Vero Beach's Housing Landscape is About to Change Forever

Vero Beach is housing landscape is about to change forever. For decades, the rhythm of Vero Beach's barrier island was snowbirds would come down from parts elsewhere, primarily the northeast, to get away from old man winter. And the barrier island was the only place anybody discernment would consider living. Well, guess what? If you think you know Vero, you're wrong because the rhythm has changed. And we're going to break it down so you understand how Vero is not like that you may have thought you knew. I'm Sally Daley from the Daley Group at Douglas Elliman.

Let's break it down. The pattern was always the same. Flights, car carriers, Boston, Connecticut, New Jersey, the northeast would come down like clockwork. You could set your watch to it. Places like John's Island, Old Riomar, the Moorings, the barrier island still are immensely popular. Please don't misunderstand me. But there's been big changes to buyers coming in. Two things have changed. Number one, more people are here full-time than used to be. Somewhere around COVID, it started to shift. After COVID, neighborhoods that back in the day if you had said, "Sally, how many people are here full-time?

How many people take off in the summer?" Let's say that would have been say 60/40. 60 leave, 40 stay. Now those same neighborhoods are largely inverted. More people are here full-time. Well, why is that? It's a number of things. It's saying, "I'm going to simplify my life." It's saying, "Vero Beach has more offerings in the summertime. It's not as sleepy as it used to be." Which is absolutely true. But it's also part of simplifying and people saying, "I don't know if I necessarily want to keep more than one house." That doesn't mean everybody still stays.

A lot of people get out of dodge and say August and September when it's steamy here. And maybe they go up to cashiers, or the Highlands or North Carolina, wherever. The second thing is, more buyers are willing to say, "I don't know if I want to or can pay the premium that it takes to be on the barrier island." As we've discussed many times, Indian River County in 1977 instituted height restrictions, density mandate with a master plan out to '66 to preserve agriculture and citrus. That means condos are low story.

So, it's really kept sprawl at bay with controlled and slow and smart growth. Our trees are protected, our live oaks are mangroves are protected. It's all there. So, it's all still there. The question is, why would somebody say then, "Okay, maybe I don't want to be on the barrier island." Part of it is inflation. After COVID, there was more demand than there was supply because we've got limited housing stock, right? So, more demand put pressure up on prices. Our prices are up like a lot of places after COVID, 49, 55% more than they were.

That's created friction where some clients are saying, "You know, the beaches are free, it's low density, it's not a six-lane highway. I don't know if I want to pay the premium to be on the barrier island and or the cost of living that it's going to cost." By that, I mean cost of insurance. A lot of the housing stock tends to be older. Even if it's renovated, the original dates are from the '80s and '90s. So, gone is the day where a buyer assumes they must be on the barrier island to enjoy the Vero Beach lifestyle.

Beaches are free, the river access is free. There's clubs that you can join without a real estate requirement like the Moorings, Vero Beach Country Club, Quail Valley, albeit many of them have waitlists. So, the lifestyle that you cobble together doesn't have to be on the barrier island. So, discerning buyers in some instances are saying, "I still love the barrier island. I want to be on it. That's it for me." Others are saying, "Maybe I want to be just off the barrier island." And by that, I mean along this corridor known as Northern Indian River Boulevard, where there's Grand Harbor, there's Riverwind, there's Lilly's Cay, there's LuKair Point, there's Bridge Point, up the causeway another 5 minutes, you've got the Lakes at Waterway, and Tillie's, Bent Pine has some lovely options.

They're all within a 5-to-10-minute drive to be on the bridge to get to the barrier island. So, time, inflation, and a broadening of opening up possibilities and being more open to options is making buyers think, "Maybe I don't have to be on the barrier island. Let's at least explore it to see if that's where I want to be." And that's a seismic change for Vero Beach, as much as more people being here full-time. Let's talk about cost of ownership and taxes. There is no doubt about it, we see the effects of different philosophies towards taxation on Florida.

The Wall Street Journal reported recently an interesting study provided by the IRS, reporting the domiciles where people are filing their taxes from. Not the U-Haul where the U-Hauls are coming from, because that could just be a summer house. Where are you filing? What city and what state are you filing from? Increasingly, it's a tax strategy to come and establish domicile residency in the state of Florida. What's happening is proposals for millionaires tax, such as that potentially going to be on the docket in California, where there's taxation even on unrealized capital gains.

The other states are following that very closely and saying, "If it works there, I believe I think I'm correct that Minnesota has a very similar policy. They're contemplating, other states are following suit. These are all policies that cause reactions, and we expect Florida to be the beneficiary as places like Texas maybe, too. So, as those kinds of tax policies potentially come to fruition, Florida's the beneficiary with more folks coming to town. We should have more expensive prices cuz we have less supply than other parts of Florida. Yet, we are still about 40% more affordable than very desirable places like Jupiter, Juno, Fort Lauderdale, Miami, Palm Beach.

Another important shift for you to understand in terms of demand, which is a direct component of pricing, right? The more demand there is, the more it affects pricing. Owners in places like Boca Raton, Fort Lauderdale, Delray Beach, Naples used to be places where owners were happily ensconced there, and we didn't see relocating buyers out of there. Increasingly, we're starting to see buyers from those municipalities say, "We love it, but maybe it's time to sell and go north for a variety of reasons." One is leverage, where your value is. Some people say it's now too crowded.

There's a host of reasons. So, that's a very big change for you to understand as well. So, the mainland is really having its own identity. Yes, everybody loves the beach, but because we have fixed bridges, we don't have high density. Easy to get to our beaches. It's easy to put in a paddle board on the Indian River Estuary without a fee. Everything's free of charge. So, if you're contemplating, "Do I want the barrier island, or do I want the mainland?" A couple of things in that calculus I would urge you to consider.

