Investing

Pack Your Bags, the Florida Real Estate Boom Is Over

Austin Smith

Published: October 17, 2024 9:30 am

Last Updated: October 17, 2024 5:19 pm

Key Points:

• Florida’s real estate market is more and more dangerous due to typhoon and rising insurance costs.
• Common retiree spots like Florida and Phoenix face ecological problems.
• Secure, lower-tax areas like Tennessee are greater options for retirees.
• Whether it’s Florida, Arizona, or Tennessee, smart retirees begin planning early.
• Speak with 3 financial advisors, totally free to see whether you’re ahead, behind, or right on track. Get started here

Watch the Video

Edited Video Transcript:

[00:00:00] Doug Mcintyre: One of the things that I always track is, uh, what’s called the S& P K. Schiller index. It, to me, it’s the granddaddy of. All of the research, uh, on national real estate and real estate in the top 20 markets. So if you look at these markets over the last, since they started the index in the year 2000, the hot markets are basically the ones in California and Florida, Tampa, Miami.

[00:00:31] Doug Mcintyre: It used to be, you could go down to Tampa and say, I’m going to buy a house. And 10 years later, the price of it doubled and people were going down there because they liked the weather and they were going down there because of the tax situation. So I think that there’s going to be an interesting play in Florida real estate right now, particularly in these areas which have been hit very, very hard.

[00:00:57] Doug Mcintyre: You go into the market and people can’t give their houses away. So you’ve got to ask yourself, do you want to come in and get a house for next to nothing? And then now you’re out of the owner and you get wiped out by the next storm. So it’s a gamble, but it means that real estate in places like Tampa is going to go from being not just expensive, but rising very quickly to I can’t find anybody to buy my house or my house is gone.

[00:01:23] Doug Mcintyre: in the ocean, um, so you can buy my land. There’s a lesson here for people who are either just homeowners or people who buy real estate as an investment. And that is Florida is not, Florida is not the place, if you want the hot hand, going to Florida ain’t going to be the case. And I think up until a few weeks ago, you could, you could say, well, you know, it probably is.

[00:01:50] Lee Jackson: I couldn’t agree more. And having lived on the Gulf coast, either in New Orleans or Houston, For most of the last 15 years, uh, I can tell you that the storm and obviously we’re, we’re recording this prior to the storm hitting, which is supposed to be tomorrow. It’s going to make it, it’s going to be catastrophic.

[00:02:16] Lee Jackson: It’s going to be as bad or worse than Katrina because it’s going to go into the Bay of Tampa Bay. It’s going to have 15 foot, you know, surge Of you know of the water a water surge of 15 feet and it’s coming in at a cat At best it’ll be a cat 4 at best and there’s a good shot. It could come in as a cat 5 and the The run of real estate there is over it is over because people are going to see what happens And they’re going to go.

[00:02:50] Lee Jackson: Oh my god, and insurance prices are incredibly expensive and it may get to the point where you can’t insure a home there You know, for less than, oh, you

[00:02:58] Doug Mcintyre: can’t, there are a lot of places you either you can’t insure it or the insurance rates are tripling every year. So, I mean, I think the lesson for people is, look, Florida was a great place to move to for 50 years.

[00:03:12] Doug Mcintyre: I mean, you know, you go down, no taxes, it’s warm. You get to leave places like Wisconsin and Michigan. Yeah. Go to someplace like that. migration to florida is

[00:03:25] Lee Jackson: o

[00:03:27] Doug Mcintyre: prices there. I’m predict around Tampa are going to collapse. They’re going t

[00:03:35] Lee Jackson: And the thing is, knowing I think you’re aware, you family lost everything in she lived in was called S a, you know, a small subu You know, 000 people of New Orleans.

[00:03:53] Lee Jackson: Every building was underwater, everything. And it took years and the whole, you know, people left. And so what’s the people that moved in were not the kind of hardworking, good blue collar, you know, people that worked at plants that were on the Mississippi there, you know, it’s a lot of the unsavory kind of characters that you wouldn’t want to be your neighbors.

[00:04:17] Lee Jackson: And I think you’re right. I think Florida real estate. Boom is over and probably over for yeah,

[00:04:24] Doug Mcintyre: well, I think there’s some advice here, though, particularly for people who are either About to retire or, you know, they’ve retired and they’re, they’ve got a home, they’re thinking of going someplace. The places that people always picked, don’t go there.

