Florida Tax Revenue Tops Projection

 The state’s general revenue collections in Aug. totaled $3.6 billion, 4.3% higher than expected, thanks to a boost from sales taxes and earnings on investments.

TALLAHASSEE, Fla. – State general-revenue collections in August were 4.3% higher than projected, according to state officials. With a boost from sales taxes and earnings on investments, Florida had net general revenue during the month of $3.639 billion, $149.5 million more than anticipated when a panel of economists revised projections on Aug. 14.

A report posted online Tuesday by the Legislature’s Office of Economic & Demographic Research showed sales taxes accounted for $2.892 billion of the August revenue, $60 million higher than expected.

Earnings on investments totaled $169.9 million, which was $84 million more than anticipated.

General revenue is closely watched because it plays a major role in funding education, health and prison programs. The economists meet periodically during the year to update projections, which are used by lawmakers in negotiating an annual state budget.

© 2024 The News Service of Florida. All rights reserved.

Florida Consumer Sentiment Continues to Climb

 Increasing optimism is largely driven by positive views on the national economy over the next year. Consumer sentiment should improve overall in the months ahead.

GAINESVILLE, Fla. – Consumer sentiment among Floridians rose for the fourth consecutive month in September to 78.3 points, up 1.6 points from a revised figure of 76.7 in August. At the same time, national consumer sentiment also rose over 2 points for the second straight month.

Floridians' increasing optimism in September is primarily driven by their positive views on the nation's economy over the next year, reflecting the current economic trends. Although overall price levels won't return to where they were a couple of years ago, annual inflation continued to decline, with the Consumer Price Index (CPI) falling to 2.5% and the Personal Consumption Expenditure (PCE) Price Index – the Fed's preferred measure – dropping to 2.2% in August.

Moreover, while the labor market has cooled, it remains stable, with the U.S. unemployment rate slightly declining to 4.2% and Florida's rate holding at 3.3% in August, both at historically low levels. Considering the progress on inflation, the Federal Reserve announced a 0.5 percentage point cut in interest rates in mid-September, which will ripple through the economy, reducing borrowing costs for consumers and businesses.

“The decrease in interest rates should boost discretionary spending, encourage business expansion through increased investment and hiring, and further enhance confidence among Floridians,”  said Hector Sandoval, director of the Economic Analysis Program at UF's Bureau of Economic and Business Research.

Among the five components that make up the index, four increased and one decreased.

Floridians' opinions about current economic conditions were mixed. Opinions of personal financial situations now compared with a year ago decreased 1 point from 59.5 to 58.5. However, these views varied across sociodemographic groups with men and people with an annual income under $50,000 expressing more favorable views. In contrast, opinions as to whether now is a good time to buy a major household item like an appliance rose 1.3 points from 59.6 to 60.9. Again, opinions were divided, but in this case, people 60 and older, as well as people with annual income over $50,000, reported negative views.

The three components related to Floridians' anticipation about future economic conditions were positive. Expectations of personal finances a year from now increased 1.1 points from 92.6 to 93.7. Outlooks for U.S. economic conditions over the next year saw the largest increase this month, rising 4.4 points from 83.7 to 88.1. These expectations of the national economy are at their highest level in four years. Similarly, expectations of U.S. economic conditions over the next five years rose 2.1 points from 88.3 to 90.4. Despite this growing optimism, these positive trends varied by demographics. Men reported pessimistic views across all three components, while people 60 and older, as well as people with an annual income over $50,000, also expressed negative views regarding their future personal financial situation.

Hurricane Helene made landfall as a Category 4 storm in the Big Bend region on September 27, causing significant property damage and economic losses. “While the full impact on the state's economy is still being assessed, it is unlikely to have lasting effects on Florida's overall economy. However, it will affect consumer confidence among Floridians, though such impacts are typically short-lived,” said Sandoval.

“Looking ahead, we anticipate that consumer confidence will be impacted by the effects of Hurricane Helene in the coming month, likely leading to a decline among Floridians. However, as interest rate cuts begin to ripple through the economy and further reductions are announced later this year, we expect consumer sentiment to improve overall in the months ahead,” Sandoval added.

Conducted August 1 to September 29, the UF study reflects the responses of 254 individuals who were reached on cellphones and 296 individuals reached through an online panel, a total of 550 individuals, representing a demographic cross section of Florida. The index used by UF researchers is benchmarked to 1966, which means a value of 100 represents the same level of confidence for that year. The lowest index possible is a 2, the highest is 150.

