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Business Insider
6 days ago
- Business
- Business Insider
Trouble in Florida's real estate paradise
Zach Janik had all the makings of a Florida lifer. Born and raised in West Palm Beach, he spent most of his adult years in St. Augustine, a small beach town on the state's northeast coast. In 2018, just shy of 30, he purchased a tidy three-bedroom house for $195,000. Life was good. A few years into the COVID-19 pandemic, though, he no longer recognized the place he had long called home. The area around St. Augustine was bursting with new arrivals and vast expanses of cookie-cutter homes to meet the growing demand for housing. All those new residents clogged the roads, forcing Janik, who worked in sales, to spend long hours sitting in traffic to visit clients. Even if he wanted to move to another place in Florida, he couldn't afford it — real estate prices had climbed so much that even a humble starter home like his was most likely out of reach. Such tales of trouble in paradise are common these days. An undisputed winner of the pandemic relocation boom, the Sunshine State lured millions of movers with its siren song of beaches, balmy weather, and absence of a state income tax. Now it's nursing a hangover. Residents across the state are experiencing an affordability crisis, hurricane-fueled insurance nightmares, and eye-watering property tax bills. Net migration to Florida has plummeted from the heady days of 2022. Owners of aging condos can't find willing buyers. Home prices just dropped by their biggest percentage in more than a decade, with economists and analysts projecting a prolonged slide in property values. It'd be easy to dismiss these challenges as unique to the curious appendage on the continental US, but the state is actually a solid bellwether for the rest of the country. Other markets, like the Southwest and the rest of the Southeast, show similar signs of softening. Climate risks are no longer solely a concern for the coasts. And of course, no place is immune to the broad trends quashing homebuyers' dreams: mortgage rates that refuse to drop, prices that remain well above their pre-pandemic level, and general hand-wringing over the economy. Florida isn't some anomaly. In fact, it's as if all the forces driving the country's real estate market converged there and got cranked up to max volume. Most people I spoke with for this story were still bullish on Florida in the long run — the state's natural appeal hasn't gone anywhere. But the comedown from the pandemic-era highs will be messy, and some may choose to dodge it altogether. That includes Janik, who in 2023 moved out of his home state to Hershey, Pennsylvania. He was happy to trade what he described as the "overdevelopment" of St. Augustine for cheaper real estate and mountain views. Even though he eventually got fed up with Florida, his financial windfall is a testament to the state's wild arc over the past few years: He sold his property for $345,000, a stunning gain of 77% in less than a five-year span. "I miss the beach. I miss my friends," Janik tells me. But at the end of the day, he says, "It just doesn't feel like home anymore." The recent turn in Florida's housing market may sound complex, but it boils down to principles straight out of Econ 101: supply and demand. First came the demand. With white-collar workers liberated from their office desks, baby boomers cruising into retirement, and a general desire for easy living sweeping over the country, Florida made for an obvious destination. Plus, it was pretty cheap, especially for city slickers tired of their shoebox apartments or cramped homes sitting on million-dollar lots. Between April 2020 and July 2024, Florida saw a net gain of roughly 1.8 million residents, according to Census Bureau estimates, consistently jockeying for the title of fastest-growing US state. Florida continued to welcome plenty of snowbirds, sure, but it also lured venture capitalists, crypto speculators, and pretty much anyone who was sick of COVID restrictions or was just chasing that "vacation" feel. As one Business Insider headline read in late 2023: " Young people are flocking to Florida." All those transplants needed places to live. The lower half of the US, otherwise known as the Sun Belt, has traditionally been a hotbed of home construction, helping keep prices in check despite the region's population growth. But even by the Sun Belt's development-friendly standards, builders in Florida were busy. They completed more than 760,000 new homes between April 2020 and July 2024, the census estimates, a nearly 8% increase in the state's housing stock. Only five states saw bigger