How Florida became America's 2nd-most-valuable housing market
David C Tomlinson/Getty Images
- Florida beat out New York to become the country's second-most-valuable housing market, Zillow said.
- Of the top six markets that gained the most value since the onset of COVID-19, four are in Florida.
- The market boom is driven by an influx in new residents putting more demand on the housing stock.
The surge of lockdown-era buyers flocking to Florida for year-round warm weather has pushed the state to new heights.
The Sunshine State is the second most-valuable real-estate market in the country, according to a new study by Zillow that charted the change in national home prices since the pandemic. Florida's market clocked in at $3.85 trillion, pulling in front of New York's $3.69 trillion and Texas's $3.39 trillion, according to a graph from Bloomberg using Zillow data. California remains untouchable in the top spot with a value of $10.18 trillion.
Florida's ascent is fueled by its recent population growth, which contributes to strong new construction figures. Florida welcomed 655,000 new residents since the start of the pandemic, according to Census estimates reported by Insider in March. Home prices in the state have also been pushed upwards by increased competition for the existing housing stock.
Out of the top six markets that gained the most value since COVID-19, four were located in Florida, including Tampa (88.9%), Miami (86.6%), Jacksonville (82.4%), and Orlando (72.3%), according to Zillow.
The state's lack of personal income tax, sunny weather, and luxurious beaches are a strong draw. Stefanie Mortensen left Virginia for Florida in May. She had been looking for a house along the coastline, and settled for a $159,000 tiny home in a community outside of Tampa. "I haven't regretted moving," she told Insider in August. "I miss the people, I don't miss Virginia. My future is to stay here as long as this works."
Stefanie Mortenson
A July study from Florida Atlantic University and Florida International University found that the state is home to five of the ten most overvalued housing markets in the US, with Tampa leading in the state with homebuyers in that area paying a 43% premium on their properties compared to historical rates, Insider previously reported.
That premium doesn't deter everyone. "I wasn't planning to stay after graduating in December 2021," Noelle Lane, a Tampa-area resident, told Insider in July. "But this May I actually bought a house with my boyfriend. We live in a family-friendly neighborhood in a suburban area outside of Tampa."
Other Florida cities in the top 10 list included North Port, where buyers pay a 43% premium, Cape Coral, which has a 42% premium, Lakeland, which has a 41% premium, and Palm Bay, which has a 40% premium.
Meanwhile the Gulf Coast city of Naples, an hour-drive south from Cape Coral, has the quickest-rising real-estate prices in the country, according to a new analysis from Realtor.com. It notched a 17.1% increase in the median price per square foot since August 2022.
Housing affordability is a growing challenge
The rising cost of real estate is creating affordability challenges for newcomers and longtime locals alike.
Miami has the highest share of cost-burdened renters — people who spend 30% or more of their household income on rent — in the country. About 61% of Miami renters are cost-burdened, according to a report released earlier this year by the Joint Center for Housing Studies at Harvard University previously cited by Insider.
Courtesy of Nicole Panesso
South Florida native Nicole Panesso was paying $1,200 a month for a studio in Fort Lauderdale when she decided to move. "There's just no way for people living here to afford it — the salaries that they pay here don't add up to the cost of rent," she said. She hightailed it to Chattanooga, Tennessee, in 2022, where her rent dropped to $950 for a one-bedroom apartment.
David Triana, 27, left renting in the Orlando area behind and moved back in with his parents in Clermont, Florida, in 2019 to save for a down payment. He told Insider he and his fiancé have saved $20,000, but it isn't enough given the area's rising real-estate prices and mortgage rates.
"If the real estate market in Florida was more stable and mortgage rates were back down to 3% and 4%, I think we would probably have been homeowners for at least a year by now," he said.
from Business Insider https://ift.tt/hCSIv3k
No comments