A housing crisis is brewing in Florida.
A confluence of decreased homebuying and increased housing stock has created a perfect storm for would-be sellers in the Sunshine State.
The number of unsold homes in Florida rose almost 23% year-over-year, according to a new report by Redfin. The stale housing stock and a surge of cancellations has led to plummeting home prices. Some sellers have slashed prices up to 40%, and others have taken almost half a million off their asking prices, according to the Daily Mail.
Housing experts point to the state’s untenable housing fees, a glut of new post-pandemic housing stock and, of course, natural disasters.
“Bidding wars are very rare these days,” Jacksonville real estate agent Bryan Carnaggio said in a statement in the Redfin report. “With this many houses for sale, a home basically needs to look like it’s out of a magazine — and be priced fairly — to get multiple offers.”
“The end of January saw 172,209 unsold homes in Florida — the state’s highest unsold inventory since Redfin began collecting data in 2012.”
More than 41,000 home-purchase agreements in the US fell through in January, according to Redfin, and Florida recorded the highest share. Pending home sales in Florida fell 9.3% year-over-year in January.
The state’s condo inventory, in particular, is at an all-time high, according to Redfin. The single-family home inventory isn’t far behind.
Condo building was a focus of building push during the pandemic-era housing shortages. It also gained an unfortunate spotlight following the tragic 2021 collapse of the 12-story condo building in Surfside that killed 98.
New statewide safety regulations in the wake of the collapse have caused HOA fees to soar.
“HOAs are getting tough all across the country lately, but especially in Florida,” senior economist at Realtor.com, Joel Berner, told the Daily Mail.
Natural disasters have also spiked HOA fees and as well as insurance costs.These collective costs can add up to be greater than owners’ mortgage payments, the Daily Mail reported, making homeownership untenable.
Florida listings reached an all time high in eight of Florida’s 31 metropolitan areas, and a majority of them are on the state’s condo-heavy, natural disaster-prone coasts. Those areas include Daytona Beach, Sarasota and Ocala.
Housing shortages following pandemic-era inflow of out-of-state residents led to a massive building frenzy in Florida, which recently culminated in a glut of new builds. Buyers have more options than ever in this overvalued market, and stale inventory is piling up as a result.
In many ways, however, this may be as much of a price correction as it is a sales crisis. Prices are cooling down from impressive peaks over the last five years, and buyers can, for the first time in a long time, take their pick.