4 Reasons Why Florida's ‘Growth Crisis' Could Lead To Homeowner Exodus
There are 'indications' that Floridians are leaving for other destinations, according to a study from Cotality, a provider of global property information, analytics and solutions. Roughly half of outbound Floridians are headed to nearby states that share similar living costs, job opportunities and weather but without the problems. Among the top destinations are Georgia, the Carolinas and Tennessee.
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'Florida's rapid [home] price appreciation combined with soaring home insurance prices and the threat of hurricanes has led people to start looking at other nearby states,' said Selma Hepp, chief economist at Cotality. 'When people leave, they are staying in the South where there is relative affordability as well as access to large employment centers.'
Florida's growth story 'isn't over,' according to Cotality. But the trickle of outbound movers 'could become a flood' if the Sunshine State doesn't fix certain problems. Below are four reasons why Florida's growth crisis could lead to a homeowner exodus.
Also here are the most expensive cities in Florida.
Florida's median home price hit $393,500 as of October 2024 to put it above the national average, Cotality found. Prices are even higher in the state's urban centers. The median listing price in Miami reached nearly $630,000, while Tampa has also seen a surge in home prices in recent years.
Those rising prices, coupled with overall inflation in the Sunshine State, has made it increasingly difficult for homeowners to afford living there.
'Migration to Florida markets resulted in strong demand for housing and some of the highest rates of home price appreciation since the onset of the pandemic,' Hepp said.
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Florida is a big state with plenty of room, a sunny climate and a flat geography — all of which have made it a magnet for new home construction over the decades. But lately there have been signs of a slowdown.
In 2022, new-build permitting activity fell 9.7% from the previous year — its first dip since 2009, according to Cotality. Permits fell another 7.2% in 2023. These declines were largely the result of labor shortages, rising material costs and regulatory delays.
Now developers must deal with the prospect of even higher costs due to President Donald Trump's tariff plans. This has made some builders hesitant to launch new projects. As new home inventory slows, prices could rise even further.
As Florida's population has ballooned, the state has struggled to keep pace in terms of building or updating roads, schools and utilities. This in turn 'threatens to erode' its quality of life, according to Cotality. Commute times in major cities are increasing, public schools are in need of modernization and even drinking water has become a 'limited resource.'
This might be the biggest threat to growth in some parts of the state. Florida is far and away the 'most hurricane-prone state' in the country, according to the Florida Museum of Natural History — and those hurricanes are becoming more frequent and intense as climate change contributes to warmer oceans.
Severe weather creates all kinds of headaches for homeowners, ranging from expensive repair work and soaring insurance costs to deflated property values.
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Cotality, 'Florida on the brink.'
This article originally appeared on GOBankingRates.com: 4 Reasons Why Florida's 'Growth Crisis' Could Lead To Homeowner Exodus
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