Amid an ongoing insurance crisis and persistently high mortgage rates, homeowners in Florida are cutting prices to make their properties more attractive. Nearly 25% of homes are being sold for less than the initially asked price.
On the morning of this Monday (4), Florida had a total of 202,463 properties – including houses, condominiums, single-family and multi-family homes, townhouses, and lots – listed by agents on Zillow and 8,654 listed by owners and others. Among all properties listed by brokers, 47,335 appeared in the “price reduction” category, while among those listed by owners, the number was 1,167 properties – totaling 48,502 properties below the initially listed price.
The percentage of properties for sale with a price reduction in Florida represents about 24.3% of all properties.
Condominiums, in particular, are experiencing a price reduction, unlike what is happening in the rest of the country.
In the Jacksonville metropolitan area, for example, the average price of condominiums has been falling about 7% year over year. In January, sales fell 27%, and new listings increased by 32%. The story is similar in Miami, where condominium prices dropped 3%, sales fell 9%, and new listings rose 27%.
Lawrence Yun, chief economist and senior vice president of research at the National Association of Realtors (NAR), told Newsweek that Florida homeowners’ willingness to sell – even at a lower price – may be due to the appreciation of homes that the state has seen since the pandemic.
“Florida has had the highest home price appreciation in the last three years, and some people may be cashing in,” Yun said.
However, higher property insurance premiums may also be playing a role.
Adjustments in property insurance – like any other additional property cost – will induce some fixed-income homeowners, such as retirees, to sell even if for less.
Homeowners insurance in Florida was among the highest in the country, having increased 102% in the last three years, according to data from the Insurance Information Institute (Triple-I).
Homeowners insurance costs are skyrocketing in Florida due to the increasing intensity of hurricanes and other natural disasters, with some insurers completely abandoning the state. Homeowners insurance costs three times more in Florida than the national average, making it the most expensive state in the U.S. to insure a home.
Source: Newsweek and Redfin