Its warm climate, low taxes and relatively affordable housing market attracted a surge of Americans to Florida during the Covid-19 pandemic, driving up home values in the state.
But as prices stagnate and supply soars in some areas, it appears Florida’s housing bubble may have burst.
On the state’s west coast, the number of properties on the market is increasing and homes are taking much longer to sell, according to new data from Redfin.
Sellers are also slashing sales prices at a faster rate than anywhere else in the U.S., real estate company insights show.
Florida has been building homes, in part to accommodate the flood of newcomers that appeared during the pandemic home-buying boom. But the boom is over, Redfin said, in part because many people have been priced out of the market.
Cape Coral, in southwest Florida, has seen the number of homes on the market soar 51 percent in the last year.
“Out-of-town homebuyers no longer see Florida as a place to get incredible value,” said Eric Auciello, local sales manager for Redfin.
‘Now they are moving to North Carolina or Tennessee to get a good deal. Many local workers have also been forced to lose ownership of their homes.’
Of the 10 metropolitan areas that saw the largest year-over-year increases in homes for sale, six are in Florida, Redfin data revealed.
Cape Coral, in southwest Florida, saw the largest increase, with a 51 percent increase in the number of homes on the market.
Meanwhile, supply in North Port-Sarasota increased 48 percent, supply in Fort Lauderdale increased 30 percent and supply increased 29 percent in Tampa, according to the latest data from March.
Meanwhile, in Orlando, the number of homes for sale increased 23 percent, while supply increased 20 percent in West Palm Beach.
“Out-of-town homebuyers no longer see Florida as a place to get incredible value,” said Eric Auciello, local sales manager for Redfin.
Of the 10 metropolitan areas where sellers were most likely to reduce their list prices, five are in Florida.
North Port-Sarasota tops the list, according to Redfin, where 48 percent of listings last month had a price cut, the highest proportion in the country.
Then came Tampa, where 44 percent of homes saw price cuts, and 41 percent of homes saw their list price reduced in Cape Coral.
“Two years ago, the North Port metro was one of the most competitive real estate markets in the country because it was affordable for remote workers and there was a shortage of homes for sale, but none of that is true today,” Auciello continued.
‘Sarasota, in particular, has been overrated for decades, and the goose has finally come to roost. The Tampa metro has done a little better.”
North Port-Sarasota also saw its median sales price drop 4.6 percent over the past year, Redfin said, and homes took 20 days longer to sell last month than they did in March 2023.
Meanwhile, in Cape Coral, a typical home took 31 days longer to sell than the previous year — the largest jump in the country.
North Port-Sarasota has seen price cuts in listings, with a typical home taking 31 days longer to sell in March than it did a year earlier.
About 44 percent of Tampa home listings have seen a price cut in the year through March 2024.
Individual home sellers are having a hard time attracting buyers in part because builders are offering concessions that buyers have a hard time refusing, Auciello said, meaning there are offers from regular sellers in the market.
Homes are also stagnant because many sellers are pricing their properties too high and then being forced to cut back later, he added.
“The sharp rise in home prices in Florida in recent years has led many homeowners to cash in on their equity, but some of them are having a hard time adjusting to the fact that it’s a buyer’s market,” he said. Auciello.
The growing insurance crisis in the state is also hampering home buying and, in some cases, delaying deals, Redfin said.
About 70 percent of Florida homeowners said they had been hit by rising coverage costs or had been abandoned by their insurer, according to an independent study from Redfin. survey released earlier this month.
This compares 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, about double 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 slowing.
Of the 10 metropolitan areas that saw the largest year-over-year increases in supply, two are in Texas: McAllen and Dallas.
And of the 10 metro areas where sellers are most likely to reduce list prices, Houston and San Antonio made the list.
Connie Durnal, a real estate agent with Redfin Premier in Dallas, said: ‘Last year was by far the slowest market I have seen in my 20 years as a real estate agent.
‘Promotion buyers are almost non-existent. Although many homeowners have built up a large amount of equity, many do not want to sell because their monthly payment would double or triple due to high mortgage rates.’
Earlier this year, separate research showed that condo sales in Florida plummeted at the beginning of the year despite falling prices and an increase in “motivated” sellers.
Rising real estate prices in the Sunbelt mean that wealthy Americans who move to Florida or Texas are saving $38,000 less a year than before.