Douglas Elliman CEO Dottie Herman discusses where high-income generation Y is moving and whether or not New York will recover from the pandemic.
David Gewirtz never got used to the heat, even after 15 years in Florida.
Still, Gewirtz, who grew up in New Jersey, and his wife, Denise Amrich, liked their adopted hometown, Palm Bay, Florida, and would probably have stayed had it not been for the “brutal” hurricanes.
“Looking at those tracking maps for weeks before a hurricane starts to create a stress level,” said Gewirtz, a technology columnist in his 50s. “It’s been three weeks wondering if you’re going to have a house at the end.”
The couple evacuated their home during Hurricane Irma 2017, continued driving until they reached Oregon and decided to stay. They put their home in Palm Bay up for sale.
Florida, it seems, is not for everyone. But you would never know that from the PR that leaves the state.
In the midst of the pandemic, Florida politicians and real estate developers promoted the narrative that hedge fund executives and technology workers, in search of hot weather and low taxes, are abandoning New York and California en masse and taking root in Florida. Miami Mayor Francis Suarez used Twitter to publicly woo Silicon Valley tech moguls, inviting Elon Musk to Miami for a discussion about tunnel construction under the city. In December, when venture capitalist Delian Asparouhov tweeted a suggestion about moving from Silicon Valley to Miami, the mayor retorted to his followers with the answer: “How can I help?”
Much less discussed, however, is the fact that each year almost as many people leave Florida as they move there. They are fleeing hurricanes, heat and raising house prices. Although COVID-19 has led some out of state to buy homes in Florida, the state’s population growth has slowed in the pandemic to its lowest rate since 2014, according to the state’s November 2020 Demographic Estimation Conference. Between April 2019 and April 2020, the state’s population grew by 1.83%, or 387,479 people. Between April 2020 and April 2021, however, the population is expected to grow 1.38%, or 297,851 people.
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There were fewer changes in Florida from other states in 2020 than at any time in the past nine years, according to an annual study of migration patterns by the national moving company Atlas Van Lines. The study also found that about 50% of Florida’s movements in 2020 were incoming versus outgoing, down from 60% in 2015. In contrast, in 2020, North Carolina had approximately 65% of incoming movements.
Atlas data shows that in Florida, “as many people are moving here as they are abroad,” said Barry Schellenberg, president and COO of Atlas Van Lines, “which surprised me because when you hear some of the news about the number of people moving to Florida, I expected the number [of incoming moves] it was going to be bigger. “
This may be new to the general public, but it comes as no surprise to demographers. Florida’s general population has grown steadily for decades, but over the past 20 years, the state has also seen a large number of people leave each year, with many returning to their home states, said Hamilton Lombard, a demographer at the University of Virginia. “A lot of people go there and realize they don’t like hurricanes,” said Lombard.
This fact is contradicted by the state’s growing luxury real estate market: luxury home prices across the state have exploded in the pandemic, in part due to the purchase of homes in Florida by wealthy people outside the state. Ivanka Trump and Jared Kushner paid $ 32 million for land on Miami’s exclusive Indian Creek Island. They did not respond to a request for comment. “Rocky” star Sylvester Stallone spent $ 35.375 million on a beachfront complex in Palm Beach, just months after selling his California home. New York hedge financier (and GameStop short seller) Gabe Plotkin paid $ 44 million for two adjacent houses on North Bay Road in Miami Beach.
The market is particularly strong in Palm Beach, where former President Donald Trump now lives and has become popular with financial executives. Palm Beach County saw a huge increase in home sales in February, with more than twice as many contracts signed in condominiums than in the same month last year, and 95.4% more in single-family homes, according to a report Douglas Elliman’s market share.
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Other areas of Florida, while watching the growth in sales of sophisticated products, have slowed down at the bottom of the market. In Miami-Dade County, for example, there were 197 contracts signed for single-family homes over $ 1 million in January, more than double the 77 in the same month last year, according to a report by Douglas Elliman. During the same period, housing contracts below $ 500,000 plunged 56%. In the Naples area, there were 624 sales of single-family homes in excess of $ 2 million in January, a 62% jump from the same month a year ago, while sales below $ 300,000 plunged 20%, according to data from the Naples Area Board of Realtors.
