Mixed Signals: Amid Economic Boom, South Florida Population Shrinks
By Jeff Ostrowski August 11, 2023 7:00 am
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Just about every economic data point says South Florida is booming. Blue-chip companies are moving in, unemployment is low, job growth is solid and demand for office space is robust. The list continues: Home prices have soared, bank deposits have ballooned and apartment rents keep rising.
But one key indicator — population growth — tells a different tale. Population counts in Miami-Dade County and Broward County both peaked in 2019, according to the U.S. Census Bureau. While Palm Beach County has continued to add residents, the overall population of the three-county region declined from 2019 to 2022, during what otherwise were the region’s pandemic boom years.
According to the latest census estimates, Miami-Dade County had 2.67 million residents in 2022, down 1.4 percent from 2019. Broward County had 1.95 million residents, off 0.4 percent from three years earlier. Palm Beach County’s population count of 1.52 million was up 1.4 percent from 2019.
For real estate executives on the front lines of a booming property market, the stats don’t match their daily experiences. Craig Studnicky, founder and CEO of Miami-based luxury real estate firm International Sales Group, was stuck in Miami’s gridlocked traffic — an indicator often cited as evidence of a population boom — when he saw a headline about the region’s declining population.
“I said, ‘There’s no effing way this is true,’” Studnicky told Commercial Observer.
The population estimates create a wrinkle in the region’s well-polished pitch — that South Florida has experienced a one-way influx of in-migration since the pandemic. While there have been many new arrivals, census numbers show that the newcomers have been outnumbered by people leaving South Florida.
“Everyone is expecting significant growth as a result of people moving to Florida and anecdotal evidence about traffic increasing,” Maria Ilcheva, census information center lead at Florida International University’s Jorge M. Pérez Metropolitan Center, told Commercial Observer. “But the numbers don’t tell the same story.”
In contrast to South Florida’s population decline, Florida as a whole is the fastest-growing state in the nation. Duval County, home to Jacksonville, grew by 5.9 percent from 2019 to 2022. Orange County in Central Florida expanded by 4.1 percent.
Housing affordability is a key factor in the divergent population trends. In Miami-Dade County, where the median price of homes sold in the first quarter of 2023 was $460,000 and median family income was $73,100, less than 17 percent of homes sold were in reach of a typical family, according to the National Association of Home Builders and Wells Fargo Housing Opportunity Index. In Jacksonville, where home prices are lower and wages are higher, 47 percent of homes were affordable for median-income families.
Affordability trends have reshaped who’s moving into South Florida, and who’s moving out. IRS data for 2021 shows that new, out-of-state arrivals to Miami-Dade County had adjusted gross incomes of more than $220,000 per person. Those who left Miami-Dade County for another state had incomes of less than $50,000.
“There is a replacement of the middle-income households by those in the higher-income categories,” Ilcheva said.
In another sign of the wealth influx, deposits held in Miami-Dade County bank branches soared 49 percent from mid-2019 to mid-2022, according to Federal Deposit Insurance Corporation data.
Studnicky said new arrivals from New York and California are snapping up properties at prices that are largely influenced by values from the places they left. That’s driving up South Florida prices, while also squeezing long-time residents.
“People are coming here with a lot of money and a little bit of swagger,” Studnicky said.
Given the combination of strong demand and a lack of supply, he worries about a hot market overheating, as a lack of available sites and soaring materials costs have hampered construction. Should home prices keep soaring, South Florida could lose its allure.
“We’re way short of what we need,” Studnicky said. “My concern is we may ultimately become a victim of our own success.”
Another variable is job growth. South Florida posted 3 percent job growth from June 2022 to June 2023, according to the Florida Department of Economic Opportunity. But other areas did better: Orlando experienced 3.7 percent annual job growth, the Tampa metro area was up 4.1 percent and Jacksonville’s job base ballooned by 5.1 percent over the past year.
While South Florida’s 3 percent pace of job growth was below Florida’s 3.4 percent rate, it’s still a strong showing. Only a handful of states topped the 3 percent level in June, and many states — including California, Illinois, New York and North Carolina — posted job growth in the low 2 percent range.
Compared to pre-pandemic levels, South Florida’s job gap against the rest of the state is even wider. South Florida employment rose 4.3 percent from February 2020 to June 2023. But Tampa Bay’s job count rose 9.3 percent, while Jacksonville’s job base was up 9.4 percent in that time, according to U.S. Department of Labor data.
“Any community that starts losing its middle class needs to pay close attention,” Ilcheva said. “It may be an indicator of an economic downturn in the future.”
Jeff Ostrowski can be reached at jostrowski@commercialobserver.com.
