South Florida Middle Class Pushed To Brink

The southern portion of the Sunshine State has been a hugely desirable destination for as long as can be remembered, with idyllic weather and relatively affordable living. But recently, escalating South Florida real estate and other basic costs are pushing a large portion of the area’s middle class to the brink, reports the Sun-Sentinel. At the U-Haul Center on State Road 84 near Interstate 95 in Fort Lauderdale (above), Belkis Lopez has noticed a surprising, but telling shift in the past year — more trucks leaving town than arriving.

“A lot of people are getting out of here,” she said. “Working people who say they can’t afford living here, people who’ve been here 50 years, retirees who say their money can go a lot further up north.”

The list of one-way rental destinations for the past week included Ohio, Las Vegas, and two in North Florida. Some are moving to places closer by, such as Fort Pierce and Port St. Lucie, while many have been going up north to Tallahassee or to Pensacola in the state’s panhandle. Other residents relocate to Georgia, North Carolina and beyond. The exodus is similar to what is happening in the hottest housing markets across the U.S.

“I hear the same complaints [about South Florida] all the time,” said Lopez, 23, who has worked at the U-Haul Center for two years. “Too expensive, too crowded, too much traffic.”

Not too long ago, South Florida and its great weather and reasonably affordable lifestyle made it seem like a paradise compared with other major metropolitan areas. But now that paradise has been lost, with nasty hurricane seasons, an incredible real estate market that only the elite can afford, and the cost of everything from health care to FPL bills soaring (while salaries do not keep pace).

Hurricane Wilma may have been the straw that broke the camel’s back for many ordinary people, whose thoughts have inevitably drifted to leaving.

“I’m seriously thinking about getting out of the area,” said 57-year old Linda Mastriana a few days after Wilma. “The cost of living is just getting out of hand, and the wages are simply not keeping up.”

She has lived and worked in Fort Lauderdale for 28 years, but she said the coming increase in windstorm insurance (as well as other hazard insurance) rates might be the breaking point. Ohio, her native state, keeps looking better in spite of its harsh winters. While South Florida has always been a transient area of sorts, it’s also longtime residents who are packing it in (and packing up their belongings) nowadays.

Martha Norona, whose family moved to South Florida from Massachusetts in 1957 when she was 4, sold her house in Dania Beach and moved to Tallahassee in August, one week before Hurricane Katrina touched down. The 52-year old moved to be closer to her two grandchildren and daughter, who works at Florida State University, but also for a less hectic lifestyle.

“I knew things were expensive [in South Florida], but I didn’t realize how expensive until I got here,” she said. “I only need one insurance policy for my home now. It’s wonderful.”

• In South Florida, Norona paid upwards of $2,000 a year for homeowner’s insurance, windstorm and flood insurance, on top of another $2,000 in property taxes and $159 a month for car insurance.
• In Tallahassee, she pays $800 a year to insure her property, $1,200 in property tax and $88 a month for insuring her car.
• Not to mention the savings in cost of housing alone. While North Florida real estate has boomed in its own right, it pales in comparison. Norona’s S. Florida house, a small two-bedroom, sold for $325,000. In Tallahassee, she bought a three-bedroom, two-bath home with a fireplace, wooden deck and two-car garage for $180,000.

“I paid off everything I owed, put money in the bank, bought a beautiful house and can afford to work part-time. I don’t regret it for a minute. I miss my friends and my family, but to me it’s like heaven up here. … Everyone’s in a good mood. Even the stock boys at Wal-Mart say hello to you. People don’t cut you off in traffic. If you put your blinker on, they actually let you in,” she said.

Industry analysts, government planners and private builders all forecast unbridled growth for Broward Country in the coming year, with no shortage of high-end developments and high-rise condominiums on the drawing boards. One can only wonder, though, who’ll be able to afford it?

The big question for the new year and beyond is whether South Florida home loan rates will cool the market to the point where the middle class can stand the heat, or whether more people will continue to cash out, pack up and depart this “lost paradise.”