For much of the last half of the 20th century, Florida was one of the most popular landing spots for American retirees and it's not hard to understand why. Year-round sunshine, low home prices and zero state income taxes always have strong appeal. Despite that, baby boomers are increasingly choosing real estate markets outside of Florida as retirement destinations, which creates a tremendous opportunity for real estate investors.
Trending Now:
- This billion-dollar fund has invested in the next big real estate boom, here's how you can join for $10.
This is a paid advertisement. Carefully consider the investment objectives, risks, charges and expenses of the Fundrise Flagship Fund before investing. This and other information can be found in the Fund's prospectus. Read them carefully before investing. - This city is the clear winner of Zillow's 2024 Home Value Forecast — No surprise as the number of millionaires there grew by 75% in the last decade.
It's no secret that millions of baby boomers are set to retire in the next several decades. Real estate data firm SmartAsset analyzed mortgage statistics for 2023 and discovered an interesting trend. The Sunbelt remains a preferred destination, but none of the top five markets in terms of mortgage origination for baby boomers were in Florida. There was even a city outside of the Sunbelt in the top five.
SmartAsset's top five destinations are as follows:
· Raleigh/Cary, North Carolina-2.76%
· Nashville/Davidson/Murfreesboro/Franklin, Tennessee-2.66%
· Phoenix/Mesa/Chandler, Arizona-2.64%
· Indianapolis/Carmel/Anderson, Indiana-2.63%
· Charlotte/Concord/Gastonia, North and South Carolina-2.60%
Orlando, Tampa/St. Petersburg and Miami used to be red-hot retirement markets. Last year, Tampa/St. Petersburg and Orlando followed Jacksonville at sixth, seventh and eighth, but Miami didn't even make the top 15. Other markets that made the list include Denver/Aurora/Lakewood, Colorado, Atlanta/Alpharetta/Sandy Springs, Georgia and Las Vegas/Henderson/Paradise, Nevada.
A diverse group of markets shows that baby boomers are considering multiple factors in choosing retirement destinations. Warm weather and sunny beaches are nice but are no longer the primary considerations for baby boomers approaching retirement. Undoubtedly, a desire to be closer to family and children is a major motivator, but the diversity in market choices is stunning.
Don’t Miss:
- A billion-dollar investment strategy with minimums as low as $10 — you can become part of the next big real estate boom today.
This is a paid advertisement. Carefully consider the investment objectives, risks, charges and expenses of the Fundrise Flagship Fund before investing. This and other information can be found in the Fund's prospectus. Read them carefully before investing. - Commercial real estate has historically outperformed the stock market, but few investors have the capital or resources needed to invest in this asset class. Get started investing in commercial real estate today.
Other factors could be influencing this shift away from the Sunshine State. For much of the 70s, 80s, 90s and even early 2000s, one of Florida's main draws was an abundance of affordable condominiums, which offered seniors an ideal combination of ownership and low maintenance. However, Florida's condominium market has suffered from a series of unforeseen difficulties for several years.
Florida's location in the extreme Southeastern U.S. is ideal for warm weather, but as climate change's effects become more pronounced, this "advantage" has become a disadvantage. Climate change has heated the waters off Florida's coasts and made the state more vulnerable to hurricanes than ever before. Multiple named hurricanes have made landfall since 2018 and they've caused tens of billions of dollars in damages.
Consequently, insurers have been leaving the state or raising premiums to levels many seniors on fixed incomes simply can't afford. As if that weren't enough, a raft of new safety regulations is requiring older condominiums to make costly repairs. This is leading to many condo owners getting five- and six-figure assessments.
The combination of high insurance premiums, increased hurricane activity and uncertainty about the future of Florida's real estate market is likely playing a major role in motivating today's baby boomers to look elsewhere. That means there will be plenty of opportunities for investors in the markets identified in SmartAsset's mortgage origination data and elsewhere. Consider this when examining REIT asset portfolios or the earning potential of income property before you make your next move.
You Can Profit From Real Estate Without Owning Property
The current high-interest-rate environment has created an incredible opportunity for income-seeking investors to earn massive yields and you don't have to own property to do it…
The Arrived Homes investment platform has created a Private Credit Fund, which provides access to a pool of short-term loans backed by residential real estate with a target 7% to 9% net annual yield paid to investors monthly. The best part? Unlike other private credit funds, this one has a minimum investment of only $100.
Looking for fractional real estate investment opportunities? The Benzinga Real Estate Screener features the latest offerings.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
