Sun down on the sunshine state? Home buyers no longer see Florida or Texas as states to ‘get amazing value’ — here are the 2 states they’re moving to instead
For Americans tired of cold winters and high taxes, two states in the U.S. have long topped the list of prime destinations: Texas and Florida.
But, despite the abundant sunshine, absence of state income taxes, and even the chance to be Mickey Mouse's neighbor, both states are losing their status as prime relocation destinations.
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So why are fewer U-Hauls headed for the Lone Star and Sunshine states? It's simple. "Out-of-town home buyers no longer see Florida as a place to get amazing value," Eric Auciello, a local Redfin Sales manager explained in a report.
Both Florida and Texas have become victims of their own success, with population surges driving home prices up and pushing value-seekers out.
So where are homeowners who want nice weather and affordable houses going? Two other states in particular should expect to need to make room for newcomers soon.
Florida, Texas housing markets stagnating
Texas and Florida have long been prime destinations, but when the pandemic era made remote work the norm, both states saw an explosion in their populations.
The total number of Floridians increased by a whopping 737,945 between 2020 and 2022 according to the state's Office of Economic and Demographic Research. Texas, for its part, has seen its population grow to more than 30 million. The state also took the top spot for population growth in 2023, followed by Florida with the two locales adding 473,453 and 365,205 residents respectively.
As out-of-towners swept in and bought houses, the affordable markets that had been such a draw began to disappear.
“Two years ago, the North Port metro was one of the most competitive housing markets in the country because it was affordable for remote workers and there was a shortage of homes for sale, but none of those things are true today," Auciello said.
The pandemic-era price surge now has many would-be buyers turning away from these markets they fear are overvalued — even as builders flood the MLS with new construction homes and offer generous concessions to offload properties they rushed to construct during boom times.
With the rise in available homes coupled with the demand drop, metro areas in Florida and Texas dominated the list of locales where sellers were most likely to cut prices. Metros in both states also combined to take eight of 10 spots on the list of areas with large year-over-year supply increases. And North Port Sarasota in Florida and San Antonio in Texas were two of just three metros in the country with a fall in median sale prices between March 2023 and March 2024.
As if this wasn't enough to stress out sellers, an insurance crisis in Florida prompted by companies exiting flood-prone areas is scaring off potential buyers faced with big potential bills and limited coverage choices.
Read more: This little-known investment strategy can save you thousands on your taxes
Americans have moved on
With Florida and Texas no longer sending out their siren call, Auciello says out-of-state home buyers have turned to some new destinations when seeking out sunnier skies and lower prices: North Carolina and Tennessee.
North Carolina ranked third on the list of states with the largest numeric population growth from 2022 to 2023, according to U.S. Census data, while Tennessee came in at number six. U-Haul, which measures state growth based on one-way moving equipment rentals, also listed North Carolina as the third-biggest growth state in 2023 with Tennessee fifth on the list.
There's good reason home buyers have adopted these areas, and it's not just their top-notch college football teams.
Tennessee, like Florida and Texas, has no state income tax. Both Tennessee and North Carolina rank in the top half of U.S. states in terms of their low tax burdens, with Tennessee boasting the third-lowest total tax burden in the country.
Tennessee also has the seventh-lowest cost of living of any U.S. state, while North Carolina ranks at number 26. Median home sale prices in Tennessee and North Carolina also came in at $378,900 and $386,300 respectively according to Redfin, compared with a nationwide average of $420,321.
Both states also offer plenty of great places to live in and enjoy, from major urban centers like Charlotte and Raleigh or Knoxville and Nashville to beautiful beaches in North Carolina and the Great Smoky Mountains in Tennessee. For those leaving Disney but still jonesing for an amusement park fix, they can even find it at Dollywood where there's still flying elephants to ride.
Of course, there's that all important sunshine to worry about too. But, with an average of 213 sunny days in North Carolina and 207 in Tennessee (compared to the national average of 205), life won't be too bad.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
