Being unmployed, I took some time to visit my grandmoter in Florida. While there, I had a lot of time to observe and think about the state of things in the sunshine state. I came to a realization that things are probably going to get very bad down there in the coming years.
Let’s think about stereotypes of Florida: immigrants from the carribbean, senior citizens from the Northeast, Disney, and a few major universities. Sure, plenty of people down there don’t fall into those categories, but the stereotype is predominantly true. That truth has some very large economic consequences.
The generally bad economy made the real esate problem of Florida painfully obvious. You’ve got lots of cheap land. Builders bought this cheap land and constructed housing developments for seniors to live in. Seniors came from the North to fill them up. Demand was up, prices were up, times were good.
As time went on, the developments got old. The builders bought some more cheap land, and built newer and fancier housing developments. People kept retiring and moving down South. Newer developments had higher prices than older ones, but they all kept filling up. The lower prices of the older developments actually made it possible for less wealthy people to retire in the sun. They kept making newer, bigger, better developments and filling them up at high prices.
There’s also decreasing demand for houses in Florida. People are retiring later in life, and Florida is not as popular a retiring destination as it once was. Arizona, Texas, and other places are increasingly more popular than Florida. This decreased demand combined with the bad economy is dropping housing prices across the board. The people that do move to Florida can live in the newest and nicest houses at very reasonable prices. The older developments remain empty, and become more empty as people pass away. If you already own a place in an older development, good luck selling it.
On top of all those real estate troubles, you’ve got some more cascasing consequences. If you drive around town near those senior developments, you will notice that most of the economy revolves around supporting those senior citizens. Pharmacies, doctor’s offices, and restaurants with early bird specials stretch as far as the eye can see. You should see the size of the Social Security Administration office down there.
With fewer seniors moving there, and the existing ones dying off, these other business will be in big trouble. The influx of money from the North will dry up, and the working people in Florida will have to move elsewhere to find jobs.
At least in other parts of Florida, there is an influx of money from tourism. Especially Disney, but other things like Daytona, cruise ships, the keys, etc. bring a lot of money into the state. Even before the economy went down, popularity of amusement parks was going downhill. With the Internet, people are entertaining themselves more and more at home. Disney is giving away free hotel stays because attendance is down so much.
Tourism going down, fewer retirees from the North, real estate drying up, how is money going to go into the state of Florida? Kids going to the big universities, and selling oranges. Florida still has those two ways to make money.
As long as people are drinking Tropicana in the morning, and watching college football, Florida will have something to go on. Even so, the situation in parts where the population is primarily seniors does not have a very good outlook. I fully expect in my lifetime to see urban explorers posting photos and videos of entire towns full of abandoned housing developments. Maybe they’ll be able to start up a new economy using them as airsoft and paintball arenas.
Scott, it’s funny you say that. I visited Florida just two weeks ago (to visit my grandparents, of course) and noticed much of the same things you mentioned here. My grandparents want to sell their home they’ve had for 7 years now to move into a newer, more fitting development that has better golfing and is better for retired seniors. Another business that appeared to be flourishing was the pawn shop business – they were all over the place, and they all appeared to be doing well (though I was just driving by – what do I know?).