State of the Florida Economy 2023 | Tim Chapin, PhD, FSU

Update on Florida’s Economy and Demographic Trends Dr. Tim Chapin Dean, College of Social Sciences and Public Policy Professor, Department of Urban & Regional Planning tchapin@fsu.edu

Florida’s Population Still Booms • Florida has returned to the ~300k+ annual population increase of the last several decades • Florida’s older adult population still is the lion’s share of this growth • Continued diversification is inevitable and a powerful force to the state’s demographic mix • But major changes lie in the years ahead due to massive changes in fertility rates and family formation related to changing social norms

Florida has generally added ~3 million net new residents each decade since 1960 and the 2020s appear on pace to reach that again. Looking ahead, there is growing confidence that this historic net decadal change will end in the 2030s, mainly due to massive changes in family formation and fertility rates.

The Florida Economy is Strong • Florida’s rebound from the COVID recession has outpaced the US as a whole • Unemployment remains very low, wages are trending up, and labor force participation is back to pre-pandemic levels (but projected to fall due to aging population) • Inflation has settled down, yet consumer sentiment remains low and pessimistic • State economic recovery is quite uneven, with many struggling rural counties and some urban counties (Broward, Escambia, Miami-Dade, Orange)

Counties in yellow have not come back to their total employment levels as of February 2020 (pre-pandemic)

Florida’s Wages are on the Rise

Tourism is Fully Back to Pre-Pandemic Levels 2019: 131+M visitors

2023: ~138+M visitors

https://www.visitflorida.org/resources/research/

Overall Inflation is Down…

https://www.bls.gov/charts/consumer-price-index/consumer-price-index-by-category-line-chart.htm

…But Inflation Varies by Sector

https://www.bls.gov/charts/consumer-price-index/consumer-price-index-by-category.htm

Overall Consumer Sentiment Remains Low

The Housing Market has Cooled • National and Florida data indicate substantial cooling of a red hot residential real estate market • Housing prices have flattened after historic increases, even coming down in some markets • New listings are down, time to closing has increased and the housing inventory is (slowly) starting to catch up • But permits are still below necessary levels and inventory levels are still below historic levels • The rental market is still tight despite a several year boom in construction

Residential Housing Market Settling Back Down

Housing Prices Have Slowed, But at a Lesser Rate Than the US

Florida SF Home Sales Trends

https://www.floridarealtors.org/tools-research/reports/florida-market-reports

Florida SF Home Sales Trends

https://www.floridarealtors.org/tools-research/reports/florida-market-reports

Florida Median Listing Price 2016-2023

https://fred.stlouisfed.org/series/FLUCSFRCONDOSMSAMID

Florida Monthly SF Housing Inventory 2016-2023

https://fred.stlouisfed.org/series/ACTLISCOUFL

Florida Housing Price Index 1975-2023 Index 1980: Q1 = 100

https://fred.stlouisfed.org/series/FLSTHPI

Florida Monthly SF Home Permits 1988-2023

https://fred.stlouisfed.org/series/FLBP1FH

Florida Rental Vacancy Rates 1986-2022

https://fred.stlouisfed.org/series/FLRVAC

Rental Market Has Tightened, Vacancy Rate Below 6%

Rental Costs Continue to Rise, Getting Worse than US

The State Budget Remains Strong • At the state budget level, this remains a time of relative plenty in Florida • A thriving economy, short COVID-recession, strong real estate market, a return to robust tourism (plus federal stimulus dollars) have all contributed to sizable surpluses and reserves • The state has a projected surplus of ~$8B, with expected but declining budget surpluses in the next several years

Doc Stamp Revenues Are Down, But Still Substantial