According to Redfin, Florida has the most significant number of active listed properties in the US. The data reveals that in some regions of Florida, the total supply of homes listed increased more than 75 times faster than the national average between January and February. Let’s see how this differs from the American average and what it means.
What’s Causing This Rise?
This dramatic rise in active listings in Florida could be indicative of various factors influencing the state’s housing market. It may suggest a shift in local housing demand or something else entirely.
Delving into what’s going on in Florida raises some interesting red flags. The rest of the US’s property market prices seem to be increasing in comparison.
Active Listings In The US are Growing
According to Redfin, active listings in the US, including new and existing homes, grew 0.8% month-over-month in February on a seasonally adjusted basis, reaching 1,601,260 – the highest level in a year.
Active listings were down by just 0.1% compared to the previous year, the smallest annual decline in months. Florida’s numbers are much larger.
New Listings Also on the Rise
Nationally, the number of new listings climbed 3.8% in February compared to the previous month – the most considerable increase in six months and the highest level since September 2022.
New listings were up 14.8% year over year, the largest annual gain since May 2021. This might be great news for potential buyers looking to capitalize on the availability of houses.
Price Surges Have Crippled Buyers
In recent years, the price of houses in the US has skyrocketed, with many potential homeowners watching the cost of houses rise to a point where they can no longer afford them.
Natural market prices, supply and demand, and other factors have impacted the affordability of houses throughout the US. Florida has different problems, causing more houses to go on the market there.
Florida’s Active Listings Explode
In recent months, Florida has witnessed a significant surge in active listings, outpacing the national trend. This increase has led to a notable decline in prices, although the rise in sales hasn’t matched this drop.
According to journalist Lance Lambert’s report for ResiClub, active listings in Florida have surged by 45.8 percent in February compared to the previous year. This increase is massive compared to the rest of the US.
Active Listings Come Alongside More Home Construction
Florida is renowned for its robust home construction alongside Texas. The massive availability of houses has increased the state’s number of active listings, attracting people who want to invest in property.
This surge is primarily fueled by an uptick in condo listings, driven by owners seeking relief from escalating Homeowner Association (HOA) fees and insurance expenses.
Flooding and Homeowners’ Insurance Are Serious Issues
Floridian homeowners have to face a significant uphill battle dealing with increased homeowners insurance. Some areas have seen rates double in the last couple of years.
Recent flooding has taught Florida’s homeowners that insurance is not an option but a necessity to ensure that their property investment doesn’t deteriorate due to a disaster.
Florida’s Prices for Condos are Decreasing
What happens when there is more supply than demand? The price falls through the floor, which would explain the decrease in prices that Florida is seeing for its condo offerings.
Redfin’s data unveils a distinctive deviation in Florida’s condo market from the broader U.S. trend, with prices steadily climbing. Particularly noteworthy are the declines observed in major Florida metropolitan areas.
Investment Cost and Return Need to be Weighed
Why is Florida’s real estate market so different from the rest of the US? Homeowners association fees, insurance, and other costs make buying real estate in Florida a bad business.
Recent disasters fueled by runaway climate change have made it impossible to expect a house to survive the constant battering it will take if left to its own devices in the state.
The Market Will Find Its Balance
Some experts believe that the housing market in Florida is just going through a period of upheaval. Eventually, prices will settle until condos will be good value again.
Unfortunately, there’s no way to tell when this will happen or if it will be too late to help Floridians who have already invested in these properties.
State Trying To Help Homeowners
The state covers some properties with insurance but only addresses properties that are within a certain evaluated range. Unfortunately, that leaves many people without coverage.
New state legislation intends to increase the range to which the state can offer coverage. However, the legislation faces serious pushback from certain areas, declaring it a socialist measure.
Homeowners Desperate to Sell
Florida’s homeowners are trying very hard to sell their property, but it’s just not attractive to anyone, even those who live outside the state. Zillow notes that Florida has the highest number of “motivated sellers.”
A motivated seller is someone who is willing to accept a price below market value for their property. In Florida, any price someone can get for their property is worth it to leave.
Some Homeowners Are Losing their Mortgages
Thanks to the increased costs of owning and maintaining a home in the state, many homeowners can’t afford their mortgage payments, and banks foreclose on them.
In this economic climate, foreclosed homes will also enter the market, albeit at a reduced rate. Given the option, many buyers would choose foreclosed properties over purchasing from other sellers.
Should You Buy a House in Florida?
With so many houses on the market, buying one in Florida seems like a good idea. Except, there’s a reason so many people are leaving the state. Until there’s a guarantee of homeowners insurance price increases or some relief for homeowners in the region, investing in a Florida home is not a good idea.
Condos are scarcely a better buy. Even though their prices are affordable, the cost of maintenance and homeowners association fees put them among the most pricey investments to maintain. It would be easier and cheaper to buy property on a Caribbean island. It’s better to hold off until Florida’s housing market settles into a more regular pattern.
