We have three friends that have all bought vacation places in Florida over the last few months. The Sunshine State is getting some great new friends, who may become permanent residence, in time.
Our friends are settling all-over the state. One couple bought a place on Merritt Island, near Cape Canaveral (they can see rocket launches from their front porch). Another couple bought a place in Punta Gorda near where the big hurricane recently hit. And, the third couple are closing this week on a luxe new-construction home near Sarasota.
Florida real estate prices keep going up & up. While prices in many places are starting to fall behind rising interest rates, that’s not really happening in Florida. I’m guessing that because a higher share of these transactions are second-homes, the buyers are a bit insulated from the rising cost of borrowing.
We are getting ready for our 4th winter in Florida with an extended snowbird stay. We’ll be down there for about 10 weeks this year during January, February, and March, staying in longer-term Air BNB and private rentals. Two-and-a-half months isn’t long enough for us to think we need to invest in something of our own, but I think we are getting closer to making a longer-term commitment.
Image Credit: (c) MrFireStation.com
MrFireStation 
I think a big part of the draw is people changing their tax home to avoid high State Income Taxes in their former home state. Expect to see them live in FL for 26 weeks and a day. Many of the people moving there are moving from very high price areas such as New York City and The People’s Republic of California. The tax savings alone might be covering a great deal of their ‘second’ housing cost.
As an example, The People’s Republic is trying hard to drive long-term, productive residents out of the state. The latest is the Demonrats that control our state just completed a study on the state paying reparations to descendants of slaves of $226K per head. The total tab would come to around $566 billion, which is about twice the annual operating budget. The state is currently running a budget deficit that they are going to have to figure out how to address. Guess where the money is coming from?
Note that California was never a slave state. Current Governor Newsom made a total mess of San Francisco, before failing upward to become Lt. Governor, followed by Governor. I hear rumblings with his good teeth and hair and gravely sounding voice, we wants to mess up the rest of the country.
Florida is doing well, because they are not suffering from bad governance and have lots of sunshine.
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Agree – there is no doubt that the state tax arbitrage is a big, structural driver of real estate appreciation in red states. The amount we could save from MN to FL is staggering.
A realtor friend said that on average a net positive 6K people move to FL every week. Still, you can’t build a tower to the sky, so at some point the appreciation has to slowdown. I guess in a country of 325 million people, that could be a while from now!
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As someone who is a refugee from CA and is now a domicile resident of tax free SD, this is accurate.
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You really upgraded Governors.
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How about summer in the Badlands and Winter in Florida?
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Sounds like a plan 👍🏻
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We bought a condo unit in Bonita Springs in 2019, as an Air B&B and its always been a good rental. I think Florida keeps growing because the beaches are beautiful, and the weather is great, which are things people are willing to pay a premium for.
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I’m guessing you thought you were paying a lot in 2019, but once the pandemic hit, your timing was perfect. I know a lot of places that have doubled in value since then. Agree that Florida has its own drivers for real estate.
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