If you are a Florida resident looking to buy a home then chances are you have seen firsthand the level of competition from out-of-town buyers. Historically, southeast Florida has been a main attraction for many Americans looking to relocate from more expensive markets such as New York & New Jersey. However, since the pandemic and subsequent increased prevalence of virtual working environments, it appears as though the floodgates have opened with home buyers relocating from other states. In fact, we are seeing more out-of-town buyers from even more states than what we have typically seen. While this has bolstered an already strong Florida real estate market, it has led to significant additional challenges for local buyers.
Out-of-town buyers have more money
The fact of the matter is that local home buyers are having to compete with out-of-town buyers with more money. The most common scenario is an out-of-state buyer has just sold their home in a more expensive market such as New York. In moving to South Florida, they are then able to buy a new home with cash. In addition, the Florida home is typically priced much lower than their prior home sold for in a more expensive market. This oftentimes means that their offer has no contingencies, which is extremely attractive to home sellers. In some competitive situations, these out-of-state buyers are even shortening or eliminating the inspection period altogether. Not to mention, many of these purchases are being made sight unseen. Needless to say, it is extremely difficult for a typical Florida home buyer obtaining conventional financing to compete.
New residents vs Florida residents
Throughout various Florida metro markets, the average budget for new residents moving from higher cost states compared to Florida residents is quite astounding. Below are several examples:
- Miami: 25.1% (New buyers’ average budget = $972,47 vs. FL residents’ budget = $777,102)
- Orlando: 17.8% ($555,216 vs. $471,145)
- Tampa: 9.2% ($575,429 vs. $527,016)
- Jacksonville: 1.7% ($409,897 vs. $402,872)
The popularity of remote working environments has certainly removed all barriers on where Americans may live and work. In many cases, these American workers are able to maintain their higher salary from more expensive states and move to a lower cost of living market. In moving to South Florida, these home buyers are also saving a state income tax. A strong cash position, lack of state income tax, and a tropical climate are just several reasons why this is such an easy decision for these buyers.
At Live South Florida Realty, Inc. we have assisted many clients with their real estate needs. Are you looking to buy or sell a property in South Florida? Now more than ever, it is critical to have a qualified real estate team and the proper search tools behind you. Live South Florida Realty, Inc., has been a leader in the South Florida market for many years. Let our team of professionals assist you with buying or selling your piece of paradise today! In addition, our recently launched “Florida Home Search” app is now available on the Apple App Store and Google Play Store. With real-time MLS feeds, this app lets you set your own alerts to notify you as soon as a property meeting your needs hits the market. Furthermore, it will also let you know of recent closed sales in your area so that you may be even more educated on the market. Be sure to download this app for your smartphone or tablet today!