Florida’s post-pandemic housing boom defies “recession”

NAPLES, FL– Nearly every street along the turquoise beachfront in downtown Naples has a new home or refurbishment under construction.After individuals moved to Florida to avoid pandemic restrictions, almost all of Collier County, southwest Florida, and South Florida expanded, according to Zachary Halaschak from the Economic Reporter.

GOP-LED STATES ARE BEST ECONOMIC

The 2020 census counted 375,000 people in the Collier region, which includes Naples, a city of 20,000. Out-of-staters are drawn to “Naples,” which now refers to much of the county west of Interstate 75, for its riches, beach lifestyle, and strong labor market.

The region is unique. Last year, the National Association of Homebuilders announced a nationwide “housing recession,” which is anticipated to grow next year as increased mortgage rates have made home purchase unaffordable for many people and hindered new development.

According to Redfin, property prices in San Jose, California, one of the hottest housing markets due to Silicon Valley’s rise, have plummeted 8.8% over the past year. New York City prices fell 4% and Los Angeles 4.6%.

Austin, Texas, a pandemic destination like Florida, has seen prices drop more than 16%.

South Florida bucks those tendencies. Miami rose 7.6% and Naples 13.1% in the past year. Fort Myers prices rose over 14% in a year, defying the national housing recession story.

“Despite what is happing nationally, this market here is really its own situation outside of the national picture,” Chris Spina, owner and president of Spina Realty Company, told the Washington Examiner in the foyer of a $14 million mansion a short walk from the beach.

Spec homes are designed without a buyer in mind. Spina’s construction indicates confidence in the housing industry. Construction workers and work vans lined the tiny roadway near that residence.

To attract rich Northeast and other buyers, the home portrays a laid-back Florida lifestyle. Light blues and greens recall the seaside and palm trees.

Florida’s epidemic growth continues despite other states lifting limits. The Washington Examiner interviewed many persons who linked migration to Florida’s lenient pandemic regulations and the opportunity for younger people to keep their careers in New York City and other large cities while working remotely in the Sunshine State.

Bill Gaston, owner of Naples-based construction management business BUILD, told the Washington Examiner that politics had influenced some incoming migration. In recent years, Gov. Ron DeSantis (R-FL) has led the state conservatively. In recent cycles, the state has become a conservative Republican stronghold from a purple swing state a decade ago.

DeSantis, a staunch opponent of blue state lockdowns and business closures during the outbreak, inspired many who resented limitations. Many were drawn to conservatism and reduced taxes.

Gaston noted that many Midwesterners migrated to the Northeast and California before the outbreak. “I think COVID politics drove a lot of that on the client side.”

Gaston stated his company’s revenue increased 24% in 2021. The company’s sales grew 85% in 2022 and is expected to climb 38% this year.

Florida is one of nine income tax-free states. New York and California have double-digit marginal tax rates, which can quickly eat into earnings. Moving to Florida can increase savings and local spending.

After the epidemic, Connecticut real estate agent Vikki Salese went to Florida in July 2021. She had always wanted to relocate south, but employment prevented that. However, her finance-industry spouse was permitted full remote employment, making the relocation viable. One of her sons struggled with virtual learning, another reason to go to Florida.

“By spring of 2021, things were not getting better; our COVID policies up there were quite different than what was going on here,” she told the Washington Examiner.

Salese stated remote work and pandemic-era migration schooling possibilities “fell into place.” “We never regretted it.”

Salese said her family had profited beyond income tax savings. They don’t require a winter outfit or heat in the winter. Florida people don’t need all-wheel drive for snow.

“With no state income tax, and even our property taxes aren’t so bad,” Naples City Council member Ted Blankenship told the Washington Examiner.

For instance, a NYC accountant. After taxes, they receive $5,197 semimonthly or $124,728 annually if they earn $200,000. If the accountant moved to Naples, they would earn over $6,000 twice a month, or $19,000 more per year.

Downtown Naples is calm but busy. Birds, breezes, and construction activity can be heard in Florida’s manicured landscaping. Visitors and potential residents are arriving in private jets. Spina said the area’s housing market and aircraft traffic have developed together, reflecting the influx of people and income fueling its rapid growth.

Marco Island, Bonita Springs, and Fort Myers have also grown rapidly. After crossing one of Marco’s two bridges to the mainland in winter, it can be hard to obtain a parking spot due to the recent influx of permanent inhabitants and seasonal residents.

According to the U.S. Census Bureau, Collier County’s population increased by 6% from April 2020 to July of last year, building on longer-term growth trends. As house prices rise in Naples, many purchasers pay cash, avoiding the higher mortgage rates of the past year. Instead of Midwest retirees, demographics are changing.

“Average age is decreasing. “We’re seeing more young buyers with families,” Premier Sotheby’s International Realty CEO Budge Huskey told the Washington Examiner.

Miami’s real estate market is also strong. Ines Hegedus-Garcia, chairperson of the Miami Association of Realtors, the nation’s largest local Realtor association, said the housing market has slowed from its post-pandemic pace but remains hot despite markets in other parts of the country falling.

“The real estate market is gradually returning to a more stable state following the pandemic; however, Miami continues to outpace national trends,” Hegedus-Garcia told the Washington Examiner. Despite rising inventory, Miami home prices continue to rise at a slower rate.

“The city’s real estate market is unique due to the significant number of cash transactions and the high rate of migration,” she noted.

Due to increased migration in recent years, Brickell’s skyline is dominated by big cranes and construction projects. The densely packed neighborhood south of downtown has residential apartments, ritzy condominiums, and layers of restaurants and businesses constructed out and up. According to moveBuddha, the neighborhood has the highest ratio of persons moving in vs. out in Miami.

Due to rising demand, hip enclave and Miami prices have risen. Zillow reported that the average Brickell ZIP code home was worth over $385,000 before the outbreak. That increased 55% to nearly $600,000 last year.

Salese is one of thousands of people who have come to Florida in recent years, boosting South Florida’s home market even as other markets struggle. Florida was the fastest-growing state in 2021–2022, according to U.S. Census Bureau data. Florida’s population has grown annually since 1946, even during national declines.

Florida’s population grew 14.6% from 2010 to 2020 and 34.8% since 2000.

New York lost 180,341 residents between 2021 and 2022. Between the pandemic and July 2018, California lost over 500,000 people.

It continues due of Florida’s economy. Spina, the Realtor, confirmed.

Gaston said that Hurricane Ian increased construction demand in southwest Florida, particularly home rebuilding. That increased activity. He doesn’t anticipate a home market slowdown.

“There is not enough labor to meet the rebuild alone, let alone market growth. He said, “I don’t expect any construction recession in our area.” “It would be great if it slowed a bit because it would make the projects more manageable.”

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