THE BIG SPLASH

Sunshine State Shines Brighter

What you should know

Florida has eclipsed New York to claim the title of the second-most valuable U.S. housing market, boasting a value of $3.8 trillion against New York's $3.7 trillion. This shift underscores Florida's appeal, propelled by a business- and people-friendly government compared to New York's more restrictive approach.

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• The COVID-19 pandemic accelerated the migration trend, highlighting the stark contrast between New York's extended lockdowns and Florida’s swift reopening, which didn't result in adverse health outcomes. The lingering memories of these lockdowns continue to spur New Yorkers' exodus.

• New York’s high income taxes contrast sharply with Florida’s lack of state income tax, making the latter an attractive destination. This tax advantage has made Florida the top choice for New Yorkers seeking greener pastures, particularly among high earners.

• Governor Kathy Hochul's promises to transform New York into “the most business and worker-friendly state in the nation” have yet to materialize into action. Skepticism remains, underscored by the state’s reluctance to reconsider its ambitious net-zero goals despite concerns from the business sector.

• New York's adherence to challenging environmental goals, including the complete electrification of the state and the elimination of fossil fuel consumption, raises alarms of potential blackouts and financial instability, further driving the population to seek alternatives like Florida.

A SCOOP OF MARKET DATA

The number that matters

Interest rates on mortgages have soared to heights unseen since 2000, plunging mortgage demand close to a 27-year nadir.

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• The escalating rates coincide with a 1.3% weekly drop in total mortgage application volume, marking a 25.5% year-over-year decline, as reported by the Mortgage Bankers Association.

• The uptick in the average contract interest rate for 30-year fixed-rate mortgages amplifies the financial strain on prospective homebuyers and current homeowners alike. A climb to 7.41% exacerbates the affordability crisis, compounded by a historical low in housing supply, elevating prices.

• Refinancing applications dwindled by 1% weekly, reflecting a 21% annual descent. With interest rates skyrocketing, the refinancing allure diminishes, leaving a minuscule number of borrowers who could potentially benefit from refinancing their mortgages.

• The enigmatic combination of escalating interest rates and a persistent housing supply deficit continues to inflate property prices, sidelining an increasing number of prospective buyers. Even the newly built homes market, a previous refuge amidst the resale market’s scarcity, witnessed a nearly 9% sales reduction in August.

A SCOOP OF DISCOVERY

Something you didn’t know

Meet Germantown, NY. The city is attracting a wave of artists and writers, with city dwellers like the Hoskins family trading the urban chaos for the town’s peaceful environment, offering an escape and serene living conditions.

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• The town provides value, with home prices and taxes lower than neighboring areas. A mix of longstanding residents and newcomers are drawn to its tranquil, picturesque settings, and proximity to areas like Hudson and Rhinebeck.

• A vibrant cultural scene marked by an influx of creatives and new art galleries is emerging. The town’s inclusive atmosphere is attracting a diverse population, including members of the LGBTQ+ community.

• The downtown area is blossoming with upscale businesses and restaurants, creating a blend of the old and new. A diverse social environment is emerging, fueled by a mix of highbrow transplants and locals.

• A 75% increase in home prices from 2019 to 2022 and a rise in the median sale price to $632,500 highlight the town’s growing popularity. Yet, it retains its relaxed, peaceful character, appealing to both immigrants and natives.

• The town’s strategic location and convenient transportation options enhance its appeal for those seeking a blend of cultural richness and tranquil living, making Germantown a balanced, attractive living option.

A SCOOP OF OPPORTUNITIES

What experts say

In 2023, experts highlight affordable real estate opportunities in Montenegro, Portugal's Silver Coast, Costa Rica’s Southern Zone, Spain’s Costa del Sol, and Mexico’s Los Cabos, blending investment potential and lifestyle benefits amidst picturesque surroundings and emerging market trends. These regions offer a mix of natural beauty, affordability, and promising returns, making them prime choices for global real estate investors and expatriates.

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• Montenegro's Appeal: Eastern Adriatic's untouched gem, Montenegro, offers dramatic landscapes similar to Croatia but at a fraction of the price, with potential EU membership by 2025 promising significant property appreciation.

• Portugal’s Silver Coast Gem: Nestled between Lisbon and Porto, this under-the-radar location combines affordability, pristine beaches, and historical charm, offering both lifestyle and rental income opportunities.

• Costa Rica’s Southern Zone: With improved accessibility, this biodiverse rich region, boasting of unspoiled beaches and forest-covered mountains, is a haven for expats and investors seeking natural beauty and tranquility.

• Spain’s Sunny Costa del Sol: A globally beloved destination boasting of stunning coasts, excellent connectivity, and a myriad of lifestyle offerings, its real estate market is expected to boom with tech and finance firms marking their territory.

• Mexico’s Blossoming Los Cabos: Becoming a global luxury hotspot, offering Southern California vibes without the hefty price tag, foreseeing a long-term transformation attracting tourists, remote workers, and celebrities alike.

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