Florida's Population Dropping with its Home Prices

Posted by: Prashant Gopal on August 25, 2009

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Florida’s population, which has been rising year after year since the end of World War II, fell for the first time this year, according to the demographers at the University of Florida.

The population dropped by 58,294 from April 1, 2008 to April 1, 2009, according to UF’s Bureau of Economic and Business Research, which measures population using household electricity connections and disconnections and housing permit data. That might not seem like much for a state with a population of about 18 million. But it’s the first drop since 1946 and it follows a population boom. By comparison, the state’s population increased by 430,905 from 2005 to 2006 (By 2007-2008, the population rose by just 126,852).

Florida’s speculative building boom was driven by the idea the retiring baby boomers and new immigrants would create steady demand for the condos towers rising from Miami to Jacksonville. But many of the immigrants who helped build homes during the boom have likely left as the state’s economic promise diminished, said David Denslow Jr., a professor and Research Economist for the Bureau of Economic and Business Research.

And seniors, who have lost money in the stock market and have been unable to unload primary homes up north, have delayed purchasing their Florida retirement pads, he said. It’s also likely that many people cashed out before the end of the boom and moved to less expensive states such as North Carolina, South Carolina or Georgia, he said.

But Denslow is hopeful that the population will start growing again once the economy improves. The snowbirds are slowly coming back, said Denslow, who estimates that 3.5 million Americans will retire by 2020 (compared to about 2 million in 2000).

“We’re bottoming out,” he said. “The stock market is coming back. And to some extent, people are able to sell up north. There are some indications that the market is coming back. But I don’t see house prices rebounding sharply.”

Reader Comments

Meridian

August 25, 2009 7:06 PM

Wait a sec--U of F makes projections based on electrical connections and housing permits. But what if there is an increase in density of population (people get roommates, move in with their parents, etc.)? That seems to be quite likely, considering the current economic crisis.

siphandone

August 25, 2009 9:33 PM

Home prices should go down further so I can afford my 'snowbird' home.

Snoz

August 26, 2009 3:17 AM

As the leading instigator of the real estate fraud and bust, California is not far behind Florida's real estate calamity and population exodus. But for the steady influx of illegal immigrants from the south, California's population decline would exceed Florida's. While the prudent has long ago sold his real estate holding during the peak real estate mania before fleeing California, the oblivious fools remain entrenched trying to perpetuate the same real estate scam upon others. California is dying. It is dying because of all its excesses: labor unions, corrupt politicians, dishonest businesses, bloated state government. Unlike the rest of the Union, California has its own specialty of crooked real estate agents, mortgage brokers, and appraisers who directly caused the collapse of the biggest banks in the history of America: CountryWide, Wachovia, IndyMac, Washington Mutual, Downey Savings, and Pomona Savings. Under the guise of Socialism, the People's Republic of California has decayed into immorality even exceeding Sodom and Gomorra: illegal drugs, gang warfare, waves of crime, gambling halls, and sins of the flesh. While Florida's real estate and population may recover ultimately, California's recovery will occur only after the Almighty takes a chain saw and sever the God forsaken land from the rest of the Union.

Richard Michael Abraham

August 26, 2009 8:56 AM

South Florida will regain it's dominant stature within the next 3-4 years. One of the states hardest hit by the housing debacle, Florida offers a perfect way of life for retirees, and as prices of homes in Florida are getting closer to "affordability pricing", as the economy stabilizes, once again, Florida will be an attractive place to live for baby boomers. Given that the stock market fell from 14,000 to 6,500, and home values fell 30%-60% depending on the area of the country, the loss of 58,000 population is insignificant in contrast. The best years are ahead in Florida. In fact, during the next 6-9 months, Florida will offer the lowest home and condo price/value, and any retiree who can, should be planning now to bite the bullet up north, sell their large homes at whatever the market will bear, and make up for their losses by purchasing their dream retirement home in Florida.
Warmest,
Richard Michael Abraham
Founder, The REDI Foundation
www.redii.org info@redii.org

UnderOnePercent

August 27, 2009 2:13 AM

Even we are waiting for the down Price.It depends on the UnderOnePercent percentages when selling a Home.

Wes

August 28, 2009 12:43 PM

Richard - you make a very interesting comment but it should be taken into context with your real-estate background. Let me offer a competing view:

Florida real-estate will be constrained for decades. There is massive overbuilding in the state coupled with an out-of-control property insurance market and weak local wage growth. Retirees cannot be counted on to save the state, we need strong job growth and more development of economic institutions that are not so dependent on fickle travel tastes and preferences.

To achieve long-lasting prosperity in Florida, we need smart growth. This includes master planning of communities instead of plowing under swamps and pastures just to build more housing. We need to use natural resources more efficiently, planting more drought-resistant greenery and eliminate mandatory watering in communities. The state is already experiencing some water shortages which will only get worse in your scenario.

Economically, we need to reform the property market. The state will be wiped out in the event of a hurricane that forces Citizen's to draw down it's funding. We need property insurance and car insurance reform. We need development of higher paid manufacturing and high-tech jobs. We are seeing some of this (Scripps, etc), but more needs to be done. Tampa is a haven for low-wage call centers that often take the community grants then leave. We need to improve our high-school graduation rate, educational efficiency, and make sure those who want to attend higher education can afford it. Florida has some of the lowest university tuition costs in the nation, yet we're still seeing the best and the brightest students leave the state for better opportunities.

P.S. - I don't see a majority of boomers wanting to retire to a downtown Miami condo. I could go on about the need to reduce crime rates, but that starts with education and jobs. Also, if this global warming theory is true, it should warm up the northeast and midwest making it a more desirable place to live in retirement, thus taking away another Florida advantage (mild winters).

Robert Boyer

August 28, 2009 8:54 PM

I'm sorry, but I'm confused. How do housing permits tell you anything about population ingress / egress? Permitting is a speculative / educated guess on the part of developers.

Wes, great comments.

Snoz, go get some info on the GDP of California alone. It will probably surprise you. For a good conceptual view of what might be if CA were independent of the US, read Ecotopia. It is probably a good 30-yrs old, but still worth the read.

Tom

August 31, 2009 8:20 PM

It is so simple, but the people in power are useless, Make Florida a property tax free state, Raise sales tax to 12%, this will encourage property investors and snow birds to move back. How can anyone think of having a second home or retiring when property tax and insurance is out of control

Tammy

September 8, 2009 7:55 PM

I agree with Wes's comments posted on August 28th, 2009.

Florida's economy has been a week economy for young professionals and matters have just gotten worse with the recession. Property values have dropped to a point not much above what the values were 10+ years ago. The job market is primarily focused on tourism and caring for the elderly. The latest Trim notices show a decrease of approximately 15% from last year however we are expecting yet another increase in the homeowners wind insurance rates.

Tom, great concept! How do we get this to the legislators?

bill

September 24, 2009 10:18 PM

I left because crime is out of control,residents throw trash everywhere,and there seems to be a trend of prisons being built everywhere.Keep the humidity,and forthcoming hurricanes... the exodus has begun....

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About

BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.

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