It is no secret that the real estate market of Florida is enjoying its heyday, but, in fact, much more is there to this phenomenal growth and development than what two obvious reasons-mild weather and beaches-already promising appeal to many prospective clients. For two decades now, Florida has served as a magnet for an onrush of people who have created probably the most dynamic housing market in the country. Whether it is people from other states moving into Florida for tax benefits or international immigrants looking to start anew, Florida has become one of the highest destinations in the U.S. for relocations.
In this article, we will discuss the historic and recent population trends, look at the most affected areas, discuss the causes of this surge, and explore the massive impact on Florida’s housing market. Finally, we will discuss the next five-year predictions, both in population and housing needs, which are on their way up. By the end, you’ll see why it’s not just the waves on the coastline that are rising in Florida.
Florida’s Population Surge: A 20-Year Look Back
Putting the real estate market in proper perspective requires going down memory lane to see how the population has been trending for the last 20 years. The state of Florida’s population stood at approximately 16 million in the year 2000. Fast forward to 2020, and Florida witnessed its population balloon to approximately 21.5 million, which translated to an increase of 34%. In that same period, Florida was repeatedly in the top tier of the fastest-growing states in the nation, adding retirees, sun-lovers, and job seekers into its fold.
But the rate of growth really picked up in the last decade. Between 2010 and 2020, Florida added close to 3 million residents. In the last five years, the population has ballooned an additional 4.7%, swelling by a whopping 1 million people between 2020 and 2022. Actually, the pace of growth is quickening, not slowing-a trend that bucks national trends, which often see population growth flatten.
The Last 10 Years: A Population Explosion
Two of the main drivers of population growth for Florida over the past decade have been retirees and working-age adults who moved to the state looking for a job and a better lifestyle. But another major turning point came in 2020 with the COVID-19 pandemic.
The ability for remote work turned the faucets on for many professionals to leave high-cost, high-congestion cities such as New York, San Francisco, and Chicago. Without a state income tax, a warm climate, and most importantly, relative affordability, Florida became the place to go. Cities like Miami, Tampa, and Orlando saw a number of out-of-state buyers who sought to escape lockdowns and high living costs. Suddenly, with remote workers, they could have a year-round vacation vibe while still holding their job somewhere else. This fact actually accelerated Florida’s growth.
The Last 5 Years: Sunshine State or Golden Ticket?
Over the course of the last five years, the story of Florida population growth took new dimensions. Between 2017 and 2022, migration hit a fever pitch as over 2 million new residents moved into the state during that half-decade alone. That boom wasn’t only limited to retirees and snowbirds; suddenly, younger professionals, especially from tech-heavy areas, were booking one-way tickets down to Florida. Especially, Miami got the nickname “the new Silicon Valley” because of a whole flood of new tech startups and venture capital firms that moved operation there.
Besides this domestic migration, international immigration also accounted for much of Florida’s growth. For instance, in 2021, over 250,000 people immigrated from other countries into the state of Florida. The lion’s share of this influx was from Latin America, the Caribbean, and parts of Europe, making Florida’s rich cultural setting even more variegated. This created even further demand for housing across the state, especially in cities such as Miami and Orlando.
The Last 2 Years: Perfect Storm of Growth
If you thought Florida’s growth was going to start slowing down, think again. It’s been an especially wild last two years, where a number of factors have converged:
Post-pandemic migration: Florida saw more people moving for personal and professional reasons. Since remote work has become more normalized, Florida increased in attractiveness to those people seeking a better quality of life.
Tax benefits: Lack of state income tax in Florida kept it an attractive haven for net-high-worth individuals in high-tax states.
Political relocation: Florida’s political climate was considered more conservative than that of some northern states and thus attracted people desiring a different kind of governance.
This recent population explosion is most keenly felt in urban and suburban regions, while rural Florida is not being left behind. In fact, it’s the secondary cities that undergo even more dramatic growth; Sarasota, Fort Myers, and Naples also grow in double-digit fashion as retirees and working-age professionals reposition themselves from the northern United States.
Area of Greatest Impact: Hubs of Growth
This is not an even distribution of the population across the state; there are regions that have taken the most hits because of this surge. Let’s dive into the major hotspots:
Miami-Dade County: Miami is still number one throughout the country among international migrants, many of them from Latin America. Still number one, it also attracts tech entrepreneurs and remote workers from all over the country, making it one of the hottest real estate markets in the state.
Tampa Bay Area: While Tampa is still a bit more affordable compared to Miami, it is becoming increasingly popular due to the growth of technology and finance industries in the region. In turn, the Tampa housing market has skyrocketed.
Orlando: Central Florida, and most notably Orlando, has been considered for years as a place of tourism, but its appeal is growing fast. It also is becoming a strong technological hub.
South West Florida: The coastal areas surrounding both Fort Myers, Naples, and Sarasota have been inundated with retirees, making this easily one of the fastest-growing parts of the state.
Jacksonville: This north Florida city is growing massively in terms of housing affordability and proximity to Georgia. It is also attracting families to more suburban lifestyle settings.
