The Sunshine State has been suffering from severe economic challenges due to rising housing costs as a result of population growth. This growth can be attributed to domestic migration in the state due to the lack of an income tax.
Economist Amanda Philiin said Miami has been receiving high real estate demands from wealthy individuals who wish to have a home. Additionally, some homeowners have transformed their homes into airbnbs and prohibit renting – causing a shortage of rental units.
According to data gathered by Consumer Price Index, two areas from Florida are second and third respectively on the US metro inflation hotspot. Other metros listed were way lower and doing much better as theirs continued to lower for the next months.
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Problems and Similar Instances
However, Miami, Fort Lauderdale, and West Palm Beach continue to drastically suffer. Meanwhile, Tampa and St. Petersburg has seen some small progress, but still continues to be affected by the inflation as well.
This growing issue only continues to worsen in the Miami and Tampa Bay areas. They’ve previously seen how metro areas have been affected by inflation, namely Atlanta, which was originally America’s inflation hotspot.
Similarly, it was also due to domestic migration due to how expensive the coastal cities are. Economic Professor Kaiji Chen noted how low transportation costs have helped Atlanta to become steadily balanced.
He examined data that shows how an increase in housing inventory helped to leverage the issue and even saw a decline in migration – because of this the number of sales have significantly lowered in the area.
It’s no surprise that states continue to suffer from inflation following what happened in the country during the pandemic, financial instability and other problems brought by the pandemic continue to challenge the states.
It doesn’t help that the economic landscape was severely altered following the pandemic.
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Source: CNN
