The year 2006 was almost 15 years ago but for homeowners in Florida, it sometimes seems like it was just yesterday. It was at that time the entire country experienced one of the biggest real estate housing bubbles in history. While a booming real estate market is often the sign of a good economy, it spelled trouble for those in South Florida. The Great Recession sent an alarming number of homeowners in Florida into foreclosure and that still has many residents on alert any time there is a significant increase in the housing economy.
South Florida has always been an attractive place to move to for other Americans, but the pandemic has only made the option more attractive for many. Now, places such as Miami, Fort Lauderdale, and West Palm Beach are becoming crowded and real estate agents are just trying to keep up. In these parts of the state, home sales have more than doubled, and the trend has some wondering if that really is indicative of a good economy or if it’s just the beginning of another disaster. Fortunately, it is likely the former.
Why Are So Many People Moving to South Florida?
Anyone who lives in South Florida knows of the many benefits this beautiful part of the country brings. The Sunshine State offers gorgeous weather all year long, the culture and lifestyle are attractive to many, and there is no state income tax. The pandemic has only accelerated the move for families, small business owners, and other companies.
The pandemic in particular, drove people to Florida. In the first quarter of 2021, there was a reduction in residential home sales of 6,095 from the first quarter of last year, according to the ISG Miami report. These stats show that people are flocking to South Florida in droves, and they are scooping up any available real estate when they do.
Before determining whether the current growth is creating an unmanageable bubble, it is important to consider the two demographics that have been moving to South Florida during the pandemic. The first group is made up of renters who fled their home states during the pandemic. These new residents came from states such as California, New York, and Illinois, at a time when harsh weather and increasing coronavirus case numbers no longer made those areas as desirable. The second demographic is made up of individuals seeking relief from both state and federal taxes.
The pandemic also taught many people that they could work from home, and that they want to keep doing so long after the pandemic is behind them. This realization resulted in many people pulling the trigger on that move to Florida they always wanted to do. Now, as the demand for single-family homes grows even larger, inventory is dwindling while vaccinations increase every day, and that has led to a new interest in both commercial real estate and condos. The question is, are we in another bubble?
Renewed Interest in South Florida Properties Probably Not a Bubble
A hot real estate market is always good, and business opportunities are also on the rise in South Florida. Still, for many, the fear is very real that it is a bubble and that we are on the verge of another collapse. Fortunately, that is probably not the case. When comparing the current market to that of 2006, there are a few key differences that support the sustainability of the current demand.
Prior to the housing market collapse of 2008, the real estate market in America, including throughout South Florida, was largely driven by foreign investors. That is not the case today, and people are no longer just looking to buy a vacation property in the state, either.
Today, people are looking to make Florida their permanent residence. When people move here from other states, they move their entire lives, enroll their children in our schools, set up businesses and yes, purchase homes. While the foreign investors of two decades ago drove the tourism market, today’s buyers are building businesses and helping to fuel the economy as a whole. The impact of new migration to Florida is significant, and beneficial, to those who already live here.
The fact that people are coming to Florida in droves in an effort to avoid state taxes is also a boon to residents of the Sunshine State. Tax law is unlikely to see significant changes in the next five years, which will encourage new residents to stay and deepen their roots. This also means the future is likely more sustainable than it was just prior to the Great Recession.
The current economic growth in South Florida is also encouraging, and that also is not likely to go away any time soon. Miami Mayor Francis Suarez has said that South Florida is set to become the next Silicon Valley, and that very well could be true. The current influx of new residents has led to a diverse creation of jobs from healthcare to tech and education. The demand for school has also gone up, which also increases the demand for jobs.
There is little doubt that the economy in South Florida continues to expand, and the attractiveness of the area will continue to drive people here for several years to come. Fortunately, this is not 2006 and it is not 2008, either. Unlike Florida’s past history, this growth is very positive and more importantly, it is sustainable.
Our Foreclosure Defense Lawyers in South Florida Can Help if You Fear Losing Your Home
It is true that the current environment in the Sunshine State is not likely going to collapse, but our South Florida foreclosure defense lawyers also know too many people still face the prospect of losing their homes. If you are facing foreclosure, our skilled attorneys at Loan Lawyers can advise on your case, the defenses available, and will give you the best chance of saving your home. Call us today at 954-807-1361 or contact us online to schedule a free consultation.