade Counties predominantly. Typically, those moving down to these counties are over the age of 50. The younger emigrants are going to Atlanta and Charlotte.
In Palm Beach County specifically, there are many retiree communities that popped up during the 1980s and 1990s and they were located west of I-95 and the Florida's Turnpike. These communities/subdivisions were largely comprised of full-time residents and snowbirds. The local shops and restaurants catered heavily to these communities as they offered Earlybird Specials at restaurants starting at 3 PM, opened familiar restaurants to those from the New York City area, and offered all sorts of services that would cater to senior citizens.
It is a very frequent occurrence that New York based financial firms had offices in the Brickell neighborhood of Miami. Some boutique firms and hedge funds did move their operations to Miami because of the lower income tax rates and executives wanted to enjoy warmer weather all year as New York City temperatures are not as pleasant.
Shrewd investors who have settled into Miami have invested more into the trendy Wynwood neighborhood of Miami to invest in residential real estate and attract cash flows from tenants wishing to live in rapidly growing and gentrifying neighborhood that is connected to the Miami Metrorail.
New Yorkers are also moving to Orlando (especially Disney Adults), Tampa, and Treasure Coast areas. Younger New Yorkers did move to Orlando and Tampa, but Atlanta, Charlotte, and the Research Triangle attracted far more because of the lifestyle and career opportunities.
Midwesterners Have Long Preferred Southwest Florida
Midwestern retirees and those inching closer to retirement commonly settle into Southwest Florida and have flooded Cape Coral, North Port, Sarasota, and Naples. These are areas that were heavily damaged by Hurricane Ian as wind and flood damage destroyed homes that were perilously on the water. Many in this region did not receive insurance payouts in a homeowner's insurance market that has many insurers completely out of the market entirely and the news of an insurer exiting the market has become a common news story every 3-4 months. For many who are moving to this region, they are coming for the political and cultural camaraderie as they seek to be around like-minded people in a warm climate and disregard the risks and costs involved.
The Bubble That is The Villages
The effective advertising campaign on Fox News and Conservative Talk Radio resulted in a huge demand for living in The Villages (a 55+ community and fastest growing city in Florida), a city/community located an hour north of Orlando in Sumter County. The best explanation for The Villages phenomenon is actually found in this documentary below. The story of retirees who have estranged relationships with their children is not anecdotal, it is quite common.
Foreign Investors
It's far cheaper to invest in a home in Miami and Fort Lauderdale than other major cities in the world. Throw in the Homestead Exemption and the fact that foreigners have no barriers to investing in property and financing in the United States, it is no wonder that there is a draw in the Sunshine State.
Miami, Miami Beach, North Miami, and Fort Lauderdale all attract a lot of foreign investment coming from unstable countries. The wealthy of Russia, Ukraine, Chile, Argentina, Brazil, China and Venezuela flooded the South Florida market to shelter their money. Typically, they jump in when they anticipate a politically or economically destabilizing change. Often, the wealthy elite (who may be harmed or helped by the winds of change) are the ones putting their investments into these properties and some get scammed.
A recent change to the Florida Real Estate market was when Governor Ron DeSantis (R) signed a bill to restrict Chinese citizens' ability to purchase land in the State of Florida.
The flow of foreign investment into Miami-Dade, Palm Beach, and Broward Counties is expected to help the region weather any sort of a downturn in the residential and commercial real estate markets.
What's next in the series
- Florida's Homeowner's Insurance Market, Automobile Insurance Market, and rampant fraud.
- Mortgages, Housing Prices, Salaries, and Cost of Living.
- The Floridan Aquifer, Red Tide, and Sargassum Buildup on Beaches
- Property Tax Surprises
- Why people are leaving Florida and where they are going.
- Florida's Strange Relationship with Crypto and is there a truly Crypto-Friendly state in the United States?
- What's the trend with domestic migration to come?