Many of these sophisticated buyers already own homes in Florida, either as full-time residents or “snow birds,” real estate agents said. Despite the narrative that Northeasterners are fleeing en masse to Florida, the state’s Demographic Estimation Conference found only a “very slight” increase in migration from the Northeast since the beginning of the pandemic, according to Stefan Rayer, from the Department of Economics and Business at the University of Florida Research. “It’s not really moving the needle,” he said.
Among buyers who are new to Florida, it is unclear how many will make Florida their full-time residence and, if they do, for how long they will remain. Peter Zalewski, founder of Miami real estate consultancy Condo Vultures, said he has observed over the years that many Florida transplants do not last long. “Many people do not last more than five years,” he said. “They are going home.”
Christopher Rim, 25, is one of the newcomers who is unsure whether his move will be permanent. Founder of the education and university consulting firm Command Education, based in New York, Mr. Rim usually meets with his clients virtually, so he decided on a whim in January to move from Manhattan to Miami. He spent two weekends looking for a condo in Miami. When he found a two-bedroom apartment with a balcony that he liked in the Surfside area, he presented an offer in a few hours, closing for about $ 4 million.
Rim said he sees the venture as an experiment with life in Florida. “This is a time to experiment, to see what it’s like for a year or two,” he said. “I’ll probably be back in New York, but who knows?”
He offered his two-bedroom, two-bathroom Tribeca apartment for sale for $ 3 million, but said he was in no hurry to sell it. In the meantime, he plans to open an office in Miami, but said his company will remain based in New York. “It’s just easier,” he said.
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Out-of-state buyers may be spending a lot of money on properties in Florida, but many are also maintaining homes elsewhere. Jessica Cunningham, a 44-year-old interior designer, lives mainly with her husband and four children in the suburbs of Chicago. They have been vacationing in the Palm Beach area for years and have spent even more time there during COVID. This summer, they started looking for a home in the area to buy as a vacation property. They found the market “insane”, with houses selling in hours, she said. Finally, in November, they paid about $ 1.1 million for a three-bedroom home in West Palm Beach.
They thought about moving to Florida permanently, but ended up not even keeping the house. When they finished renovating it, she said, they realized that “the market is so crazy that we could make some money out of it”. A few weeks ago, they listed the house for $ 1.45 million with Lilly Leas Ferreira, of Brown Harris Stevens, and it was sold to a buyer in cash for the full price before it even entered the market.
Meanwhile, this kind of rapid home price appreciation is one of the factors driving people to leave Florida, said Glenda Nichols, a real estate agent for Barn Owl Realty in the mountain town of Ellijay in northern Georgia. Since the start of the pandemic, Ms. Nichols said she has noticed a 30% increase in customers moving out of Florida, citing traffic, heat, humidity from the State of the Sun and rising housing costs. “You put it all together and a lot of retirees are leaving Florida and coming to North Georgia.”
One of Mrs. Nichols’ clients, David Lowe, sold his longtime home on the outskirts of Sarasota, Florida, in 2019 for $ 375,000 and bought a similarly sized house on a larger plot of land in Northern Georgia for $ 180,000. A semi-retired metal sculptor, he spent another $ 50,000 building an art studio on the forest property. For now, he still has a small home in Florida, but in the coming years he plans to make Georgia his home full time. From New England, he wanted a change in the flat Florida landscape and the “too hot” climate. “I woke up every morning thinking, ‘Now, why am I still in Florida?'” He said.
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Georgia and the Carolinas have become increasingly popular alternatives to Florida for retirees over the past 15 years, said Jon Rork, professor of economics at Reed College in Oregon. He said that many northerners retire initially to Florida, but end up returning home or moving elsewhere in the southeast, becoming what is known as “defenders”.
Alan and Carol Ward moved from Massachusetts to the Sarasota area about eight years ago. But they found the summers “stifling” and missed the four seasons, said Ward, director of the planning and design firm Sasaki. In the fall, they purchased a four-bedroom, three-and-a-half bath house in the mountains outside of Greenville, SC, at The Cliffs at Glassy golf community. The area has distinct, but mild seasons. The summer “is still hot in South Carolina,” said Ward, “but it’s not as intense or long as it is in Florida.”