Housing market cools along Florida’s Gulf Coast

The uptick in the construction of new housing followed the influx of newcomers to Florida during the pandemic, but that boom is now tapering off.

Following years of soaring home prices and a shortage of housing, the tide is beginning to turn in favor of prospective buyers along Florida’s western coast, according to Redfin, a national real estate brokerage.

The surge in housing supply coupled with lackluster buyer demand means that houses are staying on the market longer and sellers are reducing their asking prices. And it’s all occurring at a faster rate along Florida’s Gulf Coast than anywhere else in the US.

The uptick in the construction of new housing followed the influx of newcomers to Florida during the pandemic, but that boom is now tapering off, as many buyers were priced out of the market when housing was scarce.

Among the ten metro areas witnessing the largest year-over-year increases in supply, six are in Florida: Cape Coral, FL experienced the most significant rise in homes for sale (51%), followed by North Port-Sarasota, FL (48%), Fort Lauderdale, FL (30%), Tampa, FL (29%), Orlando, FL (23%), and West Palm Beach, FL (20%).

Five Florida metro areas were among the ten where sellers were most inclined to slash their list prices. Notably, North Port-Sarasota had the highest share of listings with price cuts (48%), followed by Tampa (44%), Cape Coral (41%), Orlando (35%), and Jacksonville, FL (33%).

Median sale prices declined from a year earlier in North Port-Sarasota (-4.6%), and prices climbed least in Tampa (1.1%).

Two Florida metros observed the most significant increases in median days on the market. In Cape Coral, the typical home took 31 more days to sell than a year earlier—the largest jump in the nation. Next came North Port-Sarasota, at 20 days more than last year.

“Out-of-town homebuyers no longer see Florida as a place to get amazing value. Now they’re moving to North Carolina or Tennessee to get a good deal. Many local blue-collar workers have been priced out of homeownership, too,” said Eric Auciello, a local Redfin sales manager. “Two years ago, the North Port metro was one of the most competitive housing markets in the country because it was affordable for remote workers and there was a shortage of homes for sale, but none of those things are true today. Sarasota, in particular, has been overvalued for decades, and the chickens have finally come to roost. The Tampa metro has been faring a bit better.”

The insurance crisis in Florida further complicates home purchases, with rising insurance costs or coverage changes affecting a significant portion of homeowners. This issue can delay deals or lead to concessions from sellers to salvage transactions.

Nationally, new listings slowed in March, with prices continuing to rise because of a shortage of homes for sale. Despite a slight decrease in home sales compared to the previous month, prices remained on an upward trajectory, reflecting ongoing demand amidst limited inventory.

 

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