I just watched a news report where they were interviewing people from New York who were packing up and moving to Florida. I would agree that the scamdemic was probably the last straw for people up north who were considering moving to Florida, but I think it is important to note they were already on that road before this year, primarily driven by insane levels of taxation and government dysfunction. It’s not just New York, however. We moved to Florida from Kentucky and our accountant estimated it saved us almost $60,000 in taxes and fees the first year alone. And Kentucky’s taxes are only a small fraction of New York’s. Moving to a tax haven is an immediate boost to your quality of life. It’s amazing what you can do when you are allowed to keep more of what you earn.
What the pandemic did was two things: (1) it separated people from having to make a physical appearance at their job, making them mobile in ways they were not before, and (2) it drove mortgage rates well into the ground. I just about had a heart attack when I got quoted on a mortgage below 3%, and you get a fee-free recast if you are waiting to sell another property because lenders are that desperate for business. I have never seen a lending environment like this in my life. It makes Greenspan’s easy money era look like child’s play.
The top two destinations for New Yorkers in Florida (apart from the myriad retirement communities, which are pretty much their own little islands in the middle of the state) are Miami and Orlando. I cannot even begin to explain how insane the real estate boom in Orlando has been. There are cranes all over the city. They are building a new multi-story Ferrari dealership (on top of the one that already exists). The scale of infrastructure improvements is unhinged.
I can safely say that I have looked at every house in Ft. Myers and Naples that has at least four bedrooms, regardless of price. I looked at the price and tax history on each one. The real estate market there is hot, hot, hot – like we’ve had several houses bought out from under us and barely beat a bidding war on the one we bought. But for the most part, prices have remained relatively stable. You can see that people are starting to try to exploit the market, however, but they are easy to spot for the moment. There is no shortage of listings that are multiples of what they were just purchased for. And a lot of all-cash buyers on luxury homes.
The question of whether certain areas are bubble, however, is a somewhat complicated one. I think it depends on the demographics of the people moving into an area. One of the reasons we chose Ft. Myers over other cities (apart from the fact that it is a hyper-conservative place, which means people who share our values) is that many of the people moving in are young professionals. That means that growth is being driven by real economic activity and not people drawing down their stashed wealth. It makes a huge difference in how well a place functions going forward, in my opinion. I wouldn’t complain about a healthy mix of both, however. I think given the social landscape, there’s a legitimate premium for sanity, good intentions, and well-mannered populations.