building booms on a percentage basis, though with the exception of Texas, all have far fewer residents than Florida. The Sunshine State is home to about 6.8% of the nation's population, but it accounted for nearly 12% of new home construction permits issued last year, an analysis by found. In both Texas and Florida, homebuilding activity "got close to or exceeded subprime, crazy construction days," Rick Palacios Jr., the director of research at John Burns Research and Consulting, tells me, referring to the heady times just before the 2008 collapse. But even the most ambitious builders couldn't keep up with the influx of transplants, investors, and vacation-home buyers in Florida. As more people angled for homes, prices soared. According to data from the real estate search portal Redfin, the median home price in Florida peaked at $423,000 in April 2024, up 61% from the onset of the pandemic. Many of those fresh arrivals eventually soured on paradise, though: too hot, too expensive, or just not home. Even a vacation, it turns out, can get a little old. And when lots of new housing supply hits just as buyer demand is waning, the stage is set for prices to drop — just ask builders in Texas. Last year, I wrote about the cooling of the Austin market, where home prices are now down about 14% from their peak, per Redfin. In many ways, the story there is repeating itself in Florida: A bunch of people moved in, home prices shot up, and builders responded by putting tons of shovels in the ground. Then interest rates jumped, home loans got more expensive, and buyer demand hit the skids. Cue the price cuts. There are, of course, some more Florida-specific factors at play. Back-to-back hurricanes tore through its western coast late last year, adding to the existing home insurance quagmire. Premiums have skyrocketed in the past few years, and multiple home insurers have abandoned the state entirely. The average cost of home insurance in Florida climbed 45% from 2017 to 2022, according to an analysis by the Florida Policy Project. Steep HOA fees, along with the hefty insurance outlays, have made it difficult for owners of aging condo units to offload their properties. Florida has also lost some of its luster among US movers. Four of its biggest metros — Tampa, Miami, Orlando, and Fort Lauderdale — were among the 10 areas around the country that saw the steepest dropoff in net domestic migration from 2023 to 2024, Redfin found. So far, the about-face in Florida's housing market has put only a small dent in headline property values. Sales prices in Florida are down roughly 3% from their high point in spring 2024, per Redfin — hardly even "correction" territory, let alone a bust. But Florida could still have a ways to fall. Builders and agents in Texas — where the pandemic frenzy has cooled off considerably — seem to have found an equilibrium, Cara Lavender, a senior research manager at John Burns, tells me. Sure, they're selling fewer homes each month, but they've slashed prices enough that they're able to keep things moving. "It doesn't feel like we've hit that point in Florida," Lavender tells me. "They haven't found the bottom." Parcl Labs, a real estate analytics firm, recently looked at the supply and demand dynamics in 42 metros around the country to deliver a "bullish" or "bearish" rating for each one — basically, whether they think prices will rise or fall over the next year. Miami and Jacksonville got positive ratings, but Orlando, Tampa, Lakeland, Deltona, North Port, and Cape Coral all got slapped with the bearish tag. The key in those places, Parcl's CEO, Trevor Bacon, tells me, is the number of homes sitting on the market. Homebuilders are an optimistic bunch by nature, but even the ones in Florida are now saying they expect to end the year down slightly on their prices. "For a builder to even report in a survey that they're going to be negative year over year on pricing is incredibly meaningful," Lavender says. During a call with analysts in late March, Jon Jaffe, the president and co-CEO of Lennar, one of the country's largest builders, said buyers in Florida and Texas generally needed more help than those in most other places around the country. Builders in the state are dropping prices, lending a hand on closing costs, and chipping in thousands of dollars to help buyers get lower mortgage rates, all in an effort to keep sales moving. Even then, Jaffe said, the company didn't see the typical pickup in nationwide sales that usually comes with the start of the spring selling season. I've found that real estate agents, like builders, tend to see the sunny side of things — after all, it's pretty much their job to preach the gospel of