Florida’s housing market is depressed due to an increasingly intense hurricane season and rising home insurance costs, according to a Redfin Market Report released Tuesday.
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Florida’s housing market is depressed due to an increasingly intense hurricane season and rising home insurance costs, according to a Redfin Market Report released Tuesday.
Florida led the way in declining annual pending home sales for the four weeks ending Nov. 10, with contracts signed in Ft. Lauderdale (-15.2 percent), Miami (-14 percent) and West Palm Beach (-13.8 percent) saw double-digit declines. Jacksonville (-9.5%) and Tampa (-7.2%) fared better than other cities. However, these cities still fall short of the national pending home sales growth rate of 4.7%.
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Redfin said the drop in buyer activity can be traced back to Hurricanes Helen and Milton, which hit the state in quick succession in late September and early October. The National Flood Insurance Program released a damage estimate report Thursday, saying Floridians face at least $500 million in property damage losses. The storm’s melee set off a domino effect, leaving homeowners with exorbitant home insurance costs or selling their homes at a loss.
Beyond climate-related headwinds, weak affordability, rising property taxes, and high homeowners association dues are dampening market activity.
“While there is still some demand for vacation homes, the market in general is very depressed,” Lindsey Garcia, an agent with Florida-based Redfin Premier, said in a prepared statement. “Buyers are struggling with persistently high housing costs and uncertainty surrounding the election. First-time buyers are especially cautious.”
“The condominium market is really struggling due to high HOA fees and homeowner’s insurance costs. On top of that, new rules put in place after the Surfside condo collapse have left many condo owners with special assessments. “I am receiving it,” she added. “Some condos have been on the market for more than a year.”
Redfin said pending home sales in Florida are currently tough, but there is still a glimmer of hope. In Tampa, pending home sales fell 32.2 percent in the four weeks ending Oct. 20, but are now down 7.2 percent, representing a 77 percent improvement over the four-week period.
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