The strong recovery continues
The Florida economy is growing as hot as our summer heat, with monthly revenues topping expectations for the 10th month in a row, a strong housing market with the highest prices in 15 years, and a record number of business openings in the Sunshine State, leading the nation!
The state’s general revenue collections for May came in at $3.6 billion, beating the forecast by nearly $574 million (19%). Almost 72% of the gain came from six sales tax categories, including tourism. Tourism taxes beat the May forecast by 21% as more visitors return to Florida, a trend that started when the state re-opened for business from the pandemic last summer.
Part of the revenue growth is credited to people receiving April federal stimulus checks. That money is also cited as one big reason for another piece of good news: people starting their own businesses. According to the U.S. Census, new business applications in Florida totaled almost 500,000 last year, up 26.8%, the most in the nation (California was second and Texas was third). Miami Today reports that Miami-Dade County’s 106,810 new business applications were by far the most in Florida in 2020, nearly 25% above the 2019 level, which was the record at that time for Miami, a community that has historically been a leader in business creation.
The pandemic is also behind the big demand for housing here in Florida and across most of the country. And that demand is causing prices to soar. The S&P CoreLogic Case-Shiller 20-city home price index rose nearly 15% in April from the previous year. Nearly half of homes sold in May were selling for above their asking price, according to realty company Redfin.
Since the pandemic, more Americans have sought more living space, trending for larger suburban homes rather than apartments or smaller homes in the city. With the popularity of remote work created by the pandemic, others realize they could move to another state, such as Florida, and still keep their current job. Historically-low mortgage rates have certainly helped build demand. Yet prices have now grown to the point that would-be buyers are being priced out of the market, slowing home sales.
“The forces that have propelled home price growth to new highs over the past year remain in place and are offering little evidence of abating,” said Matthew Speakman, an economist at real estate data provider Zillow.
LMA Newsletter of 7-12-21
