Insurance-scarred Florida emigres stream to Atlanta

Insurance-scarred Florida emigres stream to Atlanta
Wave of transplants affects new architecture, real estate marketing campaigns, schools

The Atlanta Journal-Constitution
Published on: 06/23/07
When Warren Lambert’s insurance company canceled his homeowner’s policy, it was the last straw.

Even though he had never filed a claim despite a punishing year of hurricanes in 2004 and had absorbed a 40 percent rise in his insurance premium, Lambert was among thousands of Florida homeowners left in the lurch by retreating insurers.

For the short term, Lambert bought a policy that added yet another $600 a year to his payments. Then, he came house hunting in Atlanta, where he had lived in the 1990s.

Pleased by the growing urban sophistication of the intown areas, he settled into a Peachtree Street loft.

Lambert, 44, is among a wave of transplants migrating to metro Atlanta from coastal communities, driven by soaring insurance premiums, devastating weather and a volatile real estate market that has priced much coastal housing beyond the reach of average workers.

Leslie Johnson, vice president for business development at Coldwell Banker The Condo Store, said recent research about the Midtown market shows that 33 percent of all the buyers there over age 55 are moving from Florida.

“I think there will be more when those people in Florida can sell their houses,” Johnson said.

Lambert confirms that a number of his Florida friends have shopped for homes and jobs in Atlanta while waiting for a buyer.

Johnson even notes that the numbers of homebuyers coming from Florida are having an effect on the architecture of new construction and the style of real estate marketing campaigns.

At Aqua in Midtown, for example, developer Scott Leventhal acknowledges drawing inspiration from the design of condo towers in Miami.

And the Related Group, Miami’s signature residential developer, is currently in its design phase for CityPlace Buckhead near Lenox Square, its first Atlanta project.

This geographic shift is not just being felt inside the city. In fact, every part of metro Atlanta is absorbing a notable share of coastal transplants.

Gainesville real estate broker and analyst Frank Norton Jr. said his data is showing that former Floridians comprise the largest identifiable group of regional transplants now buying homes in north Georgia.

“About a quarter of people relocating here are from Florida,” Norton said. “It’s our largest source of relocation.”

Expanding problem

Georgia State University insurance professor Martin Grace said the uptick in severe hurricane activity in recent years has produced widespread insurance-company re-evaluation of risk levels and loss protection throughout East Coast and Gulf of Mexico communities.

“This is having the greatest effect in Florida because that is where most hurricanes hit, where they do the most damage,” Grace said.

But the effect of increased hurricane activity is being felt all over the East Coast, said David Colmans, executive director of the Georgia Insurance Information Service.

“People who want to live in paradise have to realize there’s a cost to that,” Colmans said. “Now, all of a sudden, people in the Northeast are realizing they are vulnerable as well.”

With insurance companies withdrawing from the Florida market and the remaining companies raising rates to shocking levels, Florida legislators attempted to provide government relief for strapped homeowners, only to discover the loss estimates driving insurance company premiums were accurately calculated, according to Grace. An attempt earlier this year by the Florida Legislature to stem the rising tide of premiums did little to reduce rates.

“The insurance industry wasn’t pulling a fast one,” Grace said. “It really was expensive.”

Simple math

For a growing enclave of Florida transplants in Henry County, those costs combined with a growing market of attractive salaries made moving to metro Atlanta a no-brainer.

Miami teacher Nannette Bradley, 34, said the annual $3,000 insurance cost for her three-bedroom, two-bath townhouse was straining her public-servant salary to the breaking point.

“The bills were piling on,” Bradley said. “You couldn’t see the end to anything.”

In January, she visited friends already living in the Hampton area and found a lot to love about the area, including higher teacher salaries. With a job secured in the Henry County schools, she will close on a new home this month for herself and her 8-year-old son. The new five-bedroom, four-bath house in a Hampton subdivision was the same price as her Miami townhome.

“In Miami, that house would have been at least $600, 000,” Bradley said.

Terrilyn Jones, also a teacher in Henry County, moved into her Liberty Square home in May. When she was living in Miami, she said, she had to rent because homeownership was so expensive.

“Even if you can buy a home, you can’t afford to maintain it,” Jones said.

Staying up north

Miami’s loss is Atlanta’s gain, especially for real estate agents like Clifton Gerring, an agent with Jenny Pruitt & Associates who has enjoyed a lot of referrals from his Florida transplants to friends and family who are joining them in metro Atlanta.

Gerring got his first two Florida clients in 2005 after Hurricane Katrina devastated New Orleans.

“Then, they started referring their friends and relatives,” Gerring said. He estimates he has helped as many as a dozen of these referrals over the past two years.

The problems in coastal communities are also helping to stabilize the Atlanta area by making retirees reconsider their beachcomber dreams.

Vinings resident Ruth Stockinger and her husband were considering a move to Florida after his retirement from SunTrust Bank in September. But the costs that emerged as the couple shopped in the Naples, Fla., area for a home changed their minds.

“Homeowners’ insurance is so difficult to get for us because we had a very small claim” at their Vinings home, Stockinger said. “They won’t take on any new customers in Florida if they’ve had a claim in the last five years.”

So, the Stockingers decided to stay in Atlanta, which they have loved since moving here from Richmond, Va., four years ago. They’ll use the money they save to fund shorter beach getaways throughout the year.