Real estate inventory in parts of Florida is surging to uncomfortable levels — and sellers are beginning to slash prices, according to a report.
On the west coast of Florida, the number of houses up for sale and the rate at which their current owners are cutting asking prices is soaring, according to a report from real estate company Redfin released Thursday.
Redfin found that in the western parts of the state, whose coastline is on the Gulf of Mexico, inventory in Cape Coral and North Port has jumped the most, about 50% year-over-year as of March — more than any other US metro.
Trendy North Port-Sarasota saw homes for sale rise 48%, while the figure in upscale West Palm Beach, known to be home to wealthy snowbirds during the Northeast’s cold winters, rose a more modest 20%.
On Florida’s western coast, the number of houses up for sale and the rate at which their current owners are cutting asking prices is soaring, according to a report from real estate company Redfin. Christopher Sadowski
Of the 10 cities where sellers are most likely to slash their list prices, five alone are in Florida, including North Port-Sarasota — which had the highest share of listings reducing their prices in the country, at 48% — as well as Tampa, Cape Coral, Orlando and Jacksonville, Redfin found.
In recent years, “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,” Eric Auciello, Redgin’s sales manager said in the report that was earlier reported on by Fortune.
“Sarasota, in particular, has been overvalued for decades, and the chickens have finally come to roost.”
As a result, many aspiring homeowners have been priced out of Florida altogether, instead opting for North Carolina or Tennessee to get more bang for their buck.
“Out-of-town homebuyers no longer see Florida as a place to get amazing value,” Auciello added.
Part of the reason: an insurance crisis, according to Redfin, which has been throwing a wrench into home purchases and delaying deals.
At the 11th hour, many buyers are realizing that they won’t be grandfathered into affordable home insurance rates that the owners before them enjoyed.
Auciello — whose own home insurance is now $14,000 a year, up from around $8,000 two years ago — noted that “a hefty insurance bill…can be a really big issue for someone buying a waterfront home on a smaller budget.”
Homeowners insurance in Florida ranges from $1,700 to $2,700 per year based on $300,000 in dwelling coverage and $100,000 of liability coverage, according to US News.
Homeowners in Florida can expect to dish out as much as $2,700 per month on homeowners insurance alone, which has priced many aspiring buyers out of the market. Getty Images
The insurance is required for those seeking a mortgage, forcing many buyers to reconsider how much they are willing to spend.
In addition, existing HOA fees for condo owners have doubled in the past year amid the growing threat from hurricanes.
However, the state had a fairly light hurricane season last year, with only Hurricane Idalia rumbling through the less-densely populated western region on Sept. 1.
It caused damages between $3 billion and $5 billion.
TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.
The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.
However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.
Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.
This report by The Canadian Press was first published Sept. 17,2024.
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
