HGTV ‘Flipping 101’ host Tarek El Moussa joins ‘FOX & Friends’ to discuss the slight decrease in mortgage rates, and explain how that will impact the real estate market.
Florida’s real estate market has been hammered by high home prices and surging insurance costs.
Home values nationwide are also expected to rise modestly this year, adding to the current affordability crisis in the state, according to a recent report.
But despite the uptick in prices, at least three cities in Florida are projected to see a decline, according to a report from Realtor.com, which cited real estate analytics company Cotality.
HOW ELIMINATING PROPERTY TAXES IN FLORIDA COULD AFFECT THE STATE’S REAL ESTATE MARKET
Those cities, Tampa, Winter Haven and West Palm Beach, have a 70% chance of seeing prices fall, according to the real estate analytics company. The report categorized them at “very high risk” of price declines, underscoring how the market is adjusting after a run-up in prices in recent years due to soaring demand.
A house for sale in the Aqualane Shores neighborhood of Naples, Florida. (Lisette Morales McCabe/Bloomberg via Getty Images / Getty Images)
Migration to the state has since slowed. High home prices, rising mortgage rates and increasing insurance costs have significantly dampened buyer demand since 2022, according to Hannah Jones, senior economic research analyst at Realtor.com.
Insurance costs in many parts of the state have jumped due to the risk of property damage from a climate-related event. ValuePenguin — a personal finance website and a subsidiary of LendingTree — reported that homeowners in Florida pay some of the highest rates in the country, with the average cost of home insurance sitting at $2,207 per year.
Naples Municipal Beach in Naples, Florida. (Paul Harris/Getty Images / Getty Images)
WHY THIS RESORT AREA IN FLORIDA IS BECOMING MORE POPULAR FOR HOMEBUYERS
“Piling expensive insurance costs on top of still-high home prices and elevated mortgage rates has pushed the cost of homeownership in Florida out of reach for many would-be buyers,” Jones said. “Last year’s catastrophic weather events in Florida may remain front-of-mind for home shoppers, which could lead them to consider other places to put down roots.”
A home for sale in West Palm Beach, Florida. (Marco Bello/Bloomberg via Getty Images / Getty Images)
As residents face so much financial strain, Florida Gov. Ron DeSantis hinted on social media that he would support abolishing such taxes throughout the Sunshine State, but that it would require a constitutional amendment.
“Property taxes are local, not state. So we’d need to do a constitutional amendment (requires 60% of voters to approve) to eliminate them (which I would support) or even to reform/lower them…” DeSantis posted on X.
Meanwhile, Jones said that inventory has built up significantly across Florida “as newly built residences worked their way through the pipeline.”
This could be a good sign for prospective buyers as “ample for-sale inventory relative to buyer demand suggests that home prices will continue to fall as sellers try to attract buyer attention.”
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Jones said that home prices will likely continue to level off as the market searches for balance, but since Florida is a large housing market, it will take time for dynamics to shift.
“Over the last three years, inventory has recovered and prices have eased, signaling that the market is returning to balance,” she said.
