WEST PALM BEACH, Fla. (CBS12) -- The Florida housing market is experiencing significant challenges, with West Palm Beach among the hardest-hit areas, according to a housing report by Redfin.
Pending home sales in West Palm Beach dropped by 13.8% year over year during the four weeks ending November 10. This decline is part of a broader trend affecting several major cities in Florida, including Fort Lauderdale, Miami, Jacksonville, and Tampa.
The decline in pending sales is largely attributed to the aftermath of a destructive hurricane season, according to the report.
Hurricanes Helene and Milton caused widespread damage across the state, making existing issues in the housing market worse. In addition to the physical damage, these natural disasters have led to a surge in home insurance costs and homeowners association (HOA) fees, further straining the budgets of Florida residents, the housing report indicates.
Florida's housing market has been slowing down for months because of frequent natural disasters and the financial problems they cause, the Redfin reports. The recent hurricane season was active, with Hurricane Helene hitting northwestern Florida on September 26, making it the deadliest storm in almost 20 years. Two weeks later, Hurricane Milton hit Central Florida, making things more difficult for Florida homeowners.
The financial impact of these storms has been significant. The report states home insurance costs and HOA fees have surged, driven by the increasing risk of climate-related disasters. This has made homeownership more expensive and less accessible for many Floridians. The state is also facing a housing affordability crisis, with home prices and property taxes remaining significantly higher than pre-pandemic levels.
Additionally, the report indicates in Tampa pending home sales fell by as much as 32.2% during the four weeks ending October 20, but have since rebounded to a 7.2% year-over-year decline. Similarly, Orlando has seen a reduction in the rate of decline, with pending sales now down just 5.1%.
Real estate experts remain cautiously optimistic about the future. While the market is currently slow, experts say there is still some demand for vacation homes. However, first-time buyers are particularly hesitant due to high housing costs and uncertainty around the upcoming election. The condo market is also struggling, with many units sitting on the market for over a year due to high HOA fees and insurance costs, as well as new regulations implemented after the Surfside condo collapse.
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In conclusion, the Florida housing market is navigating a complex landscape of natural disasters, rising costs, and economic uncertainty. While some areas are beginning to recover, the overall market remains challenging for both buyers and sellers.