The Florida housing market is in shambles and things aren’t looking too promising as people look ahead to the future.
Homes currently for sale in the state remain on the market longer, while those looking to purchase a home are showing some resistance to entering a “market that is hampered by high mortgage rates, expensive home insurance costs, and elevated prices.”
Single-family home sales in Florida are down by 0.5% from 2023. Condos and townhouses have decreased by almost 9%, and the number of listings and prices continue to skyrocket. One expert places some of the blame on insurance rates, which, despite being a necessary step in the home-buying process, do not match the budget for most homebuyers as they calculate the costs to purchase a new home. High taxes also deter potential homebuyers in the southern state.
“Home insurance has become so expensive in Florida…that homeowners are having trouble affording the higher premiums,” said NerdWallet home and mortgage expert Holden Lewis in an interview with Newsweek. “A lot of owners are listing their homes for sale so they can buy or rent a place that’s affordable, which is why inventories are rising. Meanwhile, buyers are cautious as they factor insurance costs into their home purchase decisions.”
With some of the highest growth of active listings throughout the nation, Florida cities like Tampa ranked No. 1 in the listings where their owners place homes on the market. Orlando is in the No. 3 spot, while Jacksonville ranks at No. 5.
Due to the high amount of listings, Hale says homes are sitting on the market longer, yet it isn’t stopping current homeowners from putting their homes up for sale.
Several factors contribute to Florida’s current market, especially as a state home to many retirees who are often “willing to wait on the market a while longer” compared to some of the new homebuyers entering the space for the first time.
Additionally, homeownership statistics in Florida continue to show a vast racial disparity, with the percentage of Black homeownership in 2020 sitting at 46.3% in comparison to the 76.4% of their white counterparts who owned homes at the time. Hispanic homeowners were also slightly higher at 53.9%
While Florida is seemingly facing what one would call a housing crisis, the impacts are currently being experienced by homeowners and buyers all over the country.
Moreover, the rise in Black women who own homes has risen significantly in recent years, however, this does not mean that the process has become easier. A 2023 Snapshot of Race and Home Buying in America report led by the National Association of Realtors found that 27% of Black homebuyers are made up of Black women.
In addition to that, from October 2018 to January 2020, the average annual rate of Black female homebuyers increased at an average annual of 7.3% in comparison to Black males whose annual rate grew by 3.4%
Yet, Black women still face challenges when it comes to purchasing a home. Among those setbacks are education debt, mortgage access, and low wage jobs
“There are instances where Black people are buying homes, Black women are buying homes,” said LendingTree senior economist Jacob Channel. “That doesn’t mean that it’s easy for them and that doesn’t mean that it’s not being made unnecessarily difficult by certain societal hurdles that stand in the way, that should not exist.”
While the current housing market appears to be in shambles, the most recent U.S. Housing Market Crash occurred from 2007 to 2009, with its most impactful moments occurring in 2008. That same year led to “one of the primary causes of the global financial crisis, wreaking havoc on the financial stability of entire economies the world over.”
“With mortgage rates remaining around 7%, significant improvements are unlikely in the short term,” said Jiayi Xu, economist at Realtor.com, confirmed to Forbes.
Experts suggest a few options to see a significant positive change within the home buying and selling landscape.
“For the best possible outcome, we’d first need to see inventories of homes for sale turn considerably higher,” says Vice President of online mortgage company HSH.com, Keith Gumbinger. “This additional inventory, in turn, would ease the upward pressure on home prices, leveling them off or perhaps helping them to settle back somewhat from peak or near-peak levels.”
