Florida’s influx of rich residents is killing the middle class and housing market |
Florida’s influx of rich residents is killing the middle class and housing market
For decades, the Sunshine State has been seen as, well, sunny and bright. Florida has no income tax, and many metros had a cost of living that allowed for the working class, like teachers, nurses, and hospitality workers, to build a comfortable, middle-class lifestyle.
But times are changing.
The pandemic ushered in a massive wave of wealthy transplants, forcing home prices higher and making the Sunshine State one of the biggest losers in today’s housing market.
Florida gained more wealth from high-earning transplants than any other state in 2023, according to Internal Revenue Service data. The Sunshine State gained $20.65 billion in annual adjusted gross income from tax filers who moved there from another U.S. state, a Realtor.com analysis published March 27 shows. The average income of people who moved to Florida from another state was $122,530, the highest among all U.S. states, according to Gay Cororaton, chief economist for the Miami Realtors.
“This wealth migration has been the primary factor driving up prices, with prices continuing to climb due to strong demand, even when mortgage rates started to hit over 5% in 2022 and as rates have remained elevated to over 6.5% to date,” Cororaton told Fortune.
So as wealth comes in, other income groups are getting pushed out. Now the people who staff the restaurants, hospitals, and classrooms are leaving, and the middle class is dissolving.
“What we’re seeing isn’t just a housing shift: It’s a reshaping of who can realistically afford to live in these markets,” Tara Benson, a Douglas Elliman real estate agent who works both in Florida and New York City, told Fortune. “When buyers coming in have significantly more purchasing power than local residents, it doesn’t just push prices up. It pushes entire income groups out.”
A $137 billion flood of wealth
Between 2019 and 2023, Florida absorbed a net $137 billion in income from other states, according to Miami Realtors’ analysis of IRS migration data. Over the same period, California lost $91 billion, and New York lost $76 billion. Many of those wealthy transplants chased a limited supply of Florida homes, ultimately driving up home prices—and making affordability more challenging for other income........