Source: University of Florida

© 2024 Florida Realtors®

U.S. Annual Home Price Growth Inches up in August

 Year over year, U.S. single-family home prices rose to 3.9% in August, the lowest rate of growth recorded since last July.

IRVINE, Calif. – Home price growth moved up to nearly 4% year over year in August, though gains are projected to fall to less than 1% by next spring, according to the CoreLogic Home Price Index (HPI) and HPI Forecast for August 2024.

Mortgage rates dropped to the lowest level in nearly two years the last week of September, according to Freddie Mac, but weakening consumer confidence over the job market and uncertainty around the November election could be keeping price growth expectations muted.

“While mortgage rates have dropped in recent weeks, August home sales were by still-high rates in July and August, which lowered affordability,” said Dr. Selma Hepp, Chief Economist for CoreLogic.

“The combined impact of high prices and high mortgage rates kept a lid on price growth, with annual gains falling to the lowest level in a year and the monthly gain falling well below what is typically observed in August. Price gains in August were driven by areas in the Northeast but brought down by softening markets in Texas and Florida.“

Top takeaways:

• U.S. single-family home prices (including distressed sales) increased by 3.9% year over year in August 2024 compared with August 2023. On a month-over-month basis, home prices decreased by 1% compared with July 2024.
• In August, the annual appreciation of detached properties (4.2%) was 4 percentage points higher than that of attached properties (-0.2%).
• CoreLogic’s forecast shows annual U.S. home price gains relaxing to 2.3% in August 2025.
• Miami posted the highest year-over-year home price increase of the country’s 10 highlighted metro areas in August, at 8.9%. Chicago saw the next-highest gain at 6.8%.
• Among states, South Dakota ranked first for annual appreciation in August (up by 10%), followed by New Jersey (up by 9.5%). Hawaii was the only state to record a year-over-year home price loss (-0.1).

Source: CoreLogic

© 2024 Florida Realtors®

Citizens Insurance Policies Could Go Below 900,000

 State regulators have approved as many as 649,000 policies for private insurers in October and November, another sign Florida’s insurance market is recovering.

TALLAHASSEE – Expecting a surge of policies going to private insurers, the state’s Citizens Property Insurance Corp. could have fewer than 900,000 policies at the end of the year. Citizens President and CEO Tim Cerio said Wednesday the policy count is projected to total 891,184 at the end of the year.

In the past, Cerio said the policy count was expected to dip below 1 million. Citizens had 1,257,924 policies as of Friday, but the projected decrease is tied to what is known as a “depopulation” program that shifts policies to private insurers.

State regulators have approved proposals by private insurers to take as many as 649,000 policies from Citizens in October and November, according to information presented Wednesday to the Citizens Board of Governors. The actual number of policies moving to private insurers likely will be lower than the maximum.

Citizens typically adds thousands of policies a week, but Cerio said increases in new policies have been lower than expected. Citizens was created as an insurer of last resort, but it has become the state’s largest insurer in recent years amid financial problems in the private market. Cerio said, however, the insurance market is recovering, resulting in private carriers taking policies.

©2024 The News Service of Florida. All rights reserved

Redfin: First improvement in affordability since 2020

 Housing affordability is improving for the first time in four years, an economist said. Buy now because it’s unlikely to become markedly cheaper in the near future.

WASHINGTON – The income needed to afford a home fell because mortgage rates posted their first annual decline in three years. The average interest rate on a 30-year mortgage dropped to 6.5% in August from 7.07% a year earlier, and has since fallen further, now sitting at 6.09%.

This is based on a Redfin analysis of the estimated median U.S. household income and median monthly housing payments as of August 2024. References to the “median-priced” home in August refer to the median sale price of homes that were purchased during the month. We consider a home affordable if a buyer taking out a mortgage spends no more than 30% of their income on their monthly housing payment.

“Housing affordability is improving for the first time in four years, so if you want to buy a home and can afford to, now could be a good time because it’s unlikely to become markedly cheaper in the near future,” said Redfin Senior Economist Elijah de la Campa. “Many house hunters are waiting to see if mortgage rates fall a lot further, but that probably won’t happen anytime soon. That’s because the Fed’s latest interest rate cut and its plans for future cuts were highly anticipated, meaning they’re already mostly priced into mortgage rates. When the Fed cuts short-term interest rates, long-term rates like mortgage rates don’t always move down nearly as much.”

Home prices also tend to go up over time, so waiting to buy likely means a higher price tag and down payment. It also may mean more competition because eventually, other buyers will realize rates probably won’t come down substantially more and will jump into the market.

