The Great Florida Migration is Reversing

So according to a new Redfin article, the great Florida migration is coming undone. Folks, they're saying it's reversing course. We're seeing similar things in Texas from what they're reporting. I don't know if it's completely becoming undone, but it's starting to get more noticeable in the larger cities. This article specifically focuses on locations like Tampa, Orlando, Jacksonville. We saw this here in southwest Florida last year. This is kind of old news to us. We've been seeing the trend reverse pretty steadily over the past year and a half. And I've kind of felt like it's going to spread out to the rest of the state that appears to be happening at this point. We just got the September data released for the housing market from Florida Realtors Association and sales statewide of single family homes are down 12% year over year. That's a pretty substantial drop statewide condo sales, even worse, but we'll get into that in another video. The median sale price and average sales price has stayed pretty stagnant though. There's not a lot of movement going on there. And even the article from Redfin here kind of echoes that and says, we haven't really seen major price movement statewide since about March of 2023 is where they pegged it in my area. I guess that's what they're calling peak statewide in my area, southwest, Florida, Charlotte County, our peak parts of Sarasota. Our peak was really around July of 2022 single family home prices for here have kind of slid 15 to 25% since that time. But statewide, we're just now starting to see some stagnation in pricing and listings start to pile up. And we know why that is guys. It's because we have so much inventory and it continues to grow statewide. So in the article, they actually interviewed the chief economist for Florida Realtors. And he said, there's definitely been a sizable increase over the past couple of years of homes coming to the market. We could see price deterioration in some areas, and we've already seen it in some areas such as my location in southwest Florida, but they think it's going to continue to spread out throughout the state. So this is the article I referenced. The great Florida migration is coming undone and they tell the story of Anthony Holmes. He was part of the great Florida migration in 2021. He moved here from Virginia to a gated community in Tampa. He now has to leave. And what he's finding is buyers are increasingly hard to find, which is, is true. Demand is down. Like I mentioned, he paid 550,000 for his five bedroom home and spent another 50,000 on solar panels and interior improvements. He had to move back to Virginia for work, which is what a lot of people are dealing with here returned to work orders. And he expected this hell, his house rather quickly, but he listed it all the way back in February. He's had no luck. He's dropped the price five times to 583,000. And he'd be happy to simply break even at this point. I suspect he's not going to be able to even break even. And they have him quoted as saying, I can't unload the thing in eight months. I've had zero offers. No one even showed up to the open houses, nobody. And this is echoing what's going on across much of Florida. According to this realtor.com article and things we've seen and the Western coast, a surplus of inventory and dwindling buyer interest are slowing sales and keeping homes on the market longer. And keep in mind guys, this article was published on October 7th. This was before Milton even happened. So that's not even factored into this. So as far as the number of new listings that are on the market, we saw a 39% increase statewide for single family homes. That's a big number. If you guys have seen some of my other numbers from the previous year in Southwest Florida, that's kind of kids, child's play. Uh, but it's still, it is a large increase down here. We have seen a hundred percent, 120% in some areas over the past year. So statewide we're up about 40%. The month's supply of inventory is also up about 40% sitting at 4.6 months of inventory. Last year it was three and change. So 4.6 months statewide is still highly considered a seller's market, but it's getting very close to being balanced and we're starting to see the shift statewide echo what has happened here in Southwest Florida. There was a time when Southwest Florida's inventory was 4.3 months and I started raising alarm bells here saying, if this continues on this trajectory, very quickly, we're going to get into a buyer's market and we're going to have too many houses. And that's exactly what happened now. Will that continue statewide? Potentially? I don't know. We'll have to see how the year goes with the two back to back hurricanes. You guys know a lot of people are thinking about leaving. So the outbound migration could continue. I don't know if it's going to outpace the inbound migration, but it's certainly not going to be the demand that we've seen over the previous years here in the state of Florida. Now, like I said, in this article, they focus heavily on Tampa. Tampa Bay has been like the West coast stronghold for housing. The place has been unbreakable, but it's starting to come apart very slowly. Things are starting to come apart at the seams in Tampa for single family and condo. They're still by no means in a buyer's market, but according to the article, about half of the homes listed for sale in Tampa experience priced reductions as of September 9th, that's the third highest share of any us metropolitan area really only beat out by places like Austin, Texas. So we're seeing in the nation, some of the highest amount of price decreases in the Tampa area right now. And this is a struggle I have with homeowners and sellers here to explain to them that what is happening on the Southwest and West coast of Florida is really a very unique scenario to the rest of the nation. We have some of the highest inventory increases anywhere in the country. We have some of the highest price drops, I'd say the biggest price drops anywhere in the country. We have the most selection of homes for a lot of areas in the country as well. And you guys know why that is. We saw a lot of run up here, really, really unsustainable price run up. Then everybody got smacked with hurricanes, insurance increases, tax increases, and I'll get into the taxes as well because they're absolutely out of control