Warm winters. No state income tax. What’s not to like?
Let’s add to that… How about this?
That’s the median price of the homes that sold in Jacksonville, Florida – the closest major city to me.
And home prices that are probably cheaper than where you live now.
It’s no wonder folks in high-tax states are flocking to Florida.
It has been a big win for housing prices. And it explains why the boom isn’t over yet.
Let me explain…
Think about this: You get twice as much house in Jacksonville today as you get in Chicago, Illinois. No kidding.
The median price per square foot in Chicago is twice that of Jacksonville. (Keep in mind I’m not pushing Jacksonville specifically… It’s just what I’m familiar with.)
If I was sitting in Chicago today – in mid-January – I would think, “Oooh, Florida… Those warm winters, no taxes, and low house prices sure look appealing right now!”
It turns out, over the last eight years, 75,386 Illinois residents actually made that leap. That’s right… more than 75,000 people LEFT their cold, expensive, high-tax home state – and moved to Florida.
Here’s where it gets interesting… The average income of those departing Illinois taxpayers was $135,540. Those who stayed averaged at less than $79,000. So the story is pretty simple: Illinois’ best taxpayers are bringing their money to Florida.
Florida isn’t the only state getting tax refugees. Texas is right up there, too…
While 75,000 Illinois residents moved to Florida, roughly 69,800 Illinois residents moved to Texas. Warm winters, lower taxes, and cheap home prices did it. (Texas houses are priced even lower than Florida houses.)
All told, Illinois has lost about 866,000 residents over nine years, with Florida as the top destination.
But it’s not just Illinois… 912,000 Californians have moved out. And 1.4 million New Yorkers have fled.
Where are the Californians and the New Yorkers going?
It turns out, the Californians are moving to Texas. And the New Yorkers are moving to Florida. (We can pick the transplants out immediately here in town… We say “Floor-duh.” The New Yorkers say “FLAAAR-uh-DAH.”)
Here in Florida, the local folks don’t get it. They think the transplants are buying at the top.
In the Jacksonville area, home prices are up 75% from their bottom. Folks here think that prices have gone up too much… that the peak has to be near soon.
This is one rare case where the local investors have it wrong, and the “foreigners” have it right.
The latest report from the Northeast Florida Association of Realtors (“NEFAR”) tells me everything I need to know… Prices are up, but there are no signs of a top here, yet. Here are some of the main takeaways…
- Housing is extremely affordable (at 136 on the Housing Affordability Index, which means typical folks can afford 136% of a typical home).
- The supply of homes available is extremely low. It would only take about three months for the current inventory of homes to sell at the current pace – which means there’s price upside ahead.
- Housing starts are also still below historic averages… So there’s still not enough supply coming in yet to meet demand.
- Only 12% of houses sell above list price, so it’s not a “hot” market.
I’d bet that many parts of Florida and Texas are like my local area. The locals are “anchored” in the old house prices… But they will never see those prices again. All they see is how much prices have gone up. They don’t see how much value is around them – right here, right now.
We have a “perception versus reality” mismatch – which is something I absolutely love to see as an investor. That’s how you can find the best opportunities before everyone else catches on.
I’ve been heavily invested in Florida real estate for nearly a decade to take advantage of this trend. And if you’re able to do the same, I encourage you take advantage as well.
The simple truth is that housing has boomed in areas like Florida and Texas… But it ain’t over yet.
— Steve SjuggerudWhy Everyone is Getting Rich Right Now – And You’re Not [sponsor]
Hundreds of thousands of Americans have been hit by a wave of wealth. Over the past year, the U.S. has minted an average of 1,800 new millionaires a day. How did they do it? For the first time in history, two of these millionaire investors have joined forces to help you learn the secret moneymaking strategy of the wealthy and connected. Click here to watch their presentation.
Source: Daily Wealth