Everyone is moving to Florida! Or maybe they aren't
There’s been a lot of coverage over the last several months about homebuyers making their way to Florida in response to the pandemic: Northeasterners seeking warmth and lower taxes, celebrities looking for their next grand estate, and fast-paced city-dwellers seeking a more relaxed way of life in trendy Palm Beach.
Amid the buzz about Florida, Miami Mayor Francis Suarez has even taken to Twitter to try and woo Silicon Valley big wigs, like Elon Musk, with business propositions.
But despite the state’s good real estate press of late, many people also move out of Florida every year, a Wall Street Journal article recently pointed out.
Serious considerations like hurricanes, intense heat and rising home prices drive nearly as many people out of Florida each year as those who move in. Despite pervasive narratives about buyers flocking to Florida during the pandemic, the state’s population growth has actually slowed to its lowest rate since 2014, according to Florida’s November 2020 Demographic Estimating Conference. The state’s population rose by 1.83 percent — 387,479 people — between April 2019 and April 2020. By contrast, between April 2020 and April 2021, it is expected to grow by only 1.38 percent, or 297,851 people.
The year 2020 saw the fewest number of moves to Florida from other states than any other time in the last nine years, according to an annual migration study conducted by national moving company Atlas Van Lines. Additionally, about 50 percent of Florida moves in 2020 were incoming versus outgoing, compared to 60 percent in 2015, according to Atlas.
“As many people are moving in as are moving out [of Florida],” Barry Schellenberg, president and COO of Atlas Van Lines, told the Journal, “which kind of surprised me because when you hear some of the news stories about the number of people moving to Florida, I expected that the number [of incoming moves] was going to be greater.”
Demographers, on the other hand, know Florida’s story well. The state’s population as a whole has grown steadily for decades, but within the last 20 years or so, many people have also left the state, often returning to their home state, according to Hamilton Lombard, a demographer at the University of Virginia.
“A lot of people go down there and realize that they don’t like hurricanes,” Lombard said.
Florida’s luxury market has certainly seen a boom lately with several high-profile out-of-state buyers making multi-million dollar purchases. Ivanka Trump and Jared Kushner, as well as Sylvester Stallone, represent just two recent such high-end buying parties, both closing on estates upwards of $30 million.
However, sales at the opposite end of the price spectrum have not been thriving in the same way.
In Miami-Dade County, 197 contracts were signed for single-family homes over $1 million during January 2021, more than twice as many such contracts signed the year before, according to a report from Douglas Elliman. In contrast, contracts on homes under $500,000 dropped 56 percent year over year in January 2021. Contracts in Naples tell a similar story — there were 624 contracts signed on single-family homes over $2 million in the area in January, which was up 62 percent year over year. Meanwhile, contracts on homes under $300,000 dropped 20 percent during the same period, according to the Naples Area Board of Realtors.
A lot of the luxury buyers contributing to those pricier sales are snowbirds or full-time residents who already own properties in Florida, real estate agents told the Journal. And even though there have been plenty of stories about Northeasterners driving traffic to the state over the last few months, that movement has truthfully been “very slight,” according to findings from the state’s Demographic Estimating Conference.
But among the state’s new residents, the jury’s still out on how long they’ll last in the Sunshine State. “A lot of people don’t last more than five years,” Peter Zalewski, founder of Miami real estate consulting firm Condo Vultures, told the Journal. “They go home.”
Hurricanes or the intense heat are some reasons why their stay can be short-lived, but for other homeowners, the state’s surging prices are incentive enough to sell and gain a strong profit. In the case of one recent buyer the Journal spoke with, for instance, the family only held onto the vacation home they bought in Palm Beach in November for about four months before spontaneously deciding to sell.
Jessica Cunningham, her husband and four children, whose primary residence is in Chicago, vacationed in Palm Beach often, and bought a three-bedroom home in West Palm Beach for $1.1 million because they had been spending so much time in the area during the pandemic. With plans to keep the home, and potentially even move to Florida permanently, they renovated it, but ended up selling when they realized how much the home had appreciated in that short time. A few weeks ago it was sold to an all-cash buyer for $1.45 million even before it was put on the market.
“The market is so crazy that we [realized we] could make some money off it,” Cunningham said.