Why houses in pandemic boomtowns are sitting unsold – despite prices falling
New research shows that Texas and Florida have the highest number of unsold homes on the market.
In Dallas, 63 percent of homes were on the market for at least 30 days in June, up from 52 percent a year earlier.
This increase of more than 10 percent was the largest increase of any major U.S. metropolitan area, according to a new analysis by Red fin.
This is followed by four metropolitan areas in the Sunshine State: Tampa, Fort Lauderdale, Jacksonville and Orlando.
Redfin found that aging inventory is growing fastest in these states, as supply outpaces demand and insurance premiums soar despite home prices beginning to fall.
In Dallas, 63 percent of homes were on the market for at least 30 days in June, up from 52 percent a year earlier, according to Redfin
In Tampa, 70 percent of homes on the market had been on the market for at least 30 days without a contract signed, up from 60 percent a year earlier.
About 77 percent of Fort Lauderdale properties had been on the market for a month, up from 68 percent. Additionally, 70 percent of Jacksonville properties were no longer on the market, up from 61 percent.
In Orlando, the number of homes on the market for more than a month rose from 60 percent to 69 percent in the year through June.
In sixth place is Fort Worth, Texas, where the number of unsold homes on the market for at least 30 days increased 8.1 percent to 64.2 percent over the past year.
Florida and Texas are seeing more new homes built than other parts of the country, adding to the overall supply while decreasing demand due to high home prices and homeowner contributions.
Despite experts predicting home prices will soon fall and some sellers lowering asking prices in former Covid boomtowns in Florida, homes still remain unsold.
The sky-high insurance costs also play a role.
Homeowners in Florida already pay the highest premiums for insurance in the US, averaging $10,996 per year in 2023, according to comparison site Insurify.
Some homebuyers living in Florida or considering moving to the state are beginning to have second thoughts due to the increasing frequency and intensity of climate disasters, Redfin said.
Homes are also taking longer to sell across the country. The share of older home listings increased over the year in 44 of the 50 most populous U.S. metros, Redfin found.
Nationally, nearly two-thirds (64.7 percent) of homes for sale in June had been on the market for at least a month without being sold.
That’s up from 59.6 percent in the same month in 2023. It’s the largest annual increase in a year.
June was also the fourth consecutive month in which the percentage of homes that were not on the market for at least one month increased year-on-year.
The number of properties that had been for sale for at least 60 days also rose in June: from 38.4 percent a year earlier to 42.6 percent.
The research shows that more and more homes are remaining unsold, as buyers are reluctant due to record high house prices and high mortgage rates.
According to the most recent data from Freddie Mac as of July 18, the average 30-year fixed-rate mortgage rate is 6.77 percent.
In Tampa, 70 percent of homes on the market had been on the market for at least 30 days without a contract signed, up from 60 percent the year before.
Florida and Texas are building more new homes than other parts of the country, adding to overall supply at a time when demand is declining (Photo: Fort Lauderdale)
Some homebuyers have doubts about Florida because of the increasing prevalence and intensity of climate disasters (Pictured: Devastation left in the wake of Hurricane Ian in 2022)
Although there are fewer and fewer new listings, there are still many listings on the market, causing inventory to pile up.
“Overall, the market is pretty much stagnant,” said Shay Stein, a Redfin Premier agent in Las Vegas.
‘More and more homes are coming onto the market, but many of them are not in good condition or are not in an attractive neighborhood. In addition, sellers are asking unrealistically high prices.
“Many sellers are willing to let their home sit on the market until they get the price they want, while many buyers are unwilling to pay sky-high prices while mortgage rates are still high.”