Florida’s influx of rich residents is killing the middle class and housing market

For decades, the Sunshine State has been seen as, well, sunny and bright. Florida has no income tax, and many metros had a cost of living that allowed for the working class, like teachers, nurses, and hospitality workers, to build a comfortable, middle-class lifestyle.

Recommended Video

But times are changing.

The pandemic ushered in a massive wave of wealthy transplants, forcing home prices higher and making the Sunshine State one of the biggest losers in today’s housing market.

Florida gained more wealth from high-earning transplants than any other state in 2023, according to Internal Revenue Service data. The Sunshine State gained $20.65 billion in annual adjusted gross income from tax filers who moved there from another U.S. state, a Realtor.com analysis published March 27 shows. The average income of people who moved to Florida from another state was $122,530, the highest among all U.S. states, according to Gay Cororaton, chief economist for the Miami Realtors.

“This wealth migration has been the primary factor driving up prices, with prices continuing to climb due to strong demand, even when mortgage rates started to hit over 5% in 2022 and as rates have remained elevated to over 6.5% to date,” Cororaton told Fortune.

So as wealth comes in, other income groups are getting pushed out. Now the people who staff the restaurants, hospitals, and classrooms are leaving, and the middle class is dissolving.

“What we’re seeing isn’t just a housing shift: It’s a reshaping of who can realistically afford to live in these markets,” Tara Benson, a Douglas Elliman real estate agent who works both in Florida and New York City, told Fortune. “When buyers coming in have significantly more purchasing power than local residents, it doesn’t just push prices up. It pushes entire income groups out.”

A $137 billion flood of wealth

Between 2019 and 2023, Florida absorbed a net $137 billion in income from other states, according to Miami Realtors’ analysis of IRS migration data. Over the same period, California lost $91 billion, and New York lost $76 billion. Many of those wealthy transplants chased a limited supply of Florida homes, ultimately driving up home prices—and making affordability more challenging for other income groups.

In Miami-Dade, the median annual single-family prices spiked 10.1% in 2020, surged 23% in 2021—an all-time high pace—and rose another 11.1% in 2022, Cororaton said. Meanwhile, the share of million-dollar homes in Miami-Dade surged from 8% in 2019 to 28% in Q1 2026. In Palm Beach County, nearly one-third of homes are valued at least $1 million, according to data from Cororaton.

“Low rates lit the match, tight supply fed it, investors added heat, and wealthy newcomers poured gasoline on it,” Arman Javaherian, CEO of the homebuying platform Homa and a former Zillow executive, told Fortune.

Cash is still king—and locals can’t compete

Another factor middle-income Floridians can’t compete with is cash.

About 39% of Miami home purchases and 48% of West Palm Beach purchases were all-cash in recent years, Javaherian said. And for luxury homes, the shares are even higher: 82% of Miami condo sales above $1 million in 2025, Cororaton added.

“Many buyers here are operating on liquidity, not debt,” she said.

That type of competition is a huge handicap for local, financed buyers. Michael Merrill, who leads The Exclusive Group at Douglas Elliman across Miami Beach, Palm Beach, Boca Raton, and Vero Beach, said cash offers now routinely close deals at just a 5% to 10% premium over financed bids.

“The certainty of a clean, fast deal often wins over financed offers,” Merrill said. “That dynamic continues to put local buyers at a disadvantage.”

To be sure, all-cash offers aren’t just coming from out-of-state buyers. David Druey, Florida regional president at Centennial Bank, told Fortune some are coming from within.

“There are plenty of in-state Florida buyers making cash offers as well,” he said. This includes existing homeowners trading up on appreciated equity, which compounds the pressure on first-time and middle-income buyers.

Cost burdens for the middle class

Housing economists typically flag a household as “cost-burdened” or “house poor” when shelter costs exceed 30% of income. Florida has blown past that threshold.

Statewide, the median single-family home price is roughly $420,000, according to Florida Realtors, and the median household income is about $77,000, Census data shows. That means the price-to-income ratio is over 5.4.

“Above 5x price-to-income, strain becomes obvious,” Javaherian said.

And on top of high home prices and wages that don’t match, insurance is a massive obstacle for Florida residents. The state’s average annual home insurance premium is $8,292, or 181% above the national average, according to Insurify. Once premiums consume 5% or more of household income, “buyers start walking away,” Javaherian said.

Druey, whose bank finances Florida homes every day, said the in