Buyers still cost-burdened

While housing affordability improved in August, the average American household still can’t afford to buy a home. The typical household earns an estimated $83,853 per year, which is 27.4% less than the $115,454 they need to afford the typical house. A household on the median income would need to spend 41.3% of their earnings on housing to buy the median-priced home. Any household that spends over 30% is considered “cost-burdened.” Less than one-third of home listings are affordable for the typical U.S. household, down from more than half before the pandemic.

That’s likely one reason many househunters remain on the sidelines despite the drop in mortgage rates. Home prices are up 3% year over year and are just 2.1% below their all-time high, primarily because a shortage of homes for sale is keeping prices elevated. This is giving some buyers sticker shock. Other buyers are holding off because they’re confused about the new NAR rules or are waiting to see how the presidential election shakes out.

February 2021 was the last month on record when the typical household earned enough to afford the median priced home. Back then, the median household income was $69,021, or 5.7% more than the $65,308 needed to afford the typical home.

Source: Redfin

© 2024 Florida Realtors®

Florida Housing: New Listings Up, Prices Ease

 By Marla Martin

In Florida, new listings, inventory levels are up from a year ago for both single-family homes and condo-townhouses. 

Single-family median price eased 0.8% from a year ago, condo-townhouse median price is down 4.3%.

ORLANDO, Fla. – Florida’s housing market reported increased new listings, easing median sales prices and improved inventory levels (active listings) in August 2024 compared to a year ago, according to Florida Realtors®’ latest housing data.

“As home prices moderate and inventory levels improve, it should help increase new listings and offer more choices for potential homebuyers,” said 2024 Florida Realtors® President Gia Arvin, broker-owner with Matchmaker Realty in Gainesville. “Lower mortgage interest rates will also help boost buying power and ease affordability issues.”

Florida Realtors Chief Economist Dr. Brad O’Connor said, “In August, Florida’s single-family home market was fairly calm. Closed sales declined by 1.1% year-over-year, and as has been the case for most of the year, they have tracked pretty close to last year’s totals. Year to date through August, closed sales of single-family homes are down 1.7%.”

Closed sales of existing single-family homes statewide totaled 22,675, which is down 1.1% year-over-year, while existing condo-townhouse sales totaled 7,898, down 14.9% over August 2023, according to data from Florida Realtors Research Department in partnership with local Realtor boards/associations. Closed sales may occur from 30- to 90-plus days after sales contracts are written.

The statewide median sales price for single-family existing homes in August was $411,638, down slightly (up 0.8%) from a year ago, while the statewide median price for condo-townhouse units was $310,000, down 4.3% from August 2023. The median is the midpoint; half the homes sold for more, half for less.

“New listings of single-family homes in August were up by 2.3% compared to a year ago, which is the smallest year-over-year increase we've seen for new listings of single-family homes this year,” O’Connor said. “Overall for the year, we are still up by nearly 14% in this category, but we should probably expect smaller year-over-year increases for the remainder of the year should the current pattern hold. Meanwhile, new condo-townhouse listings were up 1.8% year-over-year.

“Notice that new listings throughout this year have tracked more closely with the pre-pandemic years of 2018 and 2019 than they have with last year’s counts. But at the end of last year, new listings – which underperformed most of the year – improved to similar levels of what we were seeing in late 2018 and 2019. So, it would not be surprising to see this year's new listings toward the tail end of this year end up in the same neighborhood.”

On the supply side of the market, single-family existing homes were at a 4.5-months’ supply in August 2024, while condo-townhouse properties were at a 7.2-months’ supply.

© 2024 Florida Realtors®

Best Florida Cities to Retire

 By Jennifer Torres

Wallethub ranked four Florida cities – Miami, Orlando, Fort Lauderdale and Tampa – as the best for retirement due to lower taxes and high-quality healthcare.

MIAMI – With such celebrity residents as Oprah Winfrey, Jennifer Lopez and Jeff Bezos, the Sunshine is already a major magnet for the rich and famous. A recent study reveals retirees are also flocking to Florida, with four cities across the state snagging spots among the nation’s top five best places to retire.

To arrive at its ranking of the best states to retire, WalletHub compared the “retirement friendliness” of more than 180 U.S. cities across 45 key metrics ranging from the cost of living and tax laws to the availability of activities and the quality of health care.

Orlando, Florida claimed the top spot overall, followed by Miami in second place. Minneapolis, Minnesota came in third, followed by Florida’s own Tampa and Fort Lauderdale in fourth and fifth respectively. And out of the top 10, another Florida city, St. Petersburg, came in eighth place.

