Since the start of the pandemic, many people have relocated from their original places to new states, with Florida evidently becoming the state with the highest number of "new immigrants". Indeed, the "Sunshine State", known for its beaches and no state income tax, is very attracting, with young people seeking new opportunities driving the state's economic growth.
While Florida has benefitted greatly, it also faces some challenges, such as rising living costs...
Let's talk about the advantages first🏙
From 2021~2022, Florida's population increased by 1.9%, with a net increase of 417,000 new residents, making it the fastest-growing state in the U.S. According to data released by Smart Asset in November last year, it has become one of the "hotspots" for the millennial generation, with more people wanting to move in in the future.
"Although the housing prices in these areas are much higher than before the pandemic, they are still affordable. In most popular destinations, the prices of ordinary houses are lower than in big cities."
Furthermore, under the push of a strong job market, the economy here can still grow in 2024, with the unemployment rate remaining at a relatively low level. From August to September, the annual wage increase for the year is expected to be 2.6% in the state, higher than the national average of 1.5%. Moreover, the housing market here has not fallen sharply like in other areas. Wells Fargo pointed out that housing sales in Florida only dropped 5%, less than half of the national average of 11%.
Apart from the weather and taxes, a key reason for the population explosion in Florida is the increasing opportunities for remote work and the large number of new businesses settling here. In the 12 months ending in March 2023, the number of company headquarters in Florida increased by 86%, the highest increase among all states.
Now let's look at the challenges🏙
Despite the many benefits, new residents often overlook some implicit costs, such as the cost of home insurance and the rising cost of living. According to Policygenius data, the rate of increase in home insurance prices in Florida is faster than in any other state. Over the past 12 months to May, it has increased by a total of 68%. Due to more destructive weather, Floridians now have to pay the most expensive home insurance and the second-highest car insurance.
Moreover, the state's inflation rate is still far higher than the national average. Of the 23 metropolitan areas tracked by the CPI, Miami's inflation rate is 7.4% higher than a year ago, the highest of all cities and more than twice the national average. Florida is also the fourth most expensive state for healthcare costs, mainly because the state's businesses bear less cost than those in other states.
So, while Florida is one of only nine states without income tax, possibly saving thousands of dollars for new residents, insurance, inflation, and health care costs are likely to offset these benefits. Miami real estate broker Michael Bordenaro once said, 50% of his clients would choose to leave Florida after living there for a few years.