Its warm weather, low taxes and relatively affordable housing market attracted Americans to Florida during the COVID-19 pandemic, driving up home values in the state.
But as prices stabilized and supply increased in some areas, it seemed Florida’s housing bubble had burst.
On the state’s West Coast, the number of properties on the market is increasing, and homes are taking longer to sell, according to new data from Redfin.
Real estate company data shows sellers are cutting asking prices faster than anywhere else in the US.
Florida is building homes, partly to accommodate the influx of new people who showed up during the home buying boom during the pandemic. But the boom has now ended, Redfin said, because many people have been forced out of the market.
The number of homes on the market in Cape Coral in Southwest Florida has increased 51 percent in the last year
‘Out-of-town home buyers no longer see Florida as a place to find amazing value,’ said local Redfin sales manager Eric Ausiello.
‘Now they’re going to North Carolina or Tennessee to get a good deal. Many local blue-collar workers have also been locked out of homeownership.’
Redfin data showed that of the 10 metro areas that recorded the largest year-over-year increase in homes for sale, six were in Florida.
Cape Coral in Southwest Florida saw the biggest jump, with the number of homes on the market increasing 51 percent.
Meanwhile, supply in North Port-Sarasota has increased 48 percent, supply in Fort Lauderdale has increased 30 percent, and supply in Tampa has increased 29 percent, according to the latest data from March.
Meanwhile, in Orlando, the number of homes for sale rose 23 percent, while supply in West Palm Beach rose 20 percent.
“Out-of-town home buyers no longer see Florida as a place to find amazing value,” said Eric Ausiello, local sales manager at Redfin.
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, where 48 percent of listings had a price reduction last month — the highest share in the country, according to Redfin.
This was followed by Tampa, where 44 percent of homes saw price reductions, and Cape Coral saw 41 percent of homes see list price reductions.
‘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 neither of those things are true today,’ Ausiello Said further.
‘Sarasota, in particular, has been highly valued for decades, and the chickens have finally come to settle down. “Tampa Metro has fared a little better.”
North Port-Sarasota has seen its average sales price decline 4.6 percent over the past year, Redfin said, and it took 20 days longer for homes to sell last month than in March 2023.
Meanwhile, in Cape Coral, the typical home took 31 days longer to sell than a year ago — the largest jump in the country.
North Port-Sarasota has seen listing prices cut, and the typical home took 31 days longer to sell in March than last year.
Nearly 44 percent of home prices in Tampa have been cut by March 2024
Individual home sellers are having a hard time attracting buyers because builders are offering concessions that are difficult for buyers to refuse, Ausiello said, which means listings from regular sellers remain on the market.
Homes are also sitting because many sellers are pricing their properties too high and then are forced to take a cut later, he said.
Ausiello said, ‘The rapid increase in housing prices in Florida in recent years has prompted many homeowners to cash in on their equity, but some of them are having difficulty adjusting to the fact that It’s a buyer’s market.’
Redfin said the growing insurance crisis in the state is also hindering home purchases and in some cases delaying deals.
According to a separate Redfin survey released earlier this month, nearly 70 percent of Florida homeowners said they have been hit by rising coverage costs or have been dropped by their insurer.
This compares to 44.6 percent of homeowners nationwide.
And 11.9 percent of people planning to move in the next year to the Sunshine State cited rising insurance costs as the reason — nearly double the national share of 6.2 percent.
Redfin said the story is similar in parts of Texas, where supply has started to swell and demand has slowed.
Of the 10 metro areas that saw the largest increases in year-over-year 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 are on the list.
Connie Darnall, Redfin Premier Real Estate Agent in Dallas, said: ‘Last year was the slowest market I have ever seen in my 20 years as a real estate agent.
‘Buyers moving forward are almost negligible. “Although many homeowners have accumulated a lot of equity, many do not want to sell because their monthly payments will double or triple due to higher mortgage rates.”
Earlier this year, separate research showed that Florida condo sales declined at the beginning of the year despite falling prices and an increase in ‘motivated’ sellers.
Rising Sunbelt real estate prices mean wealthy Americans moving to Florida or Texas are saving $38,000 less a year than before.
