Homeowners struggle to sell amid rising insurance costs and storm fears

[Author 0]

Homeowners struggle to sell amid rising insurance costs and storm fears

Homeowners struggle to sell amid rising insurance costs and storm fears

Anthony Holmes thought he had hit the jackpot when he joined the wave of Americans fleeing to Florida during the pandemic.

Like thousands of others, he left Virginia in 2021 for a new life in the Sunshine State, buying a five-bedroom house in a gated Tampa community.

He put down $550,000 on the property and invested another $50,000 in solar panels and interior upgrades, certain that Florida’s booming real estate market would continue to rise. Now, he can’t even give the house away, according to the Wall Street Journal.

data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///ywAAAAAAQABAAACAUwAOw==

After moving from Virginia in 2021 and spending $600,000 on his five-bedroom home, Holmes expected a quick sale when work required him to return to Virginia, but that was not the case. Keller Williams South Tampa

data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///ywAAAAAAQABAAACAUwAOw==data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///ywAAAAAAQABAAACAUwAOw==

But after eight months, five price drops and zero offers, he’s become a victim of Florida’s oversupplied housing market. Ryan Tishken – stock.adobe.com

“I can’t unload the thing,” Holmes told the outlet. “In eight months, I’ve had zero offers. No one even showed up to the open houses. Nobody.”

After listing the house in February, Holmes was sure he’d have a buyer in no time. But despite dropping the price five times, from $620,000 down to $583,900, he still hasn’t had a single offer.

The once-hot Florida housing market has turned cold, leaving Holmes and many other homeowners stranded. Across the state, home sales have slowed to a crawl. Inventory has ballooned by more than 50% in major cities like Tampa, Orlando and along the Space Coast, while demand has dropped by at least 10%, according to real estate data firm Parcl Labs.

More than half of Tampa’s homes on the market have seen price reductions, making it one of the hardest-hit metropolitan areas in the country.

data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///ywAAAAAAQABAAACAUwAOw==data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///ywAAAAAAQABAAACAUwAOw==

Rising insurance costs, high mortgage rates and storm risks have cooled what was once one of the hottest real estate markets in the country. Ryan Tishken – stock.adobe.com

A lethal mix of sky-high mortgage rates, surging insurance premiums and, increasingly, hurricanes are the ultimate culprits. After Hurricane Helene ravaged parts of Florida’s western coast just two weeks ago, another monster storm — Hurricane Milton — is roaring in the Gulf of Mexico, set to make landfall this Wednesday.

Florida Gov. Ron DeSantis has already declared a state of emergency and warned that Milton could bring significant damage. DeSantis highlighted the amount of flooding set to take place, urging residents to prepare for evacuations.

These storms have become the final straw for many Florida homeowners who are already buckling under skyrocketing insurance premiums.

data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///ywAAAAAAQABAAACAUwAOw==data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///ywAAAAAAQABAAACAUwAOw==

Hurricane Milton exploded in strength to become a potentially catastrophic Category 5 storm bound for Florida, threatening the US state with a second ferocious hurricane in as many weeks. NOAA/AFP via Getty Images

Insurance costs in Florida have surged up to 400% in recent years, driven in part by the frequency of hurricanes. Homeowners are paying more for coverage than almost anywhere else in the country, and some, like Holmes, have been dropped by their insurance providers altogether.

data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///ywAAAAAAQABAAACAUwAOw==data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///ywAAAAAAQABAAACAUwAOw==

Tampa’s housing market is cooling. oldmn – stock.adobe.com

Holmes, who was paying $1,700 a year for his insurance, was dropped after Hurricane Idalia swept near the area. Now, he pays double that amount.

A state once flooded with eager buyers is now full of desperate sellers. Analysts say Florida is facing a potential housing correction as inventory outpaces demand, leaving prices flat or even declining in some areas.

Story continues

Brad O’Connor, chief economist for Florida Realtors, believes that with the surplus of homes on the market, “we could see some price deterioration in some areas,” he told the Journal.

data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///ywAAAAAAQABAAACAUwAOw==data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///ywAAAAAAQABAAACAUwAOw==

Debris from Hurricane Helene sits on the roadside as residents evacuate before the arrival of Hurricane Milton, in New Port Richey, Florida. REUTERS

Even the condo market, once a cornerstone of Florida’s real estate boom, is taking a hit. After the tragic 2021 condo collapse in Surfside, which killed 98 people, Florida passed new laws requiring condo buildings to undergo expensive structural assessments and repairs.

In older buildings, these costs are being passed on to owners in the form of massive special assessments — sometimes reaching hundreds of thousands of dollars per unit. For those with condos in need of major repairs, the market has already soured.

Some older units are selling for nearly 20% less than last year, with mortgage lenders reluctant to finance sales for high-risk properties. At the Cricket Club condominium in North Miami, for example, two-bedroom units that once sold for $450,000 or more are now going for as little as $200,000, after residents were hit with a $134,000 assessment to cover necessary repairs.

Institutional investors, who have been major players in Florida’s real estate market for years, are also starting to pull back.

data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///ywAAAAAAQABAAACAUwAOw==data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///ywAAAAAAQABAAACAUwAOw==

Cars fill the road as they drive out of Florida before the arrival of Hurricane Milton. Getty Images

In Tampa, Orlando and Jacksonville, investors have begun listing homes they once purchased in bulk, hoping to cash in before the market sours further. Over the past 60 days, nearly one in 20 home listings in these markets have come from institutional investors.

“When institutional investors exit a market, it can be very quick,” Jason Lewris, co-founder of Parcl Labs said. “If they start to ramp up dispositions, it could have a cascading effect on home prices.”

For now, Miami is one of the few bright spots in the state. While inventory has risen, the influx of wealthy residents, cash buyers and job growth has helped keep the market stable. But for homeowners farther north, like Holmes, the outlook isn’t so rosy.

With another hurricane on the way and no buyers in sight, Holmes is just hoping to break even.

“I have no doubt that a combination of high prices, high mortgage rates and high insurance has just totally collapsed the market,” he said.

Source link

#Homeowners #struggle #sell #rising #insurance #costs #storm #fears

Pelican News

Source Link