homeownership even when the market is less than accommodating. But when I talked to Laurie Rose, a real estate agent and longtime resident of Naples, in southwest Florida, she was clear-eyed about the challenges facing buyers in her chosen state. Rose and her husband moved down from New Jersey in 2003, mostly for the weather. For a while, it felt like the move was paying off: Gas was cheaper, and groceries didn't stretch their budget. The lack of a state income tax kept more dollars in their pockets. Now everything is more expensive, she says, including everyday items like food and clothing. On the plus side, home values are way up since she and her husband bought their place. But even if they sold, she says, there's no way she could buy back into the area in which she's now living. Rose still says Florida is a "great place to live," but the state's natural draws aren't always enough to keep people there. She tells me several of her friends have recently moved to Tennessee, Georgia, and the Carolinas in search of the cheaper living that Florida once promised. Sellers have been caught up in this thing of, 'I can put whatever price I want on my home, and someone's going to buy it. Now all of a sudden they're going: 'Oh, crap.' Rose's work as a real estate agent has also given her a front-row seat to the mounting challenges for both sellers and buyers in Florida. Buyers are leery of all the costs that come with homeownership — not just the higher mortgage rates and steep sticker prices that have eaten into affordability, but also the insurance premiums, property taxes, and HOA fees. With more homes sitting on the market and prices starting to drop from last year, there's no rush among buyers to get in on the action. Sellers, meanwhile, will have to come to grips with this new state of play if they want to get their properties sold. "Sellers have been caught up in this thing of, 'I can put whatever price I want on my home, and someone's going to buy it,'" Rose said, "Now all of a sudden they're going: 'Oh, crap. People aren't buying, and people aren't even looking.'" This isn't just a Florida story. Large-scale housing trends often obscure the quirks that make each local market unique, Jake Krimmel, a senior economist at tells me, but Florida offers a neat microcosm of the national numbers. Around the country, supply is back up to levels we haven't seen since the start of the pandemic, handing more power to buyers who now have the luxury of choice (provided they can afford it). Homes are sitting on the market longer, and sellers are coming around to the fact that they'll have to cut asking prices if they want to see some offers. The softness in Florida's market appears to be spreading to the rest of the Southeast and Southwest, where metros such as Phoenix, Denver, Atlanta, and Raleigh now show negative prices year over year in John Burns' data. "The Southeast and the Southwest aren't as weak as Texas and Florida right now, but they could very well be on their way there if supply continues to increase and buyer demand stays where it is," Lavender tells me. I want to be clear that the sky isn't falling here. The pandemic-era frenzy couldn't last forever, and a pullback in demand was to be expected given just how many people bought and sold homes before rates went up in 2022. If builders hadn't delivered all that supply to Florida over the past few years, the affordability picture there would be all the more dire. Just look at the Midwest and the Northeast, where fewer homes were built and the supply remains tight. They may not be seeing a drop in prices now, but that means buyers aren't getting any relief, either. Florida's growth during the pandemic was "unsustainable," Nelson Stabile, a principal and cofounder of the Miami-based development firm Integra Investments, tells me. But he's still a staunch believer in the state's future. "I think we're at a healthy pace now, and I think the whole country has woken up to the fact that Florida is not just a retirement destination," Stabile tells me. "It's a place where folks can raise their families, where they can have an incredible quality of life. Is it perfect? No. But is it better than most areas? Probably, yes." Keith Poliakoff, a real estate attorney in Florida, is similarly bullish on his state. But he also says other states should learn lessons from Florida's saga — to cut red tape that gets in the way of building affordable housing, as the state legislature recently did through the Live Local Act, and strengthen building codes to withstand climate disasters. "Florida generally hits the wave before the rest of the country," Poliakoff tells me. "It's a good indicator of what's to come."
