photo by Boyd Loving
the staff of the Ridgewood blog
Ridgewood NJ, two surveys from home listing provider Redfin, found that of their more than 1 million users, 27% searched for homes outside densely populated urban areas between April and May of 2020, the highest since they had begun recording migration data. This shift is being driven by several ongoing factors, the most recent being the pandemic, which eliminated many benefits of working in a global financial hub.(1) Additionally, 50% of Redfin’s users living in New York, Seattle, Boston, and San Francisco would be willing to relocate if they had the option of working from home permanently.(2) Especially attractive is Florida for its warmer weather, greater array of outdoor activities such as golf, and the lower taxes.(3) With the sudden surge in demand for these properties, even buyers who are acting quickly are getting into bidding wars.
“Homebuyers in highly urbanized areas and major metropolises have been increasingly interested in buying more spacious properties in milder climates,” said Regina Sotomayor, Chief Organizational Officer at Valor Capital. “COVID-19 was perhaps the final impetus many of them needed to finally make the move.”
Enter Serena by the Sea, Valor Capital’s Newest Luxury Development
As the lower tax rates are a huge boon for those in the luxury market looking to relocate—and as the concerns over COVID-19 in areas of higher population densities have started to lose some of their allure because of safety concerns, Valor Capital is announcing their newest $70 million project, Serena by the Sea. The 80-unit boutique property overlooks the Gulf of Mexico and is located just minutes away from downtown Dunedin, a city on Florida’s Gulf Coast.
Florida’s Tax Incentives:
No state income tax
No estate tax
Asset protection benefits
Homestead exemption for the first $50,000 of your home value
3% cap on annual assessments
6% state sales tax. Exceptions: Amusement machine receipts, 4%; lease or license of commercial real estate, 5.5%; electricity, 6.95%.
Dunedin is home to several beaches consistently rated among the best beaches in the world—such as the Dunedin Causeway, Honeymoon Island, and Caladesi Island State Park.(4) Dunedin is one of the few open waterfront communities from Sarasota to Cedar Key where buildings do not completely obscure the view of the Intracoastal Waterway and the Gulf of Mexico beyond.(5)
North American Moving Services’ 2020 Migration Report included New York and New Jersey among the top five states for outbound moves, whereas Florida, Texas, and Colorado ranked among the top eight states for inbound moves. Most telling of the national trend lies with the Northeast—four states out of seven in that region have the highest outbound migration, and none of them rank among the top eight for incoming population.(7) In keeping with these recent trends, Florida’s many living advantages has made the state especially desirable for the Wall Street set and the affluent.
Florida’s year-round warm climate, plethora of outdoor activity options, as well as its tax advantages are prompting the well-heeled to seek properties around the Miami, Fort Lauderdale, Palm Beach, and Tampa Bay-Clearwater areas.
That tax advantage over New York and New Jersey only increased after an overhaul in 2017 capped its state and local taxes at $10,000.(8)
The exodus looks to have already started. Moves from New York and New Jersey to Florida rose 4%. Furthermore, Florida was a top destination for New York City residents, rising 10% year over year as of September 2020.(9)
Similarly, tax rates in Massachusetts have been driving flight from the state. Now that working remotely has been gaining widespread acceptance, that trend is likely to accelerate. The state has already seen a net loss of $20 billion to states including Florida, where there is no state income tax.(10)
A recent real estate market report also showed wealthy buyers turning away from large metropolitan areas and toward suburban lifestyle living continued through to the end of last year. Notably, suburban centers saw the largest amount of growth where amenities such as square footage, safety, and outdoor greenery are in much greater abundance.(9)
“Even Wall Street has noted that their employees aren’t looking forward to returning to their old Manhattan offices and prefer working remotely,” Sotomayor notes. “The draw of warm weather, swimming pools, and spacious homes—and the fact that much of their clientele is already living nearby provides the perfect mix of incentives for stockbrokers, bankers, and portfolio managers to make Florida their new home state. The market here is just poised to explode.”
Do they segregate between primary residences and vacation homes?
A lot of notheasterners are looking for a 2nd (or 3rd or 4th) house out of state.
What many of my friends have done is purchase a home in FLA, that USED to be a second home.
However, due to the tax policies of NJ and the advice of their accountants. they have been spending 181 days per year ‘in exile’ out of NJ.
They have become residents of FLA in order to escape the claws of the hungry NJ tax monster.
Fortunately they still maintain a home in Ridgewood, which subsidizes all of the families who use the schools.
During that 181 day exile, they are depriving NJ of sales tax revenues on the goods and services that they would purchase if they had been staying here.
I have seen most of them eventually dump their homes in NJ due to the increasing property tax burden after spending 2/3 winters in florida
Only the morons in Trenton could figure out a way to chase out those with $$$ who subsidize the remaining residents.
Another HUGE reason for people to leave who never had children…. the estate tax only exempts when your money goes to a child or spouse. So the state grabs a share of ANY money bequeathed by a single descendent… wake up and GTFO before they pick your pocket when your in a casket.