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making it less attractive.

making it less attractive.

making it less attractive.

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Florida is the second most expensive real estate market in the U.S.

The surge of buyers coming to Florida for its consistently warm climate during the lockout period has pushed the state to new heights. According to a new study from Zillow tracking national home price changes since the pandemic, Florida is the second most expensive real estate market in the country. Florida's market is valued at $3.85 trillion, edging out New York ($3.69 trillion) and Texas ($3.39 trillion), according to a Bloomberg chart based on Zillow data. California remains untouchable in first place with a value of $10.18 trillion.

Population growth and competition in the real estate market

Florida's growing population has fueled its growth and is fueling new construction. Since the pandemic began, 655,000 new residents have arrived in Florida, according to census estimates reported by Insider in March. Real estate prices in the state also rose due to increased competition for existing properties.

Of the six markets that have gained the most value since COVID-19, four are in Florida, including Tampa (88.9%), Miami (86.6%), Jacksonville (82.4%) and Orlando (72.3%), according to Zillow.

Florida's attractiveness and affordability challenges

Florida's lack of income tax, sunny weather and luxurious beaches attract many people. Stephanie Mortensen moved from Virginia to Florida in May. She was looking for a home along the coast and settled on a tiny $159,000 house in a community outside Tampa. "I don't regret the move," she told Insider in August.

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"I miss the people, but I don't miss Virginia. My plans are to stay here as long as things are going well. "

A July study by the University of Florida and Florida International University found that the state is home to the five most overvalued housing markets in the United States. For example, Tampa residents are paying a 43% premium for their real estate properties over standard rates, Insider previously reported.

The rising cost of real estate is creating affordability issues for new residents and longtime residents alike. Miami has the highest proportion of renters who spend 30% or more of their income on rent, in the country. About 61 percent of Miami renters are struggling financially, according to a report released earlier this year by Harvard University's Center for Collaborative Housing Policy Research, cited by Insider.

Nicole Panesso, a South Florida local, was paying $1,200 a month for a studio in Fort Lauderdale when she decided to move. "There's just no way for area residents to get by - the wages they pay here don't match the cost of rent," she said. In 2022, she moved to Chattanooga, Tennessee, where the rent for a one-bedroom apartment is $950.

27-year-old David Triana left his Orlando-area rental and moved back to his parents' home in Clermont, Florida, in 2019 to save money on a down payment. He told Insider that he and his fiancée had $20,000 saved up, but it wasn't enough to buy a home amid rising real estate prices and mortgage rates in the area. "If the real estate market in Florida had been more stable and mortgage rates had come down to 3 percent and 4 percent, I think we would have been homeowners for a year by now," he said.

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