Yahoo
19-03-2025
- Business
- Yahoo
Buc-ee's in Oak Creek moves ahead after council approves zoning changes
A proposed Buc-ee's gas station moved another step forward when the Oak Creek Common Council voted 5-1 twice Tuesday night to approve zoning changes that would allow it to be built in the city. In January, Buc-ee's, the mega-popular Texas-based gas station, proposed a 74,000-square-foot gas station and convenience store that would be open 24/7 and include about 120 fueling stations. It's proposed for a 29.6-acre site in the southwest quadrant of the Interstate 94/Elm Road interchange. The votes amend the city's 2020 Comprehensive Plan Land Use for three properties from Business Park to Commercial. They also rezone the properties — at 10700, 10820 and 10840 S. 27th St. — for retail use. Ald. Ken Gehl was the only alderperson to vote against the moves. The Oak Creek store could open in early 2027 and "is expected to be the first Buc-ee's to be built in the state," a statement from Buc-ee's said. It would likely attract around 100,000 visitors weekly and employ between 175 and 225 full-time workers. Wages start at $18 to $20 per hour. "We are excited at the possibility of being here," Stan Beard, Buc-ee's director of development and real estate, said at Tuesday's meeting. Beard described Buc-ee's as a "tourist destination" and "fun store" that attracts visitors from outside the area and state. "We are a big footprint. ...," he said. "We're the unique destination within whatever destination you're headed to. We want to be part of your road trip." Angela Janik, Buc-ee's project coordinator, described the convenience store as "the Disneyland of gas stations" in a presentation she gave at a Jan. 28 public meeting in Oak Creek. Janik added that Buc-ee's often partners with local vendors for products to sell in-store, including art, candles and honey ― as long as they can keep up with demand. Buc-ee's locations attract between 4,000 and 8,000 cars daily, bringing about 100,000 visitors each week. Janik said an estimated 90% of visitors to the Oak Creek location could come from outside Milwaukee County. Some Oak Creek residents are are concerned about Buc-ee's coming to town. A GoFundMe campaign by Oak Creek Neighbors United has raised over $2,800 to pay for "legal fees to help advocate for our community and environmental concerns." Oak Creek Neighbors United writes that the gas station will have "life long significant impacts to the health of the people and animals" that live near it. It argues that these effects could include disruptive 24-hour light pollution, waterway pollution from the fueling stations, lots of traffic and negative effects on people who live nearby. Multiple residents from Oak Creek's St. John's neighborhood ― which is near the proposed site ― spoke at Tuesday's meeting against the development. They shared similar worries to those in the GoFundMe, as well as concerns about how such a busy store would be policed, crime that it may attract, visitor traffic overwhelming subdivision streets, tax issues and effects on farm animals. One resident said the Buc-ee's plan would turn the farmland proposed for its use into an "impervious wasteland." She said the gas pumps and other development would hurt Lake Michigan and the Oak Creek watershed, which is "already highly urbanized." She argued Buc-ee's would increase pollution and hurt waterway wildlife already affected by the multiple nearby gas stations and 24-hour travel centers. Resident Robert Foster argued Buc-ee's 24-7 operation could hurt residents' quality of life. "There's nothing about a 24-hour, well-lit visitor center that screams quality of life to me or my wife," Foster said. An owner of A Storybook Farm said gasoline fumes could pose a hazard to the farm. He added that the 24-7 lights could harm horses' ability to grow their winter coats and cause health problems for chickens. "This is not going to work with us ...," he said. "Our horses don't vote, but we are here." According to a timeline provided by the Oak Creek Plan Commission, the commission now must review a certified survey map application to combine the three South 27th Street parcels. The commission also will review a Conditional Use Permit application for the operation of a "fueling plaza" at 27th Street and Elm Road. On April 22, the commission will provide a recommendation to the Common Council. On May 20, the Common Council will hold a public hearing to consider both applications and might vote on them at the meeting. On June 10, the Plan Commission will review the final site, landscaping, architectural and lighting plans for the construction of the building and build-out of the site. The Plan Commission might instead vote on the application at that meeting. This application type doesn't go before the Common Council. It's the final step in the review process and isn't a public hearing. In 2023, Buc-ee's said it planned to build a store in DeForest ― a village of about 10,000 in Dane County, north of Madison. Those plans were delayed over issues of paying for a $15 million I-39-90-94 interchange upgrade needed to prevent freeway traffic backups. Gov. Tony Evers' recently proposed 2025-27 state budget includes $6 million for the project, with Buc-ee's agreeing to pay $8.1 million. The remaining funds would be covered by a DeForest tax incremental financing district using property tax revenue generated by the Buc-ee's development. Journal Sentinel reporters Tom Daykin and Erik S. Hanley contributed to this report. More: What's next for Buc-ee's in Oak Creek? City provides a timeline for the project More: What's the big deal about Buc-ee's, the gas-station chain coming to Wisconsin? Let this native Texan tell you This article originally appeared on Milwaukee Journal Sentinel: Buc-ee's in Oak Creek moves ahead after zoning changes approved
