Today's Local Real Estate News: "There are now more people who are leaving than who are moving to Florida."

Earlier I poster an article title, The Myth of Population Growth, where I discussed Florida’s urban legend often propagated by Realtors® and others within the real estate industry. Finally, the popular press is starting to pick up on the falsehood of this myth.

A reader recently sent me a great Wall Street Journal article, which is must read for anyone following the local market. Here are some highlights:

“For almost a century, Florida has been a magnet for mobile Americans. The state's plentiful sunshine and open space has attracted "snowbirds" fleeing winter, retirees living out the last chapter of their lives and down-on-their-luck workers in search of jobs. A steady flow of newcomers has kept the state's population growing faster than the nation's, often much faster, since the 1920s.”

“But for Americans on the move, Florida has become a less-appealing destination. Moving company Atlas Van Lines brought 6,700 families into Florida last year and took 8,000 out, the first time it has moved more out than in. The number of people from other states who switch to a Florida driver's license is down more than 8% from last year. And the state's crowded schools actually lost students last year, prompting many counties to cut back on their construction schedule and, in some cases, look to close schools. While foreigners continue to arrive at a rate of about 100,000 year, migration from inside the country is slowing.”

“A Florida rebound would likely require housing prices to fall further than they already have. With the help of subprime and no-money-down mortgages, the state became a place for rampant speculation that more than doubled prices in a four-year period. The price appreciation fueled a refinancing boom that gave consumers access to billions in home equity, and they spent it. Research firm Moody's Economy.com estimates the real-estate sector has been responsible for one in three new jobs over the past few years, everything from mortgage brokers to Home Depot Inc. stockboys. But the rise in prices also locked out a lot of prospective migrants from other states. While home prices were doubling, the state's personal income rose just 31%. That made it tough for anyone living on Florida wages to crack the real-estate market and recent declines haven't offset that.”

“What's more, as Florida's population has swelled, the state has created a two-tiered tax system that hit newcomers and part-time residents harder than longer-term residents. For tax purposes, permanent residents receive a $25,000 "homestead" reduction in the assessed value of their home, which reduces their property taxes. A 1992 amendment to the state's constitution caps the annual increase in residents' assessed home value at 3% a year or the rate of inflation, whichever is lower.”

“The effect is that over the past few years, as home values have soared, newcomers have paid higher tax bills. For instance, the owner of one North Tampa house assessed at $214,764 paid $1,992 in taxes last year, according to the Hillsborough County property appraiser's office. A new owner, who made it his primary residence, would pay about $3,820 in taxes next year, assuming the house doesn't decline in value.”


Similarly, The Herald Tribune published another great article discussing the same topic. Here are some highlights:

“The conventional wisdom is that booming growth for Florida is as sure as orange blossoms in spring and hurricanes in summer.”

“But some economists -- armed with fresh anecdotal evidence -- think that, at least in the short term, high insurance rates, high property taxes and heady competition from other retirement states is taking some of the wind out of the Sunshine State's sails.”

"The old axiom says that Florida picks up 1,000 residents each day, but evidence is mounting that this long-lived assumption is no longer valid."

“‘We always make these assumptions: You keep hearing '1,000 a day,' and 'every baby boomer is loaded,'’ said Lou Goodkin, a Florida consultant who was among the first to warn of South Florida condominium overbuilding.”

“‘There are now more people who are leaving than who are moving to Florida,’ [Jack] McCabe said. ‘I think without a doubt there is a preponderance of circumstantial evidence and anecdotal evidence to contradict the old adage that there are 1,000 people a day moving to Florida.’”

“In years gone by, Allied Van Lines gave Florida the moniker "Magnet State" because it had so many more inbound than outgoing shipments.”

“Earlier this year, the company reported that outbound residents outnumbered inbound for both Florida and California. The Sunbelt was a still a big draw, with Texas the No. 1 destination, followed by North Carolina and Georgia.”

“‘We have Realtors taking Floridians by the busload to buy in North Carolina,’ said McCabe, who works in Deerfield Beach, part of the crowded Southeast Florida metroplex.”