Florida Is the Big Winner as the Wealthy Move Out of Northern States

Florida Wins the Wealthy Relocation

Roughly 5 million Americans move from one state to another annually and some states are clearly making out better than others.

Florida and South Carolina enjoyed the top economic gains, while Connecticut, New York and New Jersey faced some of the biggest financial drains, according to a Bloomberg analysis of state-to-state moves based on data from the Internal Revenue Service and the U.S. Census Bureau.

Connecticut lost the equivalent of 1.6% of its annual adjusted gross income, as the people who moved out of the Constitution State had an average income of $122,000, which was 26% higher than those migrating in. Moreover, “leavers” outnumbered “stayers” by a five-to-four margin.

Florida Big Winner

Bloomberg’s analysis included all 50 states and the nation’s capital to provide a fuller picture of aggregate income flows from migration. About 10% of the population moves annually, or about 35 million people, according to the Census Bureau. Most moves are within the same county.

Florida posted a net income influx of nearly 3% of the state’s adjusted gross income in 2016. South Carolina, Idaho and Oregon were also among the largest gainers in the interstate shuffle.

Bloomberg’s tally also included analysis by absolute net gain and loss of income.

New York’s annual net loss was the highest, with a net $8.4 billion leaving the state. Exiting incomes of $19.1 billion were replaced by people who brought in $10.7 billion less in income. Illinois and New Jersey were next with net outflows of $4.8 billion and $3.4 billion, respectively.

Those three states also had three of the four highest proportions of outbound versus inbound residents last year, according to the United Van Lines, the largest U.S. household goods mover.

Florida nets $17.2 billion from inbound moves vs outbound

Florida Wins Wealthy Relocation

Florida was the top financial magnet, reeling in $17.2 billion more than it lost, about seven times the amounts netted by each of the runner-ups Texas, Washington and South Carolina. The Sunshine State was the No. 1 recipient of the wealth exodus from 18 individual states — with New York, Illinois and New Jersey combining to contribute about $8 billion to Florida’s income base.

While long a haven for retirement, Florida’s effort to lure Wall Street executives has gained traction thanks to a provision in the federal tax law passed by the Trump administration that hits residents of high-tax states by putting a lower cap on state and local tax deductions.

Florida is also one of seven states that collect no income tax. The others are Alaska, Nevada, South Dakota, Texas, Washington and Wyoming. While New Hampshire and Tennessee don’t have a state income tax, they do collect taxes on dividends and income from investments.

Billionaire hedge fund manager David Tepper, once ranked as New Jersey’s richest resident, moved his main address and the headquarters of Appaloosa Management LP to Florida a few years ago. Real estate mogul Barry Sternlicht told employees of Starwood Capital Group that the firm’s headquarters will shift from Greenwich, Connecticut, to Miami Beach by 2021.

Floridians’ Consumer Confidence Hits 17-Year High

consumer confidenceConsumer confidence in Florida reached its highest level in 17 years, increasing 1.4 points in April of 2019 to 102 from a revised figure of 100.6 in March.

These levels of confidence have not been observed since March 2002 when consumer sentiment reached 102 points.

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

 

Current conditions
Floridians’ opinions about current economic conditions were mixed. Views of personal finances now compared with a year ago increased eight-tenths of a point, from 96.7 to 97.5. Conversely, opinions as to whether now is a good time to buy a big ticket item such as an appliance decreased 1.2 points, from 107.5 to 106.3.

Future expectations
The three components representing expectations for future economic conditions improved in April. Expectations of personal financial situations a year from now rose 3.2 points, from 106.8 to 110 – the highest level for this component since May 1999 when it reached 110 points.

Expectations of U.S. economic conditions over the next year increased 2.3 points, from 97.6 to 99.9. Similarly, expectations of U.S. economic conditions over the next five years increased 2.4 points, from 94.2 to 96.6.

“Overall, Floridians are more optimistic,” says Hector H. Sandoval, director of the Economic Analysis Program at UF’s Bureau of Economic and Business Research. “April’s confidence boost stems from the positive outlook regarding national economic conditions in the short- and long-run. It is worth noting expectations are split among the population by gender, with women reporting less-favorable views.

Other economic indicators in Florida continue to be favorable. In March, economic activity expanded and the Florida unemployment rate was unchanged at 3.5 percent. Compared with last year, the number of jobs added statewide was 209,700, an increase of 2.4 percent.

Among all industries, professional and business services gained the most jobs, followed by education and health services, and leisure and hospitality. The information industry was the only sector losing jobs.

Additionally, personal income in Florida increased 5.2 percent in 2018 compared with 4.5 percent for the nation, according to the latest report from the Bureau of Economic Analysis. Net earnings, which is the sum of wages and salaries, supplements to wages and salaries, and proprietors’ income, contributed most to this increase in personal income. Professional, scientific, and technical services and construction were the leading contributors to the earnings increase in Florida.

“Looking ahead, given the economic outlook and the current levels of confidence, we anticipate consumer sentiment to remain high in Florida in the following months,” Sandoval adds.

Conducted April 1-25, the UF study reflects the responses of 539 individuals who were reached on cellphones, representing a demographic cross section of Florida. The index used by UF researchers is bench-marked 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.

Florida Realtors® April 2019

The 18 Cities Poised for Economic Growth

Florida Economic Growth

For the past few years, oil towns have dominated the ranks of the fastest-growing economies in America. Now that the energy boom is fading, a new leader is emerging: Retirement communities in Florida that are buoyed by a surge in baby boomers.

Naples, Florida, topped the list of metropolitan areas that are expected to see the most economic growth next year, according to an analysis of data in a new report from the U.S. Conference of Mayors prepared by IHS Global Insight. The economy there will grow 4.9 percent in 2016, according to the forecasts. The Villages, a sprawling senior community that has already been the fastest-growing city by population for two straight years, ranked third. The map below shows how metro areas in Florida made up half of the top 18 performers.
Florida Front runners

1. Naples/Marco Island
2. Sebring
3. The Villages
4. Cape Coral/Fort Myers

Florida Economic Growth

In 2014, the front runners consisted of mostly energy patch areas, many of which will probably end up as some of the worst-performing economies next year. Nowhere is the shift clearer than in Midland, Texas, which saw the best economic growth in the country in 2014 (11.9 percent) according to the report’s data. The expectation is that it will rank dead last (3.2 percent contraction) in forecasts for 2016. Other areas that are also expected to struggle include Midland’s neighbor Odessa and Casper, Wyoming.

With these previous oil and gas hubs tumbling down the ranks, it makes room for Florida’s metro economies to take their places at the top of the list in 2016.

Other metropolitan areas slated for growth in 2016 include greater San Jose, California, which makes up the heart of Silicon Valley; Austin, Texas; and Provo, Utah.

Bloomberg.com June 2015