Home inventory in parts of Florida is rising to uncomfortable levels — and sellers are starting to drop prices, according to a report.
On Florida’s west coast, the number of homes for sale and the rate at which their current owners are lowering asking prices are rising, according to a report from real estate firm Redfin released Thursday.
Redfin found that in the western parts of the state, whose coastline lies on the Gulf of Mexico, inventory in Cape Coral and North Port is up the most, about 50% year-over-year in March — more than any other U.S. metro. .
Trendy North Port-Sarasota saw homes for sale jump 48%, while upscale West Palm Beach, known for being home to affluent snowbirds during the Northeast’s cold winters, rose a more modest 20%.
Of the 10 cities where sellers are most likely to lower their list prices, five are in Florida alone, including North Port-Sarasota — which had the highest share of listings that reduced their prices in the country, at 48% — as well as Tampa , Cape Coral, Orlando and Jacksonville, Redfin found.
In recent years, “the North Port metro was one of the most competitive housing markets in the country because it was affordable for telecommuters and there was a shortage of homes for sale, but none of those things are true today,” Eric Auciello , Redgin’s sales manager said in the report, which was previously reported on by Fortune.
“Sarasota in particular has been overrated for decades and the chickens have finally come to roost.”
As a result, many aspiring homeowners have been priced out of Florida entirely, instead opting for North Carolina or Tennessee for more bang for their buck.
“Out-of-town homebuyers no longer see Florida as a place to get great value,” Auciello added.
Part of the reason: an insurance crisis, according to Redfin, which has thrown a wrench into home buying and delayed deals.
At the 11th hour, many buyers realize that they won’t be able to afford the affordable home insurance rates that the owners before them enjoyed.
Auciello — whose own home insurance is now $14,000 a year, up from about $8,000 two years ago — noted that “a big insurance bill … can be a really big problem for someone buying a waterfront home on a shoestring budget. “
Home insurance premiums in storm-hit Florida are even causing seniors to worry that they won’t be able to hang on to their homes.
Homeowners insurance in Florida ranges from $1,700 to $2,700 per year based on $300,000 in home coverage and $100,000 in liability coverage, according to US News.
The insurance is required for those applying for a mortgage, forcing many buyers to reconsider how much they are willing to spend.
In addition, existing HOA fees for condominiums have doubled in the past year amid the growing threat of hurricanes.
However, the state had a fairly light hurricane season last year, with only Hurricane Idalia rumbling through the less densely populated western region on September 1.
It caused damages between 3 and 5 billion dollars.