too. So a recent article out of Redfin stating property taxes have surged nearly 60% in Tampa and Jacksonville since 2019. That's crazy guys. Now it is obviously occurring all over the country, but these are some of the hardest hit areas. I believe Tampa was in the top five nationwide. I want to say they were number four or say Miami was number five in this article, but I'll link all this in the description if you guys want to go into it. So that's definitely contributing to our inventory increase and our price drops. And I mentioned earlier in the video, uh, really the only other place with more price drops was Austin, Texas. And no surprise, Texas is echoing Florida. These were the two real big boom States that everybody ran to. And now a lot of people that bought within the past two years are selling. Even longtime residents are leaving, unfortunately, for all the reasons we've documented here. But it is not unusual. They say for many Texans for property taxes to make up 20% of their monthly housing bill. And that's just not the way it used to be. And if you don't have the income to keep up with these kinds of increases, you're going to sell, try to find somewhere cheaper where that is. We don't know. I don't know where everybody's going, but they are selling in these two States. And that's in stark contrast to the rest of the country. According to this article, where nationwide property taxes only make up about 8% of your typical housing bill. So almost double in Texas right now, Florida is not quite there, but they're making up for it. In insurance, the insurance cost on some places here is astronomical. And in the interest of fairness, guys, what I do like to point out on the channel is while we have seen listings go from the peak of 2021 in Florida, from 35,000 single family homes listed to over 95,000 currently, that sounds like an enormous jump. It is. It's almost three times the amount of listings on the market, but that single family homes, when people pull some of these stats, they leave in manufactured, they leave in condos, apartments, and then that number can seem very inflated compared when you throw all those types of properties in there, you can get to 200,000 very easily. But I can tell you it's about 95,000 homes on the market in the state of Florida. And for contrast, after 2008, there was over 250,000 homes on the market in the following fallout in the following years. So we're not quite there. You know, I'd say we are elevated pretty highly above 2019 levels right now statewide. So there is elevated inventory, but it is not in the realm of something like 2009, 2010. Will it get there? I don't know, but I do have to point that out in the interest of fairness, that it's not really even close at this point. Well, it looks like I'm just not going to get any sun here today, guys for Florida. It's a rare event, but it occurs. And we're right around Halloween. I don't know anywhere I've lived in the country. I don't know if you guys noticed this. Maybe I'm crazy. We'll see how it is this year, but I feel like every Halloween is like cloudy if not rainy. And from when I was a child, I just feel like it's going to rain on Halloween, 4th of July too. You're going to get some clouds. Just seems to happen every time almost. And guys, like I do every month, I will have a full deep dive analysis on the channel about this. We'll go through all the numbers for as many areas as I can cover without making the video two hours long. You guys kind of have seen my other ones. You know how it goes, how it works out. Another thing they mentioned in the article is institutional investors. If they start to cut and run, things can escalate very quickly. That is exactly what happened here in Southwest Florida. We had everyone come here, buy rentals, buy things for Airbnb and suddenly find out when the rest of the nation is open, for business, we're not the only state you can come to and party. Oh, sales go off a cliff and that's, that's what's happened. And it's put a lot of those homes on the market. They're still coming on. Rentals are still coming on. Airbnbs are still coming on. So this is what they're starting to see in Tampa. Now it caused a massive, massive inventory surge for us last year. I don't know if that's going to happen up in Tampa. January is listing season. That's when I suspect we'll see a lot of people list who don't want to deal with another hurricane season up in Tampa. I don't know if it's going to push the numbers up into inventory levels like we've had here. We've actually had a pretty strong inventory constriction down here for a long time. We were over 3,100 single family homes listed. Now we're sitting at about 2,500 currently, but that happens this time of year. Inventory tends to go down this time of year. Plus we've had the hurricanes that are going to assist with that. But in some place like Tampa, really anywhere in Florida, if investors get a new tax bill, they get a new insurance bill. The numbers don't make sense or they don't have a really strong vacation season. If they're doing seasonal stuff like that, we could see all the institutional investors start running to the exits. And like Jason Lewis of parcel lab says, if they start to ramp up dispositions, it could have a cascading effect on home prices. So if the investors run statewide, yes, you're going to have a huge inventory influx. Prices are going to go down. It's exactly what happened here in Southwest Florida. Are we starting to see it spread to the state personally? I think maybe, I know it's not really an answer, but we got to wait and see. That's that's my approach guys. Got to wait and see numbers for closed sales being down 12% year over year is a little alarming, but we had elevated sales for so many years. So even a nominal slowdown is going to produce double digit drops like that. Please be considerate. Do not feed the Gators. There's just a little bit of water back there. I don't know if you guys can see it, but people ask me that all the time. Are there alligators in this water? And if there's water, yes, there's Gators in it. Or just assume that there are, don't go near it. Don't go in it unless it's your pool. And sometimes they show up in your pool as well. I'm sure you guys have seen videos on the internet. So that's all I got for today, guys. If you like this video, give me a like, share, subscribe, and I'll see you next time.