Today I’m taking a quick macro look at the real estate market.
(Regular readers know my 2022 focus is on local inventory levels. Since November, Delray Beach real estate inventory is up about 82%. For context, below you can see how South Florida is doing in your Weekly Inventory Update).
As shown on news outlets for the last two years, the Florida real estate market is one of the strongest in America. I delve into some reasons why below. But first, put your eyeballs on the map above.
Regarding housing pricing, the Fortune Magazine map above shows how the west may be losing strength, while the southeast is on firm soil. I takes data from Core Logic – a leading real estate data firm – factoring things like income growth projections, unemployment forecasts, consumer confidence, debt-to-income ratios, affordability, mortgage rates, and inventory levels.
So this map is enlightening. It shows Florida real estate with a low (blue) chance of home price slippage, while the west coast as very high (red) probability of price erosion.
I was raised in Southern California. And I deduce that folks are leaving there and are moving east for many reasons. For some, it’s political. For others, it’s to be in a place where money is treated better. (Speaking of politics – a topic not meant for this blog – it’s interesting to see “blue” California, red… and “red” Florida, blue. How ironic)
Most Californian’s head east to Texas, but rarely go beyond. Today they’re migrating as far as Florida. It’s a longer term macro trend I’m diving into. I know this because folks call me weekly from my marketing efforts in Southern California.
The Florida Real Estate Market Strength Story
As for Florida real estate, it’s one of the strongest real estate markets in the country. No state income tax, fabulous weather, great lifestyle. And, a tsunami of money flowing into our state, not away from it.
Over the last decade, a lot of wall street money began leaving New York and New Jersey. Most was due to the taxation of the ultra wealthy. Neither of these states offered wealthy folks tax breaks. There was more red tape, less business incentives and a general cloud hanging over the wealthy from a tax perspective.
One by one they began showing up and buying Florida real estate. Jacksonville and Palm Beach were prime attraction areas. And of course, Miami was at the crosshairs. The Brickell district was an attraction for wall street money and the sale of condos went parabolic.
The lure continues to be the openness Florida has for businesses. Florida is seeing more tech companies in Ft Lauderdale, more health insurance companies due to the growing aging population and the strong aerospace industry. Job creation in Florida is strong.
So, job creation along with the state encouraging folks with it low tax rates, great climate and the state with the longest coastline in America with over 1,400 miles of sand beaches… it exploded.
Florida real estate once again saw a surge in demand like no other state. With this, supply was under pressure and prices rose. Now that markets are showing signs of weakness due to rising interest rates, states like California, Washington and others in the midwest are seeing price erosion. But not in Florida.
Florida real estate is showing resilience and strength as demand remains strong, supply low and job growth rising.
As I come back to Delray Beach, we continue to be on the radar with a large wave of folks heading to Florida.
And Delray Beach is one hot spot gaining popularity due to its growing entertainment and touristic features. Folks seeking a good investment in Florida real estate are finding great options here.
If that’s you – thinking of moving here – let’s schedule time to meet over coffee… or a nice Spanish Tempranillo. Why “Blue States are Red & Red States Are Blue”
