Florida has also enjoyed exceptionally strong job growth throughout recent years. The Sunshine State led the nation in payroll employment growth in both 2003 and 2004. Payroll employment has surged 3.0 percent over the past year, generating a net gain of 224,000 jobs. Not only has job growth been solid but it has also been extraordinarily broad based. Virtually every major industry has increased hiring and employment is up solidly across all twenty Florida metropolitan areas. Stronger job growth has led to healthy income gains, with personal income climbing 8.4% during the past year, or one and half percentage points faster than the nation. The state's unemployment rate has fallen nearly a full percentage point over the past year and is currently 0.9 percentage points below the national rate at just 3.8 percent.
With job and income growth handily outpacing the rest of the country, Florida has tended to pull job seekers in from other states. Population growth has soared in recent years. The Sunshine State has added 1.35 million residents over the past four years, including 400,000 new residents in 2004 alone. The bulk of Florida's population gain comes from net in-migration, which accounts for 87 percent of the state's annual population increase. Most of these new residents are prime working-age adults, who are relocating to take advantage of the state's favorable employment conditions. Population growth should remain strong through the end of the decade, with gains averaging around 370,000 new residents per year.
Demographics are boosting demand for homes in other ways as well. The aging of the Baby Boom generation, those born between 1945 and 1965, has led to an increase in retirees, second home purchases and homeownership in general. The first two of these variables are pretty straightforward, the third requires a bit of explanation. Florida has long been known as a retirement haven. Persons aged 65 and over currently account for 17.7 percent of Florida's population, compared to just 12.4 percent of the nation. The 65 and over age cohort is expected to account for 18.3 percent of the state's population gain through the rest of the decade and a whopping 39.8 percent of Florida's population growth in the next twenty years.
Homeownership among persons aged 65 and over is fairly high, with 83.2 percent of households being homeowners. The high rate of homeownership among retirees is one reason why Florida's overall homeownership rate, which is currently pegged at 73.8 percent, is so much higher than the nation's. With the retiree population expected to account for a larger proportion of the state's growth during the next quarter century, overall homeownership can be expected to rise even further.
The aging of the baby boom generation is also helping boost ownership of second homes. The vast majority of Baby Boomers are now over 45 years old, and in their peak earning years. This is also the prime age cohort for second home ownership. The National Association of Realtors recently found that the median age for vacation-home buyers was 55 and that the median age for investment-property buyers was age 47. With the pool of potential buyers increasing, second home sales have taken off.
A full 36 percent of overall existing home sales in 2004 were for second homes, with nearly two-thirds of that total being for investment purposes and the remainder for vacation homes. The bulk of homes bought for investment purposes are being rented, while the overwhelming majority of homes bought for vacation purposes are not for rent. While sales of investment properties account for the bulk of second home purchases, sales of vacation homes are rising much faster.
Florida is one of the largest second home markets in the nation, with an estimated 700,000 temporary residents over age 55 spending 30 consecutive days or more there each year. 5 The overwhelming majority of these Snowbirds occupy their Florida residences for around three months a year and may also visit from time to time throughout the year. Relatively few Snowbirds rent their properties. With more boomers nearing retirement age the number of part-time residents is likely to continue to increase.
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