But so is its inflation rate
Florida takes the top spot in one report with the best economy in the country, while becoming the nation’s inflation hot spot in another report, and it has to do with housing. A third report shows Florida has 9 of the top 15 most overvalued housing markets in the US. It’s all in our look at economic news in the Sunshine State this week.
The Best Economy: CNBC produced an interesting piece recently titled “These 10 states are running America’s best economies for residents.” While some state economies are faltering and at risk if there’s a recession, Florida’s isn’t one of them. With 340 out of 360 points, Florida has taken the top spot, with the best economy in the nation (ahead of #2 Texas and #3 North Carolina).
“The Sunshine State’s economy is white hot,” states the report. “Overall growth is among the strongest in the nation, with the job market to match as workers flood into the state. Florida’s housing market, which is notoriously prone to booms and busts, is well-balanced for the time being. Price appreciation is the fastest in the nation at around 15%, while construction activity is strong, and foreclosures are minimal. There are some clouds on the horizon: affordability is becoming an issue, and the insurance market is dicey. But for now, the future looks bright in the state with America’s top economy.”
Florida GDP growth in 2022 was 4% and job growth was 4.9%. The Report is part of CNBC’s annual competitiveness study, America’s Top States for Business (of which Florida ranked 8th this year and North Carolina #1).
The Highest Inflation (for Now): With all the popularity Florida is enjoying it’s also become the fastest-growing state. Our population grew from 21.5 million people in April 2020 to 22.2 million people in July 2022. That’s a lot of new consumer demand. And so it’s no surprise that Florida has become the nation’s inflation hot spot. While nationally inflation has greatly leveled off (the Consumer Price Index rose 0.2% in June after a 0.1% increase in May and over the last 12-months grew 3%) inflation for Florida’s largest cities haven’t.
The greatest increase in inflation over the past 12 months was in the Miami, Fort Lauderdale, and West Palm Beach area, which has seen an overall CPI increase of 7.9%, while housing in these areas has risen 5.7%. The Tampa/St. Petersburg area saw the overall CPI up 7.3% and housing up 3.4%. According to the National Bureau of Labor Statistics, its index for shelter costs rose nearly 7.8% and accounted for 70% of the overall CPI increase.
Overvalued Real Estate: So it’s rising housing costs that are leading the growing cost of living in the Sunshine State. According to the Florida Realtors, the average cost of a home in Florida in April was $410,000, compared to the nationwide median of $388,800. Florida remains the state with the most overvalued housing markets in the nation, according to a new study from Florida Atlantic University (FAU) and Florida International University (FIU). It shows that Florida has 9 of the top 15 most overvalued housing markets in the U.S. They are:
- Tampa (43.09%)
- North Port (42.59%)
- Cape Coral (42.18%)
- Lakeland (41.20%)
- Palm Bay (40.37%)
- Jacksonville (39.29%)
- Miami (38.73%)
- Orlando (38.66%)
- Deltona (38.54%)
Researchers said prices could take a few years to return to where they should be due to the ongoing high demand.
LMA Newsletter of 7-24-23
