- Much of Florida’s housing market is cooling off because of a surplus of inventory and dwindling buyer interest. Analysts worry that a price correction in some cities could follow.
- Surging insurance costs are pricing many homeowners out of the market. Insurance premiums in Florida are up as much as 400% over the past five years in certain areas.
- Insurance premiums are likely to become even steeper following this hurricane season. Institutional investors are starting to sell some of their Florida properties because of the climbing insurance costs and the current interest-rate environment. This is another sign the market is approaching an inflection point.
Across much of Florida and especially along the western coast, a surplus of inventory and dwindling buyer interest are slowing sales and keeping homes on the market longer. That is cooling off what had been one of America’s biggest housing booms this decade.
Tropical storms and hurricanes, increasingly hitting the state’s western coast, are making matters worse.
ST. PETERSBURG, Fla.—Kellen Driscoll bought his home here in 2019, settling in the coastal enclave of Shore Acres. It flooded for the first time four years ago after tropical storm Eta dumped more than 3 feet of water.
Hoping it was a fluke, Driscoll tore out the affected drywall and started fresh. After all, the four-bedroom home built in 1960 had no flood history.
But then it happened again, and again. Like many others in the community, he put his home up for sale in the spring of this year. After seeing little interest, he cut the asking price.
On Friday, Hurricane Helene deposited more than 6 feet of storm surge in the neighborhood. The rushing waters ripped the “For Sale” sign off his front lawn, and etched a waterline that reached halfway up his front door, just underneath the doorbell. He reduced the asking price for a fifth time.
“We flooded here four times in the last four years,” said Driscoll, as he threw his television sets, furniture, appliances and other belongings to the curb. “I’m just hoping I can sell the house. It’s a good neighborhood for sure, but dealing with the floods is horrible.”
Ballooning home insurance costs and the perennial threat of violent storms are starting to undermine housing markets throughout much of the state. But in few places has the turnaround been more dramatic than in low-lying communities up and down the coast of Florida that frequently flood.
“Tampa was already heading in this direction before the hurricane hit,” said Jason Lewris, co-founder of Parcl Labs. “This hurricane may compound the market dynamics that have been occurring there over the last few months.”
While Tampa escaped a direct hit from the eye of the hurricane, it was the worst storm to hit the area in a century. The hurricane also plowed into landlocked towns well north, causing heavy damage in the Carolinas where people were just beginning to absorb the scope of ruin.
The area’s affordability, once a large part of its appeal, is also waning as insurance premiums soar. Jacob McFadden was paying $880 a year to insure his home when he bought it in 2020. That amount has since almost quadrupled, to $3,300.