What caused skyrocketing housing costs in South Florida?

WEST PALM BEACH, Fla. — Spiking interest rates, inflation and housing costs have become impossible to ignore when trying to make ends meet in South Florida.

There are a lot of layers to the problem, and no concrete solution.

Close to a thousand of people are moving to Florida every day.

That’s a 15% population increase across the state over the last 10 years, according to the most recent census data.

RELATED: Snowbirds buying up properties in South Florida

It’s a number that Pete Carter has witnessed as the owner of SnowBirds Home Watch. The company maintains and cares for homes while part-time residents are out-of-town.

He said since COVID-19 began, his business hasn’t stopped growing.

WPTV

Pete Carter, owner of SnowBirds Home Watch, explains how his company has grown since the pandemic.

“Once travel restrictions stopped, we lost a few homes because they would rather isolate in paradise. I mean, why not?” Carter told WPTV. “But the past couple of years, I think, it’s grown pretty exponentially.”

Snowbirds come with a lot of spending power, money that keeps local economies churning. 

RELATED: New York City companies continue to relocate to Palm Beach County

“A few of them said their house up north, because of where they were located, had got such a high price that they just sold it,” Carter said. “They said it was time, and they figured they’d make this their home.”

Experts like Sofia Johan, an associate professor of finance at Florida Atlantic University, said snowbirds are only one part of the problem.

“It’s not just the snowbirds that are moving here,” Johan said. “There are many educated people who are following the jobs. And the jobs are created because we’re not only creating an educated workforce but an educated workforce that’s dedicated to living here because they love the lifestyle, the low taxes, the friendliness of businesses, the diversity of industry.”

Sofia Johan, associate professor of finance at Florida Atlantic University

WPTV

Sofia Johan says a variety of residents, not just snowbirds, have moved to South Florida permanently.

Larger companies like hedge fund Elliott Management, Goldman Sachs and Virtu Financial are finding fertile ground for relocation in Florida.

“More importantly, the outside investors are now investing in the real estate here unlike before institutional investors,” Johan said.

Those highly-skilled jobs are attracting high-wage earners who are contributing to increased housing demands and pricing. But they’re coming to Florida with pockets that can more than foot the bill.

“It makes you worry,” Carter said. “It definitely makes you worry.”

Johan added that now is the time to start relying on your emergency savings as we ride out this storm.

“Remember how we were taught to save for a rainy day?” Johan asked. “This is it. This is the rainy day.”

It may seem out of reach, but many people are hoping not impossible.

“It would be interesting to see whether the wages are increasing in line with the higher payments to be made,” Johan said. “When we talk about interest rates, remember it’s car payments, it’s credit card payments, it’s systemic. Everybody’s talking about the house prices but let’s not forget your credit card rates will go up, your car loan rates will go up. It’s going to continue to be painful.”

In the meantime, demand is far outpacing supply, driving up the pressure on your pocket in more ways than one.

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