The Sunshine State has always been one of the big favourites for relocation in the US. But post-lockdown, the state looks more popular than ever before. The trend has big implications for two sectors: the real estate market and the Florida population, which looks set to surge.
Favourite for relocation
According to Forbes, Florida is more popular than ever with families keen to relocate to the Sunshine State. Latin Americans, particularly Mexicans, have always favoured Florida, but post-lockdown it’s the Americans themselves.
The article claims there is keen interest from relocators in the Northwest, Midwest and Eastern parts of the country. New Yorkers are reportedly especially sold on the idea of moving to Florida permanently.
“People who have historically vacationed in Florida are now permanently relocating,” said Robert Barthelmess from BGI Capital. He claimed that the main attraction is the “sense of familiarity”. He added that Florida has gone from being a destination they would visit once or twice a year to “becoming a place they truly could consider a home”.
Implications for Florida population
The trend towards Florida will boost population figures still further. Prior to the pandemic, the Sunshine State was already welcoming almost 1,000 new residents a day. And this figure is set to rise still further as Florida’s popularity increases. Zero state taxation, low population density and wide open spaces have enormous appeal, particularly to big city dwellers.
A recent report found that Miami is the number one location for New Yorkers to move to. Other Florida metros such as Tampa and Orlando sit close behind. The new trend leads analysts to believe that the Sunshine State will be among the first to recover post-lockdown.
Busy property market
One of the clearest indications of the rise in Florida population comes in tax returns and property sales. The state has seen a sharp increase in interest in the real estate market with brisk sales and low supply.
In September this year (latest figures available), sales of single-family homes went up by 22% in the year. Condo sales rose by an even higher 25.3%. The surge in demand directly affected median house prices, which increased by 12.7% for condos and by 13.2% for single-family homes.
But perhaps the most reliable signs of demand come in statistics for the time taken to go to contract and for supply levels. In the case of single-family homes, they took just 23 days to go to contract in September, down from 39 a year ago. Condos spent just 38 days on the market before contract compared with 52 in September 2019.
Inventory levels continue to dwindle. Those for single-family homes are particularly low and registered just 2.2 months in September. The supply of condos is slightly better (5.1 months), but still below the 6 months that experts consider to represent a balanced market.
Meet the demand
The surge in Florida population on the back of the rise in relocation presents several opportunities for investors. The single-family home market is particularly attractive given the uber low supply. Investing in this type of Florida real estate in sought-after ideas offers the best returns, both from buy-to-let and build-to-let.
At BRIC Group, we expect the Florida real estate market to continue to show strong sales and low supply for the near future. We therefore believe it makes sense to look at investing in the Sunshine State now to meet this demand.
(Source: Forbes, Florida Realtors)