Moving to Florida NO LONGER AN OPTION !

Moving to Florida is no longer as feasible as it once was. The cost of living in the state has experienced a significant increase in recent years, driven by various factors such as an influx of out-of-state and international investors, a retirement wave, and individuals relocating from lockdown states during the pandemic. Housing prices have skyrocketed to the point where it has become unaffordable for the average person in many areas. In this video, Michael Bordenaro sheds light on these pressing issues and shares his firsthand experiences of moving to Florida during the financial crisis and recession of 2008. He discusses the impact of rising costs, property taxes, and the unpredictability of the real estate market, providing valuable insights for those considering a move to the Sunshine State.

The Rising Cost of Living in Florida

Factors contributing to the increased cost of living

The cost of living in Florida has significantly increased in recent years, making it difficult for many people to afford. There are several factors contributing to this rise in cost. One factor is the influx of out-of-state and international investors who are buying up properties in the state. This increased demand drives up housing prices and makes it harder for the average person to find an affordable home.

Another factor is the retirement wave happening in Florida. Many retirees are choosing to move to the state for its warm climate and affordable cost of living. This increased demand for housing from retirees puts additional pressure on the housing market, leading to higher prices.

Additionally, the pandemic has caused many people to move from lockdown states to Florida, further increasing the demand for housing. This influx of people has driven up prices and made it even more difficult for locals to afford a home.

Skyrocketing housing prices

One of the biggest contributors to the rising cost of living in Florida is the skyrocketing housing prices. In areas that were once considered affordable, the cost of buying a home has become shockingly expensive. A study by go Banking rates found that even in the cheapest cities in Florida, a substantial income is needed to make it financially feasible to live there.

For example, in Daytona Beach, which is considered the cheapest city to live in Florida, an income of $76,976 per year is needed to afford the average home value of $285,000. Many other affordable areas in Florida also require a high income, ranging from $76,000 to $90,000 per year.

On the other hand, the most expensive areas in Florida, such as Plantation and Miami Beach, require incomes ranging from $128,000 to $377,000 per year to afford average home values. These soaring housing prices have made it incredibly challenging for the average person to find affordable housing in Florida.

Affordability Challenges in Florida

The author’s experience moving to Florida

The author shares their personal experience of moving to Florida in 2008 during the financial crisis and recession. At that time, they found the cost of living in Florida to be reasonable, albeit more expensive than their previous location in Illinois. However, over the years, the cost of living in Florida has significantly increased, making it difficult for many people to afford.

The significant increase in the cost of living

The cost of living in Florida has risen dramatically in recent years, driven by various factors such as an influx of investors, a retirement wave, and people moving from lockdown states during the pandemic. This increase in demand has led to a surge in housing prices, making it unaffordable for the average person in many areas.

A study by go Banking rates

The author references a study conducted by go Banking rates that examines the average monthly mortgage payment and essential living expenses in the 50 most populous cities in Florida. The study found that even in the cheapest cities, a substantial income is needed to afford the average home value. This study highlights the financial commitment required to live in different areas of Florida.

Affordability requirements in different cities

The study mentioned by the author reveals the affordability requirements in various cities in Florida. It shows that even in supposedly affordable areas, the cost of living has become shockingly expensive. For example, in the cheapest city, Daytona Beach, an income of $76,976 per year is needed to afford the average home value of $285,000. Similar high incomes are required in other affordable areas as well.

The most expensive areas in Florida

The study also highlights the most expensive areas in Florida, where the cost of living is exorbitant. Places like Plantation and Miami Beach require significantly higher incomes, ranging from $128,000 to $377,000 per year, to afford the average home values. These findings shed light on the extreme disparities in housing prices across different areas of Florida.

Property Tax Issues

The author’s personal property tax bill

The author shares their personal experience with property tax in Florida. They mention their property tax bill, which is substantial, even with the homestead exemption. They express concerns about the rising property tax rates and the impact it has on the cost of living in the state.

