Northern Home Prices Force Buyers to Migrate; Florida Welcomes New Owners

For many former residents of northern cities such as New York and Boston, it’s time for a Florida home loan. According to a recent report from the Census Bureau, the movement of buyers from the high-priced areas in the north to more reasonable southern sectors is as strong as ever.

“Many are surmising that housing values are so different around the country that it’s impacting migration,” says Marc Perry, a demographer with the Census Bureau. “Some people are cashing out housing and moving to cheaper areas. Others who don’t own homes are moving so they can afford to buy one.”

The main losers in this scenario? Metro areas such as New York, Los Angeles and Chicago. As for net gainers, the Sunshine State leads the pack. So much for a floundering Florida home loan market.

“Florida has been a sponge for migrants,” says Perry. It has attracted more residents than any other state, a net gain of 190,894 (a lot of them retiring or relocating New Yorkers), but Nevada had the highest average annual increase per thousand, 23.3.

Are Florida home loans peaking?

There is some evidence, however, that retirees may be starting to shy away from the storms and flood problems that Florida has endured the past few years, especially with real estate prices there going through the roof. Anecdotal evidence suggests that some retirees are moving to areas in Tennessee, Kentucky and western North Carolina that are considered safer, cheaper and less crowded.

“We call them halfbacks,” says Perry. “They move all the way down to Florida from the North and then move halfway back.”

Soaring prices in some Florida cities could slow or reverse the net migration there. Migration seems to be at least somewhat independent of economic conditions, though. In Massachusetts, for example, out-migration has occurred at more than a 50 percent higher rate the past few years than in the decade before, according to Perry. Yet the state suffered much more economic distress in the 1990s than it has in the 2000s.

Like virtually every other post-war trend, the attitudes and behaviors of baby boomers is crucial, because of the sheer size of the group.

“Like Californians,” says Perry, “anything they do resonates with the rest of the country. What they decide to do when they retire will have a huge impact on domestic migration.”

There is proof that prices are dropping in some cities. A Florida home loan is considered more affordable in these areas, ensuring that the state will remain a popular destination for those fleeing the north.