What’s Changing for Fla. Real Estate?

ORLANDO, Fla. – After almost two pandemic years, changes created to deal with COVID-19 have created major shifts that change Florida’s real estate markets, according to a panel of site developers, Realtors® and economic development experts who spoke to more than 300 Realtors during the 2022 Florida Real Estate Trends summit Thursday.

“Prior to COVID, we saw a lot of Wall Street firms testing the waters with CEOs looking at homes,” said Kelly Smallridge, president and CEO of the Business Development Board of Palm Beach County. “Now, these CEOs are signing seven- to 10-year commercial leases, they’re legally domiciling and, most importantly, they’re buying homes and putting their kids in private schools. We now have zero slots open for any private school in Palm Beach County.”

The Real Estate Trends event was part of this year’s Florida Realtors®’ Mid-Winter Business Meetings at the Renaissance SeaWorld Orlando. In addition to Smallridge, other panelists included: Deanna Armel, broker-owner, Armel Real Estate; John Boyd, principal, The Boyd Company; and Melanie Schmees, director of business and economic research, Greater Naples Chamber of Commerce. Florida Realtors Chief Economist Dr. Brad O’Connor and Dr. Jessica Lautz, vice president of demographic and behavioral insights at the National Association of Realtors (NAR) also shared their insights on the 2022 outlook.

Kelly Smallridge, president and CEO
Business Development Board of Palm Beach County

Unfortunately, the misconception that Florida schools lag and the state’s educated workforce is lacking still lingers among many executives inquiring about relocating their businesses, Smallridge said, and that is “absolutely not the case.” Once they’re in Florida, check out the schools and have their children tested for placement, their perception quickly changes, she said.

“The average salary in Palm Beach County is $61,000, while the average salary of the people coming in now is $1 million,” she added – another boon to local businesses and area development.

Many of the business executives interested in moving to Florida want to look at homes first, she said, and may not mention a possible relocation.

“When you’re taking a buyer around to see homes, see if they also have any interest in bringing a business here,” Smallridge advised brokers and real estate agents. “You can offer them information to connect with local chambers of commerce or economic development officials. We help them understand all the logistics of what it takes to get them up and running. So, we’re really part of your team. Together, we can land not only the home but the company as well.”

Melanie Schmees, director of business and economic research
Greater Naples Chamber of Commerce

Like real estate, economic development often involves referrals and regional cooperation, said Schmees. “Naples is a unique market,” she explained. “Right now, we have a 1% industrial vacancy rate; sometimes, we need to direct those interested to other areas near us like Fort Myers. The whole region benefits.”

One factor important for ongoing business relocations and continued economic development in Florida will be the consideration of employees’ needs and how they can manage new lives here.

“We need to create an environment that works for the workers, not only the business executives,” Schmees said. “Often, their workers are concerned that they can’t make the move. They’re worried they can’t find housing or figure out their cost of living.”

Deanna Armel, broker-owner
Armel Real Estate

“Florida in general is a draw for business and for out-of-state buyers,” she said. “There’s no state income tax, our weather, beaches, and in Orlando, our theme parks. Since COVID (the start of the pandemic), home preferences have changed. People want an office, a pool, flex space and a yard.”

According to Armel, the influx of major business relocations and wealthy buyers who can pay cash – like many California residents moving to Florida after selling their homes – has made an impact on the housing market, particularly in the luxury-home sector.

“I call it monopoly money,” she said. “Cash is great, but it’s really hurting our buyers who need financing, our veterans, our workers and first-time homebuyers. The competition is unbelievable, especially in new construction. New construction, turn-key, luxury homes: That’s what California buyers want.”

John Boyd, principal
The Boyd Company

Before the pandemic, about 10% of employees worked remotely, said Boyd. “Today, over half of the workforce works remotely, at least on a hybrid basis, and this change is here to stay. It saves businesses too much in terms of office space, operations and so on. It’s also a great recruiting tool – people like the flexibility.”

He noted that economic development is now a “people first operation.” And that, he said, “has established a new class of economic development workers – the residential real estate agent.”

Brightline, the private high-speed rail system running from Miami to West Palm Beach with an expansion in the works to Orlando, is a positive for marketing Florida for economic development, the panelists said. “I think we’ll see a lot of exciting development projects along those Brightline lines, with the ability to connect between Central Florida and South Florida,” Boyd said.

Another plus for Florida? “Our state is a magnet for global talent, experience and skill sets,” he added. “Having no state income also attracts industry and development. Business and money tend to go where it feels welcome.”

© 2022 Florida Realtors®