Queue Frank Sinatra…. “Start spreading the news…” Florida has officially surpassed New York as the second most valuable housing market in the United States, according to a new study by Zillow. The total value of Florida’s residential property is now estimated to be $3.8 trillion, compared to $3.69 trillion in New York. This now ranks Florida second in the country for home values behind California, which has a commanding lead at more than $10 trillion (20% of the national total). New York, Texas, and New Jersey came in third, fourth, and fifth, respectively.
This is a significant milestone for The Sunshine State, which has long been a popular destination for retirees and vacationers. However, in recent years, the state has also become a magnet for businesses and families, drawn by its warm weather, low taxes, and relatively affordable cost of living.
What drove Florida home values to surpass New York?
- Strong out-of-state buyer demand: According to the Florida Realtors® Association, nearly 90% of all homes sold in Florida in 2022 were purchased by buyers from outside the state.
- Limited inventory of homes for sale: With the state’s population growing so rapidly, the number of new homes being built is not keeping up with demand. This is pushing up home prices and making it difficult for some buyers to find affordable housing.
- A thriving economy: The Florida economy has been a major reason for its continued population growth in recent years. Of course, this started during the pandemic, particularly. Now, we are seeing many companies once headquartered in other states such as New York, opting to relocate to paradise.
- A favorable tax climate: The lack of a state income tax continues to be a driver for Florida’s population growth. Both individuals and companies have been flocking to The Sunshine State for this reason.
- Tropical weather: Of course, we can’t discuss the allure of Florida without mentioning its tropical climate. With the increased popularity of the remote working environment, more Americans have opted to live where they have been vacationing.
In particular, Florida has seen an explosion in its population since the start of the pandemic. In fact, of the six markets where housing gained the most value since the start of the pandemic, four are in Florida:
- Tampa: Up 88.9%
- Miami: Up 86.6%
- Jacksonville: Up 82.4%
- Orlando: Up 72.3%
While this may be welcomed news for homeowners in The Sunshine State, these higher home values have provided some headwinds for home buyers. Add in rising mortgage rates and persistent inflation and there is good reason for the overall decrease in the number of home buyers. As always, it is advisable to hire a local and knowledgeable real estate agent.
Are you looking to buy or sell property in South Florida? We can help! Contact Natasha at Live South Florida Realty, Inc. today! Also, don’t forget to download the free Florida Home Search app for your smartphone or tablet!