Spending

Almost 330,000 Americans moved to Florida in the past year: Here’s how much it costs to live there

“Many people are buying property sight unseen.”

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Take a look at the number of people who've moved to Florida recently, and you'll see it's why a hot market. The Sunshine State gained an estimated 329,717 new residents between April 2020 and April 2021, according to a report from the state's Office of Economic and Demographic Research.

Newcomers have poured in from all over: Florida was the No. 1 destination for relocating Americans in 2020, reports Move.org, which used internal metrics, U.S. Census Bureau data, and a Pollfish survey of 700 U.S. adults to determine each state's popularity. And the state was the third most popular place to move during Covid according to U-Haul migration stats compiled from more than two million customer transactions.

Some movers want in so bad that they're willing to live in a spot they've never visited in person. "Realtors we talk to have said many people are buying property sight unseen," says Colin B. Exelby, a certified financial planner and the president and founder of Celestial Wealth Management. "People who visited during the pandemic are leaving high-cost areas for the many financial and weather benefits of Florida."

Housing costs in Florida

Moving to Florida could help you save money — or cost you more. It depends on where you're coming from and whether you're in the market to rent an apartment or buy a home.

The national average rent for a one-bedroom apartment is $1,561, according to Apartment Guide's March 2021 rent report. You can find a place for much less in Daytona Beach, where the typical rent is $1,187 a month, notes RentCafé. If you want to touch down in Orlando, though, expect to pay $1,432.

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It gets pricier in Fort Lauderdale: Apartments there go for an average of more than $2,000 monthly.

For homebuyers, the statewide median home value is $277,429, according to Zillow, just a bit higher than the national median of $276,700. In Palm Beach, the typical home value is about $1.25 million.

Taxes in Florida

Nearly 28% of the people who settled in The Sunshine State came from Texas, a 2020 National Association of Realtors analysis found. Another nearly 15% relocated from New York, and over 6% of California's residents headed to the beaches of Florida instead. 

Lucky for Floridians, the taxes are as nice as the weather. Florida is one of a handful of states that doesn't levy a state income tax. Residents also get a deal on homeownership, effectively paying less than 1% for property taxes while other popular states pay more than 2%. New Jersey has the highest rate at 2.47%. 

"The lack of an income tax is a big draw for many folks, but Americans need to remember the benefit is not instant," Exelby cautions. If you move midway through the year, for instance, "remember any income you earned in your previous state before the move is still likely to be subject to that state's tax code."

People who visited during the pandemic are leaving high-cost areas for the many financial and weather benefits of Florida.
Colin B. Exelby
CFP, president and founder of Celestial Wealth Management

Keep in mind that sometimes "there are city and local taxes you didn't think about," James A.J. Revels, a CPA and member of the American Institute of CPAs personal financial planning executive committee, recently told CNBC.

Everyday items such as groceries, utilities, and transit tend to be cheaper down South, too, according to Best Places' Cost of Living index. Overall, on a scale where the national average cost of living is 100, Florida scores 102.8, while California scores 139.9 and New York scores 120.5. Texas is 93.9.

'Weigh the pros and cons accordingly' before you move

Lots of Americans heading to Florida made way for many others to leave. While the state ranked as Move.org's most moved to, it was also the fourth most-abandoned state.

Findings from national moving company Atlas Van Lines show that just over 50% of the state's total moves last year were people entering versus exiting. Idaho, in contrast, had 66% inbound moves.

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But there's no denying that Florida is a place people want to be, even if some residents are moving on. For every one person that departed Tampa, about 1.47 chose to move there, according to a LinkedIn analysis of 2020 ZIP code changes among its 174 million U.S. members. The same was true with Jacksonville.

Shortly after the new census numbers were released, Florida was allocated another congressional seat to account for its population growth relative to other states.

Florida's popularity isn't expected to ebb any time soon: it's expected to gain an average 845 new residents a day until 2025, according to state projections.

That growth could make it pricier to move there in the near term. Home values in Florida have gone up 10% in the past year and could likely increase another 8% in the next year, according to Zillow. Nationally, rents are up more than 3% since last year, too.

Save steadily and pad your emergency fund if your heart is set on a move.

"Weigh the pros and cons accordingly and make sure to have enough funds to make it," says Tal Shelef, a real estate agent and co-founder CondoWizard. Getting your financial house in order "can protect you in tough times and help you grab opportunities in good times."

Nearly 9 million Americans relocated in 2020 and more are packing for this year. "Moving is not easy," adds Shelef, so preparation is key, whether you're eyeing The Sunshine State or somewhere else.

Grow is published by Acorns + CNBC. Acorns helps you invest spare change automatically into diversified portfolios. Download the app today or learn more at Acorns.com.

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