Miami, Florida – The housing market in Florida, known for its warm weather and low taxes, experienced a surge of Americans relocating to the state during the Covid-19 pandemic. However, recent data suggests that the housing bubble in Florida may have burst as prices stagnate and supply increases in some areas.
According to a new report from Redfin, the west coast of Florida has seen a significant uptick in the number of properties on the market, resulting in longer selling times for homes. Sellers in Florida are cutting asking prices at a faster rate than anywhere else in the United States, indicating a shift in the market.
The influx of newcomers during the pandemic led to a boom in homebuying, prompting construction to accommodate the demand. However, as the market cools off, many prospective buyers have been priced out, contributing to the shift in Florida’s housing landscape.
Eric Auciello, a local Redfin sales manager, noted that out-of-town homebuyers are now seeking better deals in North Carolina or Tennessee, as Florida no longer offers the value it once did. Local workers are also finding it increasingly challenging to afford homeownership in the current market.
Of the 10 metro areas with the largest year-over-year increases in homes for sale, six are in Florida. Cape Coral, in southwest Florida, saw the most significant increase in available homes, with supply in other areas like North Port-Sarasota, Fort Lauderdale, and Tampa also rising substantially.
The trend of sellers cutting list prices is prevalent in Florida, with North Port-Sarasota leading the pack in price reductions. As the market shifts to favor buyers, sellers are facing difficulties in attracting buyers due to builders’ concessions and overpricing of properties.
In addition to the changing market conditions, Florida homeowners are grappling with a growing insurance crisis that is affecting home purchases and causing delays in deals. Rising insurance costs have hit Florida particularly hard, with a significant percentage of homeowners feeling the impact.
Similar shifts in supply and demand are also being observed in parts of Texas, with certain metro areas experiencing surges in supply and sluggish demand. Despite high equity levels in homeowners, many are hesitant to sell due to the potential rise in mortgage rates, contributing to the changing landscape of the real estate market in Texas.
As the housing market in Florida and Texas undergoes significant changes, it is becoming increasingly clear that the once-robust markets are now facing challenges that are reshaping the way buyers and sellers navigate real estate transactions.