[00:04:41] Doug Mcintyre: Okay? Don’t go to Phoenix because pretty soon it’s gonna be 120 degrees, you know, 10 days out of the year it’s gonna be 110, 50 days outta the year. Places like Phoenix are not going to be livable anymore. But if you’re retired and you’re not 28 years old, it’s even worse.

[00:05:02] Lee Jackson: Miami and Tampa Well, having lived in Phoenix for eight years, you know, at least Phoenix has, um, they don’t have the concerns that you have.

[00:05:11] Lee Jackson: Of tropical and hurricane storms, you know, I mean, it is hot, but you know, they have this thing that’s running low on water every time. Yeah, but it is running low on water.

[00:05:23] Doug Mcintyre: It’s difficult. Yeah, it’s hot running low on water. Everybody who wanted to retire, the first place they’d look is Phoenix and Florida.

[00:05:34] Doug Mcintyre: So if you’re thinking of moving those places, our first piece of advice is don’t go. The other thing is you can go and you can find out that almost everybody else is leaving in the turnstile. Get in the turnstile, you come in. If you’re thinking of buying a house down there and hoping that 10 years later, it’s going to be worth 30 percent more, you know, ain’t going to happen.

[00:05:59] Doug Mcintyre: So for all, all of you retirees.

[00:06:02] Lee Jackson: Yeah. Yeah. And again, I think in more and more the real estate shift, because people are going to continue to flee, flee the big blue tax. You know, burden, yes, they’re gonna continue there, but now they’re looking at like places where I live in, in Tupelo, Mississippi. They’re looking at, you know, Chattanooga, they’re looking at smaller towns that don’t have the exposure to the Gulf.

[00:06:28] Lee Jackson: You know, they don’t have that concern. And again, if you want to go to Arizona, go to Tucson, even though it’s about an hour farther south, it’s actually a touch higher in elevation and a little bit cooler, you know, and that’s relative 108 versus 110. But, um, you’re exactly right. And, and Phoenix has expanded so much in the last 50 years, and it’s almost connected to Tucson, where it used to be, you’re not even remotely connected to it, but it’s getting close.

[00:06:59] Doug Mcintyre: So anyway, our advice here is, is that you’ll keep seeing these articles in the media about the best places to live. Yep. Florida will probably continue to be there. These cities, Phoenix. What we want you to do is we want you to look away from the screen. And make another decision. Okay?

[00:07:16] Lee Jackson: Yeah. Look at areas that are in Tennessee, and again, the you, when you consider areas that are somewhat safe every place, nobody in their right mind, ever thought Asheville, North Carolina would be destroyed.

[00:07:31] Lee Jackson: And, and we were just there last summer. Oh my god. It was beautiful. The place we stayed was called Black Mountain and out half of that little town is gone. It’s just absolutely gone. So you’re gonna really do your homework because. Um, I

[00:07:45] Doug Mcintyre: gotta tell you, I’m from Detroit, and I think from a climate standpoint, it’s the safest place in the entire universe, and there are a lot of, there are a lot of open houses there.

[00:07:54] Doug Mcintyre: You can buy a house for 1, 000. So, yeah, yeah, go to Detroit, buy a 1, 000 house, fix it up. And there are no hurricanes in Detroit. Uh, this is serious. You people who are about to retire, you’ve got to rethink where you’re going to go. That’s that’s the takeaway is think

[00:08:17] Lee Jackson: about it. I’ll do some work on this because, and we’ll, let’s find five cities or so.

[00:08:22] Lee Jackson: That would, would be a good idea. You know that, that are, you know, not, not in a heavily tax state. Let’s that are a little bit warmer because we both know, you know, Michigan, I was just up there and it was beautiful, but it was early September and um, you know, from January 2nd, alright, we’ll do this. We’re gonna do a list dark, you know, so we’ll, we’ll come back real soon and we’ll have five or seven cities that are a good alternative

[00:08:49] Doug Mcintyre: for retirees.

[00:08:50] Doug Mcintyre: We’re gonna have cities the best. And we’re going to tell people why. Right, exactly.