Property prices boomed here during Covid – they are now being slashed as soaring numbers of homes sit unsold

Warm weather, low taxes and a relatively affordable housing market drew a wave of Americans to Florida during the Covid-19 pandemic, pushing up home prices in the state.

But with prices stagnant and supply soaring in some areas, it appears Florida’s housing bubble has burst.

On the state’s west coast, the number of homes on the market is rising and homes are taking much longer to sell, new sources show. facts from Redfin.

Sellers are also lowering asking prices faster than anywhere else in the US, according to insights from the real estate company.

Florida has been building homes, in part to accommodate the flood of newcomers that came during the pandemic home-buying boom. But the boom is now over, Redfin says, in part because many people have been priced out of the market.

“Out-of-town homebuyers no longer see Florida as a place where they can get great value,” said Eric Auciello, a local sales manager for Redfin.

“Now they’re moving to North Carolina or Tennessee to get a good deal. Many local workers have also been priced out of home ownership.”

Of the 10 metropolitan areas that posted the largest year-over-year increases in the number of homes for sale, six are in Florida, Redfin data shows.

Cape Coral, in southwest Florida, saw the biggest jump, with the number of homes on the market increasing 51 percent.

Meanwhile, supply is up 48 percent in North Port-Sarasota, 30 percent in Fort Lauderdale and 29 percent in Tampa, according to the latest data from March.

In Orlando, the number of homes for sale increased by 23 percent, while listings in West Palm Beach increased by 20 percent.

Of the 10 metro areas where sellers would be most likely to lower their list prices, five are in Florida.

According to Redfin, North Port-Sarasota tops the list, where 48 percent of listings saw a price reduction last month – the highest share in the country.

Next came Tampa, where 44 percent of homes saw price reductions and 41 percent of homes in Cape Coral had their list prices reduced.

“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 today none of that is true,” continued Auciello.

“Sarasota in particular has been overvalued for decades and the chickens are finally in place. “Tampa metro is doing a little better.”

North Port-Sarasota has also seen its average sales price drop 4.6 percent over the past year, Redfin said, and it took 20 days longer to sell homes last month than it did in March 2023.

In Cape Coral, meanwhile, it took 31 days longer to sell a house than it did a year earlier – the biggest jump in the country.

Individual home sellers are having a hard time attracting buyers, in part because builders are offering concessions that are hard for buyers to refuse, Auciello said, meaning there are offers from mainstream sellers in the market.

Homes are also sitting idle because many sellers price their properties too high and are then forced to make cuts later, he added.

“The sharp increase in Florida home prices 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 is a buyer’s market,” Auciello said.

The state’s growing insurance crisis is also throwing a spanner in the works for homes and in some cases delaying deals, according to Redfin.

About 70 percent of Florida homeowners said they had been hit by rising coverage costs or had been turned down by their insurer, according to a separate Redfin report. questionnaire released earlier this month.

This is compared to 44.6 percent of homeowners nationwide.

And 11.9 percent of people in the Sunshine State planning to move 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, where supply is starting to increase and demand is becoming sluggish.

Of the ten metropolitan areas where supply increased the most year-over-year, two are in Texas: McAllen and Dallas.

And of the ten metro areas where sellers are most likely to lower list prices, Houston and San Antonio are at the top.

Connie Durnal, a real estate agent with Redfin Premier 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 virtually non-existent. Although many homeowners have built up a lot of equity, many do not want to sell because their monthly costs would double or triple due to high mortgage rates.’

Earlier this year, separate research found that condo sales in Florida fell at the start of the year, despite falling prices and a rise in the number of ‘motivated’ sellers

The rise in Sunbelt real estate prices means that wealthy Americans who move to Florida or Texas will save $38,000 less per year than before.