Why Is Everyone Moving to Florida?
There are a number of reasons why Florida continues to stay in the population boom:
The remote work revolution made it possible for millions to move to more desirable locales. For many, Florida-with its year-round sunshine, no state income tax, and relatively lower cost of living-checked all the boxes.
Tax-Friendly: Florida remains a haven for wealthy individuals and retirees alike, seeking to avoid high state taxes. Their taxes are also favoring corporations in their policy, hence the reason businesses are relocating from the high-tax states.
Quality of Life: For many years, Florida has been the retirement utopia. But with new construction, new rises in health care infrastructure, and a variety of job opportunities, the state is just as attractive to younger age brackets.
International diversity attracts many immigrants to Florida, a gateway to both Latin America and Europe, in search of a culturally diverse and business-friendly atmosphere.
Job Market Boom: The economy in Florida is on an uptick, with heavy presences of industries such as tourism, healthcare, real estate, and lately technology. This economic uptick continues to feed into population gains.
Impact on the Real Estate Market
Now that we have deconstructed the “why,” let’s talk about the “how.” How is this population surge actually affecting the real estate market?
Demand for Housing: With one million new residents in the past two years alone, the supply of houses has not kept pace with the demand. Due to this imbalance, property values have shot up in cities like Miami, Tampa, and Orlando.
New Construction: Despite overtime by builders across the state to meet demand, supply chain issues and a lack of labor have managed to put the brakes on new home construction. This has kept housing prices high, while multiple bids for homes become the norm.
Rentals versus Buying: With fewer homes, rentals are starting to become one of the only good options, especially when people are only relocating temporarily or waiting on just the right home to pop up in the marketplace. But rental rates are also on the rise, further squeezing affordability from renters and potential homebuyers alike.
Outlook Over the Next 5 Years
Meanwhile, the population of Florida is projected to swell by another 3 million people by the year 2028, reaching a population of almost 25 million. In theory, this will keep the pressure that is already on the housing market going and even more so in urban and coastal places.
With the continuous movement to Florida of more retirees, international migrants, and remote workers, the demand for housing in the state will always surge. Developers need to keep up with demand for single-family homes, multifamily units, and vacation properties in the near future.
Schools and healthcare facilities would have to be radically improved or built to cater to the new residents. Congestion on Florida roads has already become a nightmare in some of Florida’s most popular cities, and unless local governments begin to invest more heavily in infrastructure, growth could prove to be a double-edged sword, frustrating both new and longtime residents.
The Future of Florida’s Housing Market: What’s Coming?
The following are a few of the major trends that are likely to control the housing market in Florida over the coming five years, including:
Continued Price Appreciation: Home prices in Florida will continue to grow, though not at the blistering pace we have witnessed during the past two years. The demand will still far outweigh supply and keep housing competitive.
Urban Sprawl: In the coming decade, continued urban sprawl will see Tampa, Orlando, and Miami extend their grasp to hold new residents. Soon, suburban and even rural areas could become the next markets in real estate, as buyers also seek a way to afford homes and reduce congestion in traffic and people.
Vacation Homes and Rentals: As long as Florida remains one of the most favorite destinations to travel to, its real estate market for vacation homes and rentals will continue to grow. Investors will further look at Florida as the best place to invest in buying short-term rental properties, mainly in Orlando and along the Gulf Coast.
Sustainable Building: With Florida’s frequent hurricanes and its vulnerability to climate change, sustainable and resilient construction may become increasingly stressed. Storm-resistant houses and others that lessen the impact on the environment will be common, more so in coastal areas.
Increased demand for retirement communities: With the Baby Boomers well into retirement, look for increased demand for retirement communities, especially in areas like The Villages-one of the fastest-growing retirement communities in the country-and along coastal areas where retirees traditionally go. Builders will likely continue to focus on age-restricted, amenity-rich communities.
Affordable Housing Crunch: The affordable housing crunch is on the rise in Florida. With increasing prices, finding a house within one’s budget has started to be very hard for low- and middle-income residents. This will be a concern continuing at the center of discussions about housing policy in the state for many years to come.
Conclusion: Sunny Prospects Ahead
Florida’s population growth doesn’t appear to be slowing down anytime soon, neither does its real estate market. Exciting but challenging times are foreseen in the state of Florida with millions of new residents expected to make their way to the state within the next five years. From retirees and international migrants to young professionals escaping big cities, Florida’s appeal is wide-ranging. This continued growth will also pressurize the housing market of the state, thus opening several opportunities as well as challenges for buyers, investors, and developers.
In other words, Florida is not merely growing; it is booming. The state offers the perfect blend of lifestyle benefits, economic opportunities, and tax advantages, making it one of the hottest real estate markets in America today. But until challenges of housing demand and infrastructure are resolved, there may be some literal bumps in the road in an otherwise bright future with Florida continuing to attract people from every nook and corner of the world.
In fact, whether one wants to invest in real estate, move due to work, or retire to paradise, Florida will be the place to be; now and well into the future. Just don’t forget your sunglasses.