By Gay Cororaton, MIAMI REALTORS Chief Economist
This week, the Bureau of Labor Statistics released state-level data on August employment and July job openings. The data shows that Florida tops all states with the largest number of job openings where there are more job openings than job seekers.
By number, Texas (622,000), California (622,000), Florida (513,000), and New York (405,000) have the most job openings. However, only Florida has more job openings than job seekers (144,554 more openings than unemployed or 1.4 openings/job seeker) while there are fewer job opening per job seeker in Texas (-4,992, 0.99 openings per job seeker) , California (-397,993, 0.61 job openings per job seeker) and New York (-20,778, 0.95 job openings per unemployed).
Other states with fewer job openings than unemployed are Illinois (-1,149), New Jersey (-23,425), Michigan (-18,519), Washington (-41,566), Nevada (-21,741), and Rhode Island (-2,333).
While job opportunities also abound in Virginia with 2.1 job openings per job seeker, the number of openings (273,000) is about half the number in Florida.
Florida’s unemployment rate as of August at 3.3% is below the national rate of 4.2%.
At the county level, job creating is outpacing the national rate (1.3%) as of 2024 Q1 compared to one year ago: Miami-Dade (2.5%), Broward (1.4%), Palm Beach (1.7%), Martin (2.0%), and St. Lucie (1.9%)
Florida’s record of job creation since the pandemic has been phenomenal, with nearly a million jobs create (987,000) compared to the pre-pandemic period (August 2019-August 2024). Job opportunities continue to grow, helped by the state’s tax-friendly policies. The Tax Foundation ranked Florida as the 4th best state in terms of the state business tax climate (Wyoming, South Dakota, and Alaska were the top 3).[1]
More job opportunities will support out-of-state migration from younger adults into Florida
What does this mean for the real estate market? Florida’s immense job opportunities for job seekers will likely fuel the migration out of California, New York, New Jersey, and Illinois into Florida not only among retirees, but among younger folks looking for a job.
According to driver license exchanges data during 2024 Q1-Q2, migration from New York and California remain highly elevated compared to pre-pandemic levels in 2019 Q-Q2. New York driver license exchanges remain elevated compared to the first half of 2019 in all counties despite the decline from 2021-2022 peak levels: Miami-Dade (+35.3%), Broward (+8.6%), Palm Beach (+8.7%), Martin (+25.5%), and St. Lucie (+30.8%). California driver license exchanges are also above pre-pandemic levels across all counties: Miami-Dade (+57.1%), Broward (+10.1%), Palm Beach (+29.9%) Martin (+48.1%), and St. Lucie (+25.0).[2]
Florida’s strong job market and sustained migration will underpin a demand for owner-occupied housing, rental housing, and commercial real estate, particularly for retail and industrial space. MIAMI’s analysis of Internal Revenue Migration data shows that out-of-state movers tend to have higher income on average than households who lived in the same county or moved out of the county. In Miami-Dade County, the average adjusted gross income of households who moved to the county (total adjusted gross income of movers divided by number of tax returns) was $175,600, which is 78% higher than the average income of households who left the county ($98,800) and 79% higher than the income of households who lived in the same county ($98,100).[3]
Job Growth, migration, and lower mortgage rates will fuel a sales rally in 2025
Strong job growth, more housing supply and choices for homebuyers, and lower mortgage rates that could fall to 5% by end of 2025 create a potent combination of factors that will likely spark a double-digit sales rally in 2025.
In fact, the August 2024 sales figures are already portending a positive outlook. In Miami-Dade, single-family sales rose for the second straight month. The single-family market remains very robust, with home prices rising in all counties: Miami-Dade (3.2%), Broward (1.0%), and Palm Beach (2.1%). Buyers will face more options, with active homes for sale at a healthy level of 5 months’ supply.
I expect sales to pick up even more as mortgage rates continue to trek lower. Our estimate is that on a $600,000 mortgage with 10% downpayment, buyers save about $500 per month on a $600,000 home when the interest rate falls from 6.5% to 5%, enabling about 10,000 more renter households to afford a mortgage, a 10% in annual sales.
Regarding the condominium market, inventory has been rising, but months’ supply is still within the range of a balanced market: Miami-Dade (10 months), Broward (8 months), Palm Beach (7 months). For context, months’ supply was at 13 months in August 2019. Buyers are favoring single-family homes versus condos right now given the condo regulations, but condo sales prices have remained basically unchanged from one year ago Miami-Dade (- 0.2%), Broward (0%), Palm Beach (3.3%). So prices are not crashing as the media has inaccurately cited.
[1] 2024 State Business Tax Climate Index | Tax Foundation
[2] Out-of-State Driver License Exchanges Remain Above Pre-Pandemic Levels in Miami-Dade County in the First Half of 2024 – MIAMI REALTORS®
[3] Migration Bolstered Southeast Florida’s Aggregate Household Income by $10 Billion in 2022 – MIAMI REALTORS®
