Will Brandon Johnson be Florida Realtor of the Year 2023?

It is impossible to walk a dog anywhere in Florida without running into neighbors who work in the real estate industry. Progressive victories yesterday in Chicago and Wisconsin were being celebrated down here. High hopes in particular are pinned on Brandon Johnson to take the title of Florida Realtor of the Year previously held by Andrew Cuomo.

The Democrat-governed state of Wisconsin isn’t as wealthy as Chicago, but it was a positive sign that a person whom the New York Times calls a “liberal judge” won by 55:45 (see “Liberal Wins Wisconsin Court Race, in Victory for Abortion Rights Backers”). (Separately, it is interesting that laws and the state constitution will have 180-degree different interpretations depending on the personal politics of the judge!)

The more extreme the politics in the states that send wealthy homebuyers to Florida, the better. If state and local governments are expanded in Illinois and Wisconsin and someone with money doesn’t agree with the new goals, that’s a big nudge toward moving. Chicago is home to nearly 200,000 millionaires (was 160,000 in 2022, but inflation should have lifted quite a few more folks into this category). If Brandon’s proposed new taxes motivate just ten percent of them to move to Florida, that’s 20,000 at least moderately nice homes that can be sold.

What’s the scale of real estate development in Florida? A whole new town, essentially, is being built on what was scrub land 30 minutes south of us: Avenir (houses from $700,000 to “over $3 million”); a similar idea is going on 30-miles inland from Fort Myers at Babcock Ranch.

As noted in yesterday’s post, in our neighborhood, the real estate bubble party ended with the interest rate boosts of summer 2022. Everything sat on the market for months maybe because nobody could figure out what houses were worth in the new non-zero-interest-rate environment. But just within the past month or so the market seems to be clearing. People agree that houses are worth, in nominal and continuously eroding dollars, between 80 and 100 percent of the peak 2022 numbers (i.e., everything has at least gone down a little via inflation).

Let’s hope that Brandon can follow through on his promise to make Chicago’s wealthy pay their fair share! He’s got at least $750 million in tax increases planned; the same article notes “34% of Chicagoans would leave the city if given the opportunity” and also highlights his work with teachers:

Johnson is a Cook County Board commissioner and earned over $390,ooo in five years as the Chicago Teachers Union legislative coordinator. He helped organize three teachers strikes in the city and has pushed the Red for Ed agenda intended to spread the Socialist doctrine among teachers.

He has received nearly $3.2 million in contributions from CTU and its affiliates, and the CTU just voted to take $8 per month from each member’s dues to back Johnson.

From a Florida perspective, the big dream would be a school closure or mask order from the new mayor. Here’s a February 2022 article about continued forced masking in Chicago schools:

Maybe it’s a good time to thank Lori Lightfoot for everything that she did for Florida?

9 thoughts on “Will Brandon Johnson be Florida Realtor of the Year 2023?

  1. The last month was the return of quantitative easing. The government has given no guidance on whether it’s staying or if it’s a temporary rise to monetize some bank loans. A big uptick in money printing would come from a return to offices. As long as rich people are working from anywhere, their salaries are counted in the city wide average.

  2. Is it really fair to claim “Democrat-governed state of Wisconsin” given that the Wisconsin state legislature is about 2:1 in favor of Republicans?

  3. I assume the folks moving to Florida are all busily working against climate change, to avoid seeing their new investment(s) become fish breeding facilities (Florida will see quite a lot of land go underwater).

    Or do they believe a federally funded insurance scheme will save the day?

    • Federico: It would be consistent with the current U.S. political system if the working class could fund the rebuilding of Signature Bank executives’ Florida beachfront houses, just as they funded the initial purchase (see https://www.wsj.com/articles/signature-bank-insiders-sold-100-million-in-stock-during-crypto-surge-a9f77615 and, for Barney Frank’s personal involvement, https://www.ft.com/content/090e081f-35b3-484b-8095-c42a3c5e4259 ) and paid for part of the new electric car in the driveway. However, that is not how things are set up currently. The FEMA flood insurance policy limit is $250,000. For those without insurance, if a disaster has been declared, FEMA may pay up to about $80,000 total (see https://theconversation.com/recovery-from-a-disaster-like-hurricane-ian-takes-years-and-nonprofits-play-many-pivotal-roles-before-and-after-fema-aid-runs-out-191725 ).

      Compare the above numbers to the $110 million cost of a teardown on the water (see https://nypost.com/2022/10/26/william-lauder-demolished-his-110m-palm-beach-mansion/ ) or the $5-$37 million cost of apartments recently sold in Miami Beach (https://www.miamicondoinvestments.com/search-community/miami-beach-condos-closed-sales-12-months ).

      Democrats in DC and NY love to talk about Florida going underwater, but they don’t seem aware that Orlando is 100′ above sea level. The DCA airport is 14′ above sea level. JFK is 13′ above sea level.

      We could assume that the market is wrong in valuing a vacant lot in Palm Beach (a vulnerable barrier island) at $50+ million. After all, Science knows more than all of the world’s real estate buyers collectively. But it could also be the case that Florida’s 100-year process of being torn down and rebuilt renders the state less vulnerable economically to sea level rise. Our neighborhood is 20 years old and people have been ripping out all of the flooring and drywall back to the metal studs and concrete blocks. Was there a flood? No. People just decided that the houses were old and it was time for a $1 million refresh. Someone from the Northeast might look at a $20 million beachfront construction project and assume that the owner was planning on a permanent monument. But the Floridians looking at it would already envision the $40 million (in 2023 dollars) teardown and rebuild likely to happen in 2040. When land is valuable you don’t want to ruin it by parking a house more than 20 years old on that land.

    • Phil, I was under the impression that the years leading to 2008 show unequivocally that 0 rationality and foresight go into real estate market.

    • @Federico, also note that Democrats are worried about all bad things in Republican states, but yet have nothing to say about what’s wrong with their own state. For example, in Democratic states, there is far more gun killing, far more infrastructure issues, far more poverty, and far fewer students graduating high school, to name some. And yet what our leaders are worried about? Cities going underwater!

    • Federico: I don’t think the real estate market was irrational from the mid-1990s through 2007. Participants rationally responded to the incentives that they got from the banks, bond buyers, the federal government, and the government-affiliated Fannie Mae, et al.

      I actually think that Floridians are more rational than folks in New England. Building a pimped-out house is considered consumption here, not investment. If someone were to say, Maskachusetts-style, “you’ll never get back what you’re putting into it” (regarding a renovation), the Floridian would respond “Who cares? I want it.”

    • It’s hard to take sea level rise seriously when Obama, by all accounts a well-educated and extremely well-informed person, bought a house on Martha’s Vineyard worth well over 10 million pre-pandemic dollars. I suppose with the income he can garner, he could afford to take a total loss on it, but I can’t help but think he knows something we don’t.

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