Home sellers in Florida and Texas are now slashing their asking prices as housing supply surges in the metro areas, according to a report.
On the west coast of Florida, the number of houses up for sale is surging. Of all places in Florida, Cape Coral and North Port saw the biggest surge in homes for sale, with inventory up about 50% from March 2023, per a new Redfin report.
With supply surging in the Florida market and a decreasing demand due to the state's insurance crisis, home sellers are now being forced to cut their asking price to attract buyers. Sellers were most likely to cut their asking price in North Port-Sarasota, where 48% of listings saw reduced prices. This was followed by Tampa, where 44% of listings had price cuts; Cape Coral, 41%; Orlando, 35%; and Jacksonville, 33%.
A similar situation is happening in Texas, where inventory is also surging. Two of the 10 metro areas that posted the largest year-over-year increases in housing supply are in Texas, particularly McAllen, which saw a 25% increase in listings, and Dallas, 20%.
Additionally, two of the 10 metro areas where sellers were most likely to slash prices are in Texas. At least 33% of listings in Houston and 33% of all homes for sale in San Antonio saw price cuts.
The Effects of the Pandemic Boom
Part of the reason why Florida and Texas are seeing a surging housing supply is the rapid pace of home building that occurred during the COVID-19 pandemic. At the time, developers in both states built more homes than anywhere else in the country to accommodate newcomers during the pandemic homebuying boom. However, the boom is over as housing affordability boxed people out of homeownership, leaving homes sitting on the market.
"Now [buyers are] moving to North Carolina or Tennessee to get a good deal. Many local blue-collar workers have been priced out of homeownership, too," Eric Auciello, a local Redfin sales manager, said in the report.
Furthermore, Redfin noted that the high cost of insurance premiums in Florida is also part of the reason for the reduced demand for homes in the state. Florida homeowners pay the most for home insurance in the U.S., with an average rate of $11,759 projected for this year. In comparison, the projected national average is only $2,522, per MarketWatch.
READ MORE: Florida Lawmakers Propose New Bill To Reduce Home Insurance Premiums