Real estate inventory in parts of Florida is surging to uncomfortable levels — and sellers are beginning to slash prices, according to a report.
On the west coast of Florida, the number of houses up for sale and the rate at which their current owners are cutting asking prices is soaring, according to a report from real estate company Redfin released Thursday.
Redfin found that in the western parts of the state, whose coastline is on the Gulf of Mexico, inventory in Cape Coral and North Port has jumped the most, about 50% year-over-year as of March — more than any other US metro.
Trendy North Port-Sarasota saw homes for sale rise 48%, while the figure in upscale West Palm Beach, known to be home to wealthy snowbirds during the Northeast’s cold winters, rose a more modest 20%.
Of the 10 cities where sellers are most likely to slash their list prices, five alone are in Florida, including North Port-Sarasota — which had the highest share of listings reducing 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 remote workers 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 that was earlier reported on by Fortune.
“Sarasota, in particular, has been overvalued for decades, and the chickens have finally come to roost.”
As a result, many aspiring homeowners have been priced out of Florida altogether, instead opting for North Carolina or Tennessee to get more bang for their buck.
“Out-of-town homebuyers no longer see Florida as a place to get amazing value,” Auciello added.
Part of the reason: an insurance crisis, according to Redfin, which has been throwing a wrench into home purchases and delaying deals.
At the 11th hour, many buyers are realizing that they won’t be grandfathered into affordable home insurance rates that the owners before them enjoyed.
Auciello — whose own home insurance is now $14,000 a year, up from around $8,000 two years ago — noted that “a hefty insurance bill…can be a really big issue for someone buying a waterfront home on a smaller budget.”
Home insurance premiums in storm-battered Florida even has seniors growing concerned that they won’t be able to hang onto their homes.
Homeowners insurance in Florida ranges from $1,700 to $2,700 per year based on $300,000 in dwelling coverage and $100,000 of liability coverage, according to US News.
The insurance is required for those seeking a mortgage, forcing many buyers to reconsider how much they are willing to spend.
In addition, existing HOA fees for condo owners have doubled in the past year amid the growing threat from 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 Sept. 1.
It caused damages between $3 billion and $5 billion.
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