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  • Flying South Forever: $39 Billion Comes to Florida, And Stays

Flying South Forever: $39 Billion Comes to Florida, And Stays

'A sponge-like state that absorbs people and income,' analyst says

Newcomers to Miami-Dade County between 2020 and 2021 brought an additional $6.4 billion in taxable income to the area.

It’s like a housewarming gift – in reverse.

In Palm Beach County, new residents increased the area’s federally taxable income by $7.03 billion, while Broward’s migrants brought $1.02 billion that year.

The figures come from a new analysis of tax data by the nonpartisan Economic Innovation Group, which studied how migration during the pandemic era changed the economic realities of places people moved to—and from.

The think tank looked at IRS data from 2021, the most recent available, which tracks when taxpayers file from a different state than in the previous year. The resulting analysis shows an unprecedented migration of high-income earners out of America’s largest cities, and puts a dollar figure to their mobility.

💰 Florida, by far, was the largest recipient of new wealth among all 50 states.

Migration to Florida increased the state’s taxable income by $39.3 billion in 2021, after subtracting the incomes of those who left, according to EIG state rankings. Texas came in second, with $10.99 billion. While 2022 tax filings data are not yet available, the continued migration to Florida does not suggest a retrenchment.

“Florida has been this sponge-like state for a while that absorbs people, income and wealth like few other places,” said Connor O’Brien, research and policy associate at Economic Innovation Group, who conducted the study. “But he pandemic really turned up the rate.”

Real estate developers have already taken notice of the wealth migration, as most of Manhattan’s ultra-luxury builders are scrambling to assemble sites, file plans and cater to a presumed new source of luxury demand in Florida—as I documented in last week’s newsletter.  The influx has also sent home prices and rents soaring across the state, adding affordability concerns to policymakers’ must-tackle list.

🍸🍹 Cocktail Party Stats:

In nearly every Florida county, the average income of residents who moved in between 2020 and 2021, exceeded the average income of those who left, according to EIG.

Here’s how it looks for Florida’s southeastern counties:

🌴Palm Beach:

  • Average income of newcomers: $242.2K

  • Average income of leavers: $96.3K

  • Difference: $145.9K


  • Average income of newcomers: $228.5K

  • Average of income of leavers: $66.5K

  • Difference: $162K


  • Average income of newcomers: $100.5K

  • Average income of leavers: $73.3K

  • Difference: $27.2 K

☀️Newcomers expanded Miami-Dade’s tax base by 12.5% in 2021, EIG said. The Palm Beach tax base grew by 17.5% that year.

☀️Florida’s urban areas bucked the U.S. trend in which cities are losing sizable chunks of their taxable income. Miami, for example, had 14,170 fewer tax filers in 2021 than it did the prior year. But the income on those fewer returns was $6.4 billion greater.

🏙️Manhattan alone lost more than $16 billion in federally-taxable income (and 37,000 tax returns) through outward migration between 2020 and 2021. That loss amounts to more than 13 percent of remaining residents’ combined taxable incomes, EIG said in its report.

🏙️Migration out of San Francisco shrunk that city’s federal income tax base by more than $8 billion—or 20 percent—in that same period. Los Angeles lost $8.8 billion, or 3.7% of its tax base, and Boston dropped by $2.5 billion, or 11%.

💡“These last few years have woken people up to the question of how fast people can move, and how fast money can move,” O’Brien said in an interview. “It’s a reminder for big cities not to be indifferent to questions of quality of life.

“People can pack up and leave and, in our new remote work world, it’s a lot easier for them to do that,” he said.

Developer Interview:

Kevin Maloney, Chief Executive Officer,
Property Markets Group 

The frenzy to acquire a new condo in Miami has slackened – and that’s a good thing, says Kevin Maloney, whose firm has five condo projects in sales or development in the city, plus at least another two upcoming.

``In some of our half-million to $2 million product, we were doing 40-to-100 sales a month in each project, and we’ve slowed down to about half that amount,” he said. “But it’s still strong, and we’ve actually pushed pricing because that absorption was, frankly, too much. It was too high.”

Property Markets Group, in a venture with E11even Partners, sold out their first E11even-branded condo tower in Miami within three months in 2021. That’s 449 units in a 65-story condo-hotel that owners can rent out for short-term stays.

E11even Residences Photo: ARX Solutions

Their second tower in the series, E11even Residences Beyond (connected to the first with a skybridge), sold 90 percent of its units within six months last year. Then they expanded the number of apartments by acquiring a neighboring site. The project — with a rooftop helipad, a private social lounge, and where prices start at $700k — now has 558 units, with buyer commitments on 85% of them.

A slower sales pace can benefit most developments these days, as some Miami builders who sold too quickly in 2021 are finding the costs of construction have exceeded what they collected in sales, Maloney said.

“You always want to coordinate your last sales with the beginning of your construction,” Maloney said. “You don’t want a huge gap – that’s a dangerous game.”

“You don’t want to sell out and find out that you can’t build it for what you sold it for,’’ he said. “A lot of people are at a place where, after their sales program is finished, they can’t get out of the ground.”

Skybridge at E11even Residences. Photo: ARX Solutions

Maloney’s Property Markets Group has started construction on the first pair of E11even towers. The third, West Eleventh Residences, will break ground in about eight months, he said.

Maloney is using that time to push pricing at that 659-unit tower to a building average of $1,400 per foot — the highest of all three E11even projects. At another of the firm’s planned Miami projects, the Waldorf Astoria Hotel & Residences, PMG is aiming to sell units at a building average of $1,800 per foot. So far, $850 million worth of units have found takers out of a building sellout value of $1.15 billion, he said.

“If you believe the market’s still growing and strong in its price point,” he said, “You’re going to continue to raise prices.”

Heliport atop E11even Residences Beyond. Photo: ARX Solutions

What’s Next:

EXPLORING THE SPACE COAST: Property Markets Group is working to rezone a 32-acre shopping center it purchased two years ago in Melbourne, Florida. The developer hopes to build about 1,000 rental units, a portion of which will be designated as affordable, under Florida’s newly-approved Live Local Act.

``It has great job growth,” Maloney said of his interest in the area. “You have a lot of engineering jobs up there.”

MORE SOUTH FLORIDA CONDOS: PMG could begin sales as early as next month on a planned waterfront condo project in Fort Lauderdale. It’s also planning a condo tower on a site it owns between the Waldorf and another of its completed projects, The Elser.

“We have a few more in the pipeline,” Maloney said.

📊 Chart of the Week: The Illusion of more luxury inventory

That uptick in luxury listings is just a handful of new homes for sale

Source: Miller Samuel Inc./Douglas Elliman Real Estate

Home listings are still plunging in South Florida – as they are across the U.S.

South Florida shoppers browsing properties at $5 million or higher appear to have a few more choices. Though, really, only a few.

In Palm Beach County, listings priced at $10 million or greater climbed 9.1% in last month from a year earlier, according to data by appraiser Miller Samuel and Douglas Elliman Real Estate. In real numbers, though, that’s 12 such homes on the market – or just one more than a year ago.

In Miami-Dade, single-family homes listed between $5 million and $9.9 million saw a 35% increase—to 27. In Broward County, listings for homes priced at $10 million or more were up 66.7% in July from a year earlier. That translates to five such homes for sale, compared to three a year earlier.

Single-family listings in every other price category declined year-over-year. By a lot.

Links I Read This Week:

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