Concerns about Florida’s property tax and cost of living

The author expresses concern about Florida’s property tax and its effect on the cost of living. They worry that Florida may become as expensive as California, known for its high property taxes. The increasing cost of living, combined with rising property tax rates, puts a strain on residents, particularly those on fixed incomes or struggling financially.

Millage rates and their impact on property tax

The author explains how millage rates play a role in determining property tax bills in Florida. Millage rates are used to calculate property tax based on the assessed value of a property. The author points out that millage rates in Miami Beach and Miami-Dade County have significantly increased, leading to higher property tax bills for residents.

Limitations of the 3% cap on assessed value

While Florida has a 3% cap on the assessed value of homesteaded properties, the author highlights the limitations of this cap. They explain that property tax bills can still increase due to budget adoption and millage rate increases, even with the 3% cap. This limitation may come as a surprise to many homeowners who rely on the homestead exemption for property tax relief.

Challenges with the homestead exemption

The author raises concerns about the homestead exemption in Florida and how it may not always guarantee protection against substantial property tax increases. They argue that budget changes and millage rates can still result in higher property tax bills, even for homeowners with a homestead exemption. This issue adds to the financial burden faced by residents already struggling with the rising cost of living.

Natural Disasters and Hurricanes

The need for a Category 6 hurricane scale

The author discusses the need for a Category 6 hurricane scale in Florida. They argue that recent storms with wind speeds exceeding Category 5 have shown the need for a higher rating. While specific storms are not mentioned, the author points out that hypothetical Category 6 storms have occurred within the last 9 years.

Recent storms with wind speeds exceeding Category 5

The author mentions recent hurricanes in Florida that have surpassed the wind speeds of Category 5 storms. These powerful storms pose a significant threat to the state, its residents, and its infrastructure. By highlighting the need for a Category 6 hurricane scale, the author emphasizes the potential dangers that Florida faces from increasingly severe hurricanes.

Impact of the Pandemic

Economic impact on Florida

The author discusses the economic impact of the pandemic on Florida. They explain how the pandemic has led to an unaffordable housing market, even in areas that were once considered affordable. The pandemic has disrupted the economy and has resulted in job losses and financial uncertainty for many residents.

Unaffordable home prices

The pandemic has exacerbated the issue of unaffordable home prices in Florida. The influx of people from lockdown states and the retirement wave has further increased the demand for housing, driving up prices to unsustainable levels. This has made it exceedingly difficult for people with average incomes to find affordable housing in the state.

Shadow inventory of empty or second homes

Another consequence of the pandemic is the presence of a shadow inventory of empty or second homes in Florida. Many houses and condos in the state are vacant or used as vacation homes, contributing to the high cost of living. This surplus of empty properties further exacerbates the housing crisis, as these homes could potentially be made available for long-term residents.

Considerations Before Moving to Florida

Cost of living

Before moving to Florida, it is crucial to consider the cost of living in the state. The rising housing prices and increased cost of essential expenses make it essential to have a realistic understanding of the financial commitment required to live comfortably in Florida.

Property taxes

Property taxes are another important consideration when moving to Florida. Understanding the property tax rates in different areas and the potential for increases is crucial for budgeting and determining if the cost of living in a specific location is feasible.

Homeowners insurance

Florida’s susceptibility to natural disasters, particularly hurricanes, makes homeowners insurance a vital consideration. It is important to research and understand the costs and coverage options for homeowners insurance in Florida to ensure the financial security of your property.

Other expenses

Aside from housing and property-related costs, it is important to consider other expenses when moving to Florida. These may include healthcare costs, transportation expenses, and the overall cost of goods and services in the area. Evaluating the overall affordability of living in Florida involves considering all aspects of daily life and budgeting accordingly.

In conclusion, the rising cost of living in Florida presents significant challenges for residents. Factors such as increased housing prices, property tax issues, the need for a higher hurricane scale, and the impact of the pandemic all contribute to the financial strain faced by many individuals and families in the state. It is crucial for prospective residents to consider the cost of living, property taxes, homeowners insurance, and other expenses before making the decision to move to Florida. By doing thorough research and planning, individuals can better prepare themselves for the financial commitment of living in the state.