Its warm weather, low taxes and relatively affordable housing market attracted a surge of Americans to Florida during the Covid-19 pandemic, pushing up home values in the state.
But as prices stagnate and supply soars in some areas, it seems that Florida’s housing bubble may have burst.
On the west coast of the state, the number of properties on the market is surging, and homes are taking much longer to sell, according to new data from Redfin.
Sellers are also cutting asking prices at a faster rate than anywhere else in the US, insights from the real estate company show.
Florida has been building homes, partly to accommodate the flood of newcomers that appeared during the pandemic homebuying boom. But the boom is now over, Redfin said, in part because many people have been priced out of the market.
Cape Coral, in southwest Florida, has seen the number of homes on the market soar 51 percent in the last year
‘Out-of-town homebuyers no longer see Florida as a place to get amazing value,’ said Eric Auciello, a local Redfin sales manager.
‘Now they’re moving to North Carolina or Tennessee to get a good deal. Many local blue-collar workers have been priced out of homeownership, too.’
Of the 10 metro areas that posted the largest year-over-year increases in homes for sale, six are in Florida, Redfin data revealed.
Cape Coral, in southwest Florida, saw the biggest jump, with the number of homes on the market soaring 51 percent.
Supply in North Port-Sarasota, meanwhile, is up 48 percent, supply in Fort Lauderdale is up 30 percent, and it is up 29 percent in Tampa, according to latest data from March.
In Orlando, meanwhile, the number of homes for sale was up 23 percent, while supply was up 20 percent in West Palm Beach.
‘Out-of-town homebuyers no longer see Florida as a place to get amazing value,’ said Eric Auciello, a local Redfin sales manager
Of the 10 metro areas where sellers were most likely to cut their list prices, five are in Florida.
North Port-Sarasota tops the list, according to Redfin, where 48 percent of listings last month had a price cut – the highest share in the country.
Next came Tampa, where 44 percent of homes saw price cuts, and 41 percent of homes had their list price slashed in Cape Coral.
‘Two years ago, the North Port metro was one of the most competitive housing markets in the country because it was affordable for remote workers and there was a shortage of homes for sale, but none of those things are true today,’ Auciello continued.
‘Sarasota, in particular, has been overvalued for decades, and the chickens have finally come to roost. The Tampa metro has been faring a bit better.’
North Port-Sarasota has also seen its median sale price drop 4.6 percent in the last year, Redfin said, and homes took 20 days longer to sell last month than they did in March 2023.
In Cape Coral, meanwhile, the typical home took 31 more days to sell than a year earlier – the largest jump in the nation.
North Port-Sarasota has seen price cuts to listings, and the typical home took 31 more days to sell in March than the year prior
Some 44 percent of home listings in Tampa have had a price cut in the year to March 2024
Individual home sellers are having a tough time attracting buyers in part because builders are offering concessions that are hard for buyers to refuse, Auciello said, which means listings from regular sellers are sitting on the market.
Homes are also sitting because many sellers are pricing their properties too high, and then being forced to cut later, he added.
‘The sharp ascent in Florida housing prices in recent years has driven a lot of homeowners to cash in on their equity, but some of them are having a hard time adjusting to the fact that it’s a buyer’s market,’ Auciello said.
The growing insurance crisis in the state is also throwing a wrench into home purchases and in some cases delaying deals, Redfin said.
Some 70 percent of Florida homeowners said they had been affected by rising coverage costs or had been dropped by their insurer, according to a separate Redfin survey released earlier this month.
This is compared to 44.6 percent of homeowners nationwide.
And 11.9 percent of people in the Sunshine State who plan to move in the next year cited rising insurance costs as a reason – roughly twice the national share of 6.2 percent.
The story is also similar in some parts of Texas, Redfin added, with supply beginning to surge and demand becoming sluggish.
Of the 10 metro areas that posted the largest year-over-year increases in supply, two are in Texas – McAllen and Dallas.
And of the 10 metro areas where sellers are most likely to cut list prices, Houston and San Antonio make the list.
Connie Durnal, a Redfin Premier real estate agent in Dallas, said: ‘Last year was by far the slowest market I’ve seen in my 20 years as a real estate agent.
‘Move-up buyers are almost nonexistent. Even though a lot of homeowners have built up a ton of equity, many don’t want to sell because their monthly payment would double or triple due to high mortgage rates.’
Ealier this year, separate research showed sales of Florida condos slumped at the start of the year despite prices falling and a rise in ‘motivated’ sellers
Surge in Sunbelt real estate prices means wealthy Americans moving to Florida or Texas are saving $38K less a year than they used to.