Number one, how do you live? This is probably the most important question. If you are a beach fanatic, and you want to be able to walk to the beach, hard stop. If that is your non-negotiable, you need to be at the barrier island. Otherwise, you're going to have to get into a vehicle and come across the bridge. Free or not, it's going to be a requirement. Conversely, if that's not important to you or you say, "Sally, I'm okay driving to a beach as long as it's free of charge. I don't care.

I'd rather have a newer house or a more affordable cost of ownership, a lower insurance bill, or maybe I'm a little nervous about hurricanes." Or if you say, "I want more land. Maybe you want a five-acre gentleman's ranch or maybe you want in one of our older vintage communities that's going through a huge renaissance like McAnsh Park or Vero Beach Country Club where the lots are bigger, the houses are interesting and unusual, and there's a real vibe there." So, it depends where your priorities are. So, it's cost of ownership, how do you like to live, and how important is walkability to the beach.

Those are very easy questions to drill down very quickly. If you have the ability to be a little more elastic on your pricing, take a look at different price points and say, "Does the step up, is that extra money worth it to me or not?" Only you can decide. So, the mainland is developing its own persona. We've talked before about the project known as the three corners that's happening just off 17th Bridge, our middle bridge, where the old power plant is happening. And there's going to be a mashup, probably will end up something like a marina, a park, some outside dining, maybe a boutique hotel.

It's being sussed out now. That's going to have its own persona. Miracle Mile where there's shops and services, Royal Palm Point has its own persona. Let's not forget the 14th Avenue area, aka Main Street as we would have called it back in the day, is fabulous. It has evolved into outside shopping, arts gallery, arts district, niche retail. It too has its own vibe that's super interesting. So, it's not a one or either, they all have distinctive personalities. Which one speaks more to you? Because you can interact with all of them, no matter where you live.

The question is, what's important to you and how you like to live with your priorities. So, if that's the lay of the land, Sally, where is the market? A couple of things that are important for you to understand. A material change. I cannot emphasize this strongly enough. Buyers, and sellers too, but buyers, I'm speaking to you right now. Don't assume you know the lay of the land, and for goodness sake, please don't listen to doomers on Twitter that don't know our market. Wherever you're looking, whether it's Vero Beach or Timbuktu, please talk to somebody embedded in that market cuz it's hyper local.

And in Vero, it's even hyper hyper local in terms of mainland, island, waterfront, dry lots, the whole shooting match. Broadly, buyers, as of about January 3rd, the faucet the fire hose is full bore. Holy cow, has it been busy. A couple of years after COVID, the market was a little muted in terms of buyer demand. You guys were on the sidelines going, "What's going to happen? Is the market going to crash or prices going to collapse?" Well, some parts of Florida have seen prices softening 10 15%. Vero, as we talked about, has that foundation underneath it to support value of low density and limited supply.

So, guess what happened? Not much. We peeled back maybe 5 or 6% depending on where you are, but all last year broadly was what I would call stabilization, where prices didn't really collapse. So, we had a couple years of not much buyer demand, prices stabilizing, buyers watching and wishing and hoping that things would collapse and they did not. Then, sprinkle on top two things. Number one, the worst winter any of us have had in a long time, including us. We got like 4 days of cold weather, everybody was freaking out.

We're fine with hurricanes, but give us 4 days of cold weather, everybody was freaking out. That combined with it's a little easier to get to Vero. What do I mean by that? Thanks to increased traffic at our diminutive tiny little airport, which is never going to get big. We don't have the land or the interest in it from Boston and JFK. Breeze, yay Breeze, they started the whole thing. Providence, Newburgh, MacArthur, all these feeder markets. So, it's a little easier to get to Vero. So, the market has dramatically changed. We are not in the market that we were last fall for those of you that thought you could come in and get 20% off properties.

Not happening. So, this is not the market of last year. It's a new market and a lot of our good housing stock has been gobbled up. Sellers, this is my advice. Whether you are on the mainland or on the barrier island, please, please, please, do not price your house to be in housing purgatory. What do I mean by that? If you're not priced correctly and days on market continues to accrue, you are going to be penalized and you will pay so much more in the long run than if you had come out of the box priced correctly.

Housing purgatory means you are not priced comported with your condition, your location, whatever your overall value prop is. Keep in mind, buyers still want move-in ready. And that means roof done. They don't want your credit for your roof. They want the roof to be done. If you expect the buyer to take on a $60,000 or a $100,000 roof, that decision is going to cost you a hundred twenty to two hundred thousand dollars and what you're going to sell for because you'll have less buyers looking at you, you're going to languish on the market and you're going to end up having less power at the closing table in a negotiation.

Please don't price your house to be in purgatory and if it's not selling, the market is talking and listen to the market. So if you're a buyer, understand the dynamics have really changed and just because it's been on the market for a minute last fall, this spring is entirely different and there could be multiple people and things are selling. So understand what's important to you and be flexible in what you're going for if price is the most important equation to you. As you're trying to figure out where you fit in in this shift before it becomes obvious to everybody and what should your strategy be?

Seller or buyer? Call me, text me, write to me through our contact form and we can figure it out together. Strategy matters and so does who you work with. It really depends and makes an enormous difference on the getting you the outcome that you want. So to recap, Vero Beach is no longer a sleepy little seasonal town only, more people are here full time and that could be you. Number two, more discerning buyers are saying let's at least explore going off the barrier island and in fact going off the barrier island and doing so quite happily and can do so thanks because of low density, low profile zoning and if you want a country club lifestyle, we have plenty of clubs that are available where you don't have to reside inside of them.

So depending on where your priorities are, increasingly you may spend here longer than you thought, maybe even full time and you may end up living not on the barrier island. So that's the update on the dynamic of Vero Beach. Until next time, take care.