Yahoo
06-02-2025
- Business
- Yahoo
What's next for Buc-ee's in Oak Creek? City provides a timeline for the project
The City of Oak Creek Plan Commission has released a timeline on next steps for the city's future Buc-ee's location. The proposed 74,000-square-foot store is planned to be the popular Texas-based convenience store and gas station brand's first Wisconsin location. The 24/7 Oak Creek store will be located at the intersection of South 27th Street and West Elm Road on a 29.6-acre site at 10700, 10820 and 10840 S. 27th St. The Plan Commission held its first public meeting addressing Buc-ee's on Jan. 28, passing resolutions to change the proposed location from a business park to commercial use in the city's comprehensive plan and rezoning it from mostly agricultural zoning to the B-6 Interchange Regional Retail District. Here's what's next for Buc-ee's in Oak Creek: Here are the next steps for Buc-ee's in Oak Creek, according to the Plan Commission's timeline: Tuesday, March 18: The Oak Creek Common Council will hold a public hearing to consider the Comprehensive Plan Land Use Category and rezoning application passed at the Jan. 28 public meeting. The Common Council may vote on the resolutions at the meeting. Tuesday, April 22 (anticipated): The Plan Commission will review a Certified Survey Map (CSM) application to combine the three parcels at 10700, 10820 and 10840 S. 27th St. The commission will also review a Conditional Use Permit application for the operation of a "fueling plaza" at 27th Street and Elm Road. The commission will provide a recommendation to the Common Council. Tuesday, May 20 (anticipated): The Common Council will hold a public hearing to consider the CSM and Conditional Use Permit applications. The Common Council may vote on them at the meeting. Tuesday, June 10 (anticipated): The Plan Commission will review the final site, landscaping, architectural and lighting plans for the construction of the building and build-out of the site. The Plan Commission may vote on the application at the meeting. This application type doesn't go before the Common Council. It's the final step in the review process and isn't a public hearing. An earlier statement from Buc-ee's said the Oak Creek store could open in early 2027. The 74,000-square-foot Oak Creek convenience store would be open 24/7. It will have 60 kiosks with a gas pump on each side for a total of 120 fueling stations. Angela Janik, project coordinator for Buc-ee's, described the convenience store as "the Disneyland of gas stations" in a presentation she gave at the Jan. 28 public meeting. Janik said it will employ between 175 and 225 full-time workers. Wages start at $18 to $20 per hour. Janik added that Buc-ee's often partners with local vendors for products to sell in-store, including art, candles and honey ― as long as they can keep up with demand. Buc-ee's locations attract between 4,000 and 8,000 cars daily, bringing about 100,000 visitors each week. Janik said an estimated 90% of visitors to the Oak Creek location could come from outside Milwaukee County. In 2023, Buc-ee's said it planned to build a store in DeForest ― a village of about 10,000 in Dane County, north of Madison. Plans for this location have experienced repeated delays, but DeForest Village Administrator Bill Chang recently told the Journal Sentinel they're "moving forward," just at a slower pace than initially anticipated. He added in late January that the Oak Creek project should have no impact on the potential DeForest project. The proposed DeForest location would also be 74,000 square feet. It would be located off Interstate 39/90/94, near the County V interchange. Plans include 120 gas pumps and 20 electric vehicle charging stations. Before plans can move ahead, the Village of DeForest needs to secure about $7 million in funding Buc-ee's has requested for a nearby interchange upgrade. Chang previously called this a "challenging number" but said the village plans to work with state and local elected officials to propose state legislation that would help cover the cost. Both proposed Wisconsin stores could rival the biggest Buc-ee's store in Luling, Texas, which is 75,000 square feet and opened last summer. More: Buc-ee's in Wisconsin: Where and when will it open? Where's the closest Buc-ee's now? More: What's the big deal about Buc-ee's, the gas-station chain coming to Wisconsin? Let this native Texan tell you This article originally appeared on Milwaukee Journal Sentinel: Buc-ee's in Oak Creek, Wisconsin: Here's an update on what's next
