YES, and NO.
Here’s the Yes part.
While Florida has been the Retirement Capitol of much of the East Coast of the United States for many years, that market is slowly being taken over by other states.
Why? Lower cost of living seems to be the major factor. States like Alabama, Mississippi, and Georgia have similar areas where people don’t have to put up with the traffic for one reason.
They also offer lower housing prices and costs. It seems to reason that if you can cut your cost of owning a home by about half, and electricity is cheaper, why not be there?
Florida has many amenities within it, golf, fishing, boating, good places to eat, you name it, Florida has it.
So do the other states.
Post-pandemic, once people felt it was ok to move around, they came by the dozens daily.
They were here to buy houses and enjoy the Florida lifestyle.
This time it was a great time to sell your house. Houses were being bought sight unseen, list price homes were being sold as is and in some areas the houses were being sold 20, 30 and even 50 thousand above asking price.
People even came to Florida with all of their belongings in a U-Haul truck, waiting for the house they were buying to close so they could move in.
Some of these people had to wait weeks, as someone offered more than they did, and they had to keep looking.
All this activity kept people busy, especially real estate agents and title companies.
It also brought a boost to the service industries that work in Florida, restaurants, hotels, car dealerships, and many others that keep Florida moving.
The economy was at a record pace. Jobs were available for those that needed one, plenty of places to see and go to. Except housing prices. They went up. Way up.
Larger loans were being made for these houses, condos, and other investment properties.
Even rent went up. In some areas rent caps were being considered so lower income people could afford to stay.
As a real estate investor, with the prices going up so fast, some properties were not available to even the next day. We were beaten by a higher offer in many cases, plus, the prices for something that was attainable the year before had become so high priced, it wasn’t worth buying.
I know. We purchased one property for $90,000 and the next year, in the same shape, but with new windows, Zillow had the property valued at $265,000, and it still needed work!
We sold it.
There seemed to be no real logical reason for housing to go so high.
Some areas are now stabilizing and there are a few, if any, that prices are still going up.
The market now is changing month by month.
Over the last few years since all this activity started, we have had higher inflation come at us.
It really hadn’t done much to slow real estate down, as it kind of stabilized prices some.
But other things, they continued to squeeze people.
With the higher cost of just being able to live, many people have gotten aggravated that there just isn’t as much money as there was a few years ago.
The restaurant industry is having to charge more for their food, so people have to skip eating out as much.
Electric is one that shocks people every time the bill comes in.
Back to the food industry for a moment. There have been many restaurants that have gone out of business because the cost of purchasing the food and then charge the customer is so high, it isn’t logical to stay in business.
Some of those that passed the prices on to the customer saw less activity of people visiting their restaurants.
Gas, with such an increase in fuel, you now have to budget that in as a higher cost. Over the course of a year, that can be a big cost if you drive to get to anything.
Insurance and interest rates. Those two things have mainly doubled in the last three years.
Now the housing market is seeing a decline because of the two combined.
I know a few people that have said that their insurance on their home has gone up 42-45%, and they also have seen an increase in their automobile insurance.
With higher interest rates, many can’t even get a loan without an almost perfect credit score.
So, yes, the Florida housing market is in trouble in the very near future.
The leading argument to this is the one that is the most visual. People are not moving here. Or leaving because of the higher price of living.
Added to that this year, with 2 major hurricanes going up the West Coast of Florida, who wants to move here? And not to forget the 2 the year before.
I am also a licensed real estate agent.
A recent look at the MLS (multiple listing service) has shown that there are more listings coming to the market and being on the market for sale with average days on the market creeping up.
I also see the price decreased homes still sitting. So why is this happening? Where is the demand for Florida housing?
It is growing smaller. Plus, major builders are putting up houses so fast, some that can afford to are going to those. Why buy a used home when you can get a brand-new building with incentives?
Even the builders will be seeing the slowdown soon.
The pending listings have been canceled to not closing because of all of this.
Insurance, cost of living, and additional fees are what is causing Florida’s real estate market to decline.
Now to answer the NO part of the equation.
Florida has attracted people from other places to move here for many years.
It has just about anything that’s available in other states all rolled into one place.
It just doesn’t have mountains or snow. Which is one of the reasons people move here, no snow.
I grew up in New England, snow is something I don’t miss. Sure, it looks good, and people have fun in it. I just hated getting up an hour or two before having to go to work and shoveling the stuff just to be able to leave the house, and then to do it again when I returned home.
But Florida will always appeal to people who want to be in a warm climate.
It offers housing that while some homes get destroyed in the storms, and others are rebuilt, those that want the climate offered here will migrate to be here.
Plus, even if Florida’s housing market gets extremely crazy, those that can afford to live here will find a way to do it.
After the 2008 housing crisis, people were moving to Florida in droves. Why not, they could pick up houses cheap. Approximately 1200 people were moving here a day. That’s about 36,000 people a month.
Plus, there were many that left the state at the same time.
The housing was still here, it just changed owners.
So, this Florida real estate market will be here for a long time. It will have ups and downs in prices, but it will still be here.
Here are some of the reasons people will still be moving here. This, despite the costs, are is just a small list of reasons that they will be moving here.
Primarily, it’s the weather. But we also have beautiful beaches, low cost of living, (which adjusts over time) no state income tax, and a wide range of activities for just about anyone.
This still keeps it attractive to many retirees seeking a warm climate lifestyle.
Affordable living: Compared to many other states, the overall cost of living in Florida is still relatively low, and low real estate taxes are a major draw for some people.
Plus, the warm weather does allow for outdoor activities mostly year-round.
Diverse communities: Florida offers some of the most diverse living conditions you can imagine.
Within its borders, one can pick up a $100,000 fairly new double-wide mobile, or there is the upper side of living where you can purchase a 20-million-dollar estate. And everything in between.
People will come and they will go, but Florida is always going to have a real estate market that goes up and down, and every once in a while, it stabilizes and gets to a new normal.
It will also have changes in the weather, and if there are a couple of years that there are no major hurricanes damaging things, people will forget the past storms and move here anyway.
Another plus here is that if you are not extremely rural, you can experience food and nightlife with big differences between them all withing about 20 miles of each other, sometimes even closer.
My last reason for writing about the housing market not completely crashing is that people will also move here for jobs, education, and access to many healthcare opportunities.
So what is about to happen if Florida doesn’t appear to be a crash, just a normalization after the quick rise, it has to cool sometime.