Orlando: Swapping snow shovels for sunshine

For those with their retirement sights set on Orlando, get ready to trade in your snow shovel for a set of golf clubs. With world-class theme parks, a vibrant arts scene and a plethora of dining and shopping options, your new backyard is essentially an endless vacation, with countless recreational options.

The average home price in Orlando is $385,207 and while the city doesn’t have a particularly low cost of living, with housing expenses 5% higher than the national average – utility prices are 6% lower than the national average and transportation expenses are 4% lower.

It also ranks at the top of the country when it comes to gerontologists and home health care facilities per capita. The Villages is also just under an hour’s drive from Orlando, a sprawling retirement suburb that’s become a widely popular destination for the over 55 set. The retirement mecca was recently named as the fourth most popular place in the U.S. to retire by Realtor.com®.

Miami: Retiring in style with sun, surf and sophistication

As the second-best place to retire on WalletHub’s list, Miami is a bit pricier, with an average home value of $587,252. But the city offers an abundance of activities popular with retirees – ranking at the top in the country when it comes to adult volunteer activities, art galleries and fishing facilities per capita. The city also has the fifth most museums and a large number of recreation and senior centers.

Miami is also home to some of the country’s most gorgeous beaches and many well-known healthcare facilities.

It’s also the fifth most walkable city in the country, with the majority of residents having access to quality public transportation within walking distance of their homes.

Tampa: Retiree life means smooth sailing

Last year, the city of Tampa came in first place on WalletHub’s 2023 list of the country’s best places to retire. This year it comes in at number four. Similar to Orlando, the average home price in Tampa is $385,903.

As for healthcare, Tampa General Hospital was recently named as one of the two best hospitals in Florida by U.S. News and World Report. There’s also plenty to do in Tampa, with numerous options for boating, sporting events, entrainment and fine dining.

And Sun City Center, Florida, a 55-plus community located just 30 minutes outside of Tampa, was recently selected as the most popular place in the U.S. to retire. According to Hannah Jones, an economic research analyst at Realtor.com, “It has the magic combo that aging populations prioritize: a warm beach and a big city nearby.”

With a variety of condos, duplexes and single family homes available, ranging from $50,000 to $350,000, the average price of a home in Sun City Center is $315,000 and everything is accessible by golf cart, including doctors’ offices, shopping, 11 golf courses, indoor and outdoor pools, a fitness center and a sports complex.

Fort Lauderdale: Blending luxury and relaxation

Located just a short drive away from Miami and West Palm Beach, in fifth place, Fort Lauderdale closed out the list of the country’s top five best places to retire.

With an abundance of housing options including high-rise condos, waterfront homes and gated communities, retirees have many options, but like Miami, the cost of living is higher, with an average home value of $529,481.

A number of well-known health care facilities are located within the city including the highly rated Holy Cross Health and it’s home to numerous boat marinas, golf courses, beaches, resorts and restaurants. There’s also horse racing at Gulfstream Park and gambling at the Seminole Hard Rock Hotel & Casino.

Why is Florida such a retirement hot spot?

Of course, Florida offers 1,350 miles of coastline, warm, sunny weather (233 sunny days per year, on average) and an array of recreation and entertainment options, but the state also has no income tax, no estate tax and no inheritance tax – leading the Tax Foundation to rank Florida among the top five best states as part of its 2024 State Business Tax Climate Index, while California, New York and New Jersey rank among the worst.

Just before Amazon founder Jeff Bezos’ home state of Washington enacted a new state capital gains tax in 2022, Bezos sold about $15.7 billion worth of Amazon stock – sidestepping approximately $1.1 billion in taxes that would have been due under the new tax.

He then purchased two opulent estates in Miami’s Indian Creek Village, commonly referred to as “Billionaire Bunker,” where Florida’s tax laws offer Bezos another advantage; His heirs are now insulated from Washington’s estate tax, which stands as the highest in the nation at a top rate of 20%.

Bezos later purchased a third, $90 million property on the island to temporarily reside there as the demolition of the other houses he acquired on the island proceeds.

According to WalletHub, around 68% of workers are somewhat confident that they will have enough money to retire comfortably, but only 21% are very confident. As a result, more than half of people expect to retire at age 65 or later – and three-quarters expect to do some work even after retiring.

“It’s important to choose wisely when picking where to retire, as many retirees are on a fixed income,” WalletHub Analyst Chip Lupo, said. “As a result, the best cities for retired people are those that minimize taxes and expenses, as well as have good opportunities for retirees to continue paid work for extra income, if they choose to do so. In addition, the top cities provide high-quality health care and offer plenty of enjoyable activities for retirees.”

© 2024 Advance Local Media LLC. Distributed by Tribune Content Agency, LLC.