Will Pandemic Refugees Flock To Florida?
It is no secret that the real estate market is red hot across the nation. However, some markets are hotter than others. One place that has seen the most interest from home buyers has been the Sunshine State. Florida has always been a popular destination to buy a house. Its warm weather has attracted people from colder climates, affectionately known as snowbirds, who buy second homes in Florida to wait out frosty winters. At the same time, others have looked to Florida for economic purposes that go beyond the great weather, such as no state income tax and a lower cost of living. While Florida has always been a popular destination, its popularity has only grown for home buyers since the beginning of the pandemic. Why is the pandemic causing home sales to surge in Florida and will this trend continue as the pandemic lingers?
Home Buyers are Flocking to Florida
Since the beginning of the pandemic, Florida has been the number one state for people to move to. In the past year, nearly 330,000 people have moved to Florida and many of them have bought homes. A lot of individuals moved to Florida from places like California and New York. California and New York are on opposite edges of the country and are very different in many ways. However, there are a couple of things that they have in common that might explain why residents of these states have decided to move to Florida.
First, California and New York have high costs of living and high tax rates, including property taxes. Moving to Florida offered residents of California and New York an opportunity to take advantage of the real estate market and set themselves up in the Sunshine State. Home vaues surged in New York and California, which allowed homeonwers in these states to sell their houses at huge profits. Moving to Florida allowed them to take the profit from their home sales and buy even larger homes. Aside from just being able to buy larger homes, they were able to do so while saving money longterm on property taxes. In Florida, property tax is less than 1% compared to New York, where it is over 1.7%. For many, moving to Florida and buying a house made a lot of economic sense.
The second factor that California and New York have in common is that they both took very strict approaches to trying to curb the pandemic. These states instituted strict lockdowns, which caused entire industries to go dark. Particularly hard hit were the service industries, including dining and entertainment. Florida, on the other hand, did not institute strict lockdowns and opted to keep many of its industries open. Florida’s economy is very reliant on tourism, so the state gambled that keeping dining and entertainment open would attract tourists looking to escape lockdowns. Their gamble paid off. Not only did they attract vacationers wanting to escape lockdowns, but they also attracted home buyers looking to escape lockdowns. Many people in the service industries saw moving to Florida as a way to gain job security.
The Past, Present, and Future of the Pandemic
When the pandemic first started lockdowns were initiated to control the spread. At first, we expected these lockdowns to only last a couple of weeks. A couple of weeks eventually turned into a couple of months, causing major disruptions in many industries. Unemployment skyrocketed and families were left scrambling. Eventually, things did subside and we thought the worst was behind us by the time we went into the summer of 2020. Little did we know that the worst was ahead of us. Cases started rising into the fall and then accelerated into the winter, leading to a trail of death and economic destruction we did not think possible. Eventually, thanks to control measures and vaccines, we got through that surge and made it to this summer where we thought the pandemic was behind us. Unfortunately, we are now witnessesing yet another surge in virus cases.
The latest surge in cases is leaving some states reconsidering their decisions to remove all pandemic-era restrictions. While virus numbers are surging in 46 states, some areas are particularly worrisome. Los Angeles County is one particular area where experts are keeping a close eye on. Over the past few days, Los Angeles County has been reporting as many as 10,000 new cases each day. In turn, the county is now bringing back some of its old restrictions, such as mask mandates for all indoor activities. Hopefully, measures like this will be enough to stem the tide of the surge. However, if cases continue to rise, what will states do in response? Will places like California and New York return to lockdowns on things such as theme parks and indoor dining?
Extreme measures like additional closures do not seem to be on the table at this point, however, in a world where they are, we might see even more pandemic refugees. Many Americans are weary of mask mandates, lockdowns, and many other pandemic responses that threaten their jobs. If more measures like these are put back into place, we are likely to see additional large waves of individuals looking to move to Florida and buy houses.
Final Thoughts
Even without the pandemic, many homeowners are choosing to sell their houses and buy new homes in places like Tampa Bay, Pensacola, and Palm Beach. Mortgage applications are surging as people want to take advantage of low mortgage rates and low taxes by buying a house in Florida. When you add in the pandemic and the many people who are choosing to move to Florida to avoid pandemic restrictions, it’s clear that Florida real estate will continue to trend upward.
If you have been considering a move to the Sunshine State or are interested in getting a vacation home, contact us. The real estate market is competitive, so you want to already have in place a professional mortgage broker. Florida has some amazing opportunities for home buyers and we can help try and get you pre-qualified to take advantage of them.
