Increasing real estate and rental costs make things more problematic for elderly sun-seekers
While South Florida has for decades been the destination of choice among elderly Canadians seeking inexpensive wintertime residences, snowbirds from across the country are finding it harder to enjoy paradise amid fierce competition in the rental and homeownership markets, which is exacerbated by the rising cost of living.
Demand has skyrocketed in Florida’s real estate market as the rise of remote work and regulations put in place to fight COVID-19 empowered droves of Americans to flock to the Sunshine State, reported the Financial Post.
According to the United States Census Bureau, the state last year saw the biggest net domestic migration in the country, with an influx of 220,890 persons in addition to 38,590 immigrants.
Read more: Why retirees are fleeing to Portugal, Costa Rica, and Turks and Caicos
More than 61,728 people from just New York state moved to Florida last year, according to statistics collected from the Florida Department of Highway Safety and Motor Vehicles, and this year's rate is increasing.
The state's property market has experienced a significant price increase because of this demand and the historic pandemic lows in lending rates.
Florida experienced the nation's fastest house price growth in both the second quarter (6.74%) and the 12-month period ending in June (29.77%), the latter of which was more than four percentage points more than the second and third fastest growing states, North Carolina and Arizona.
The upshot has been higher prices for foreign buyers. According to Florida Realtors, a trade association, the median price paid by foreign buyers for real estate in Florida in 2021 was $347,300 and had climbed by 33.1% over the previous year.
The group's data reveals that while Canadians continued to represent the largest international buyer segment in Florida in 2021, representing 19% of purchases, the share of buyers they account for has drastically decreased from 2019, when they represented 23% of all foreign purchasers.
Read more: Snowbirds take a hit
The situation is no better for renters.
Fort Myers, a well-liked vacation spot for Canadians and one that was directly struck by Hurricane Ian earlier this month, had the largest increase in rentals, at 32.4% over the same period in 2021, based on a Florida Atlantic University analysis of 107 significant real estate markets conducted in April.
The Missouri Economic Research and Information Center's Composite Cost of Living Index, Florida's cost of living is 0.3% more than the national average. With a 5.6% increase in price over the national average, groceries are the costliest good in Florida.
As affordability challenges mount, the loonie has plummeted versus the dollar, creating a double whammy for both purchasers and renters.
