Real estate property in Florida – Courtesy: Shutterstock – Image by Kristi Blokhin
According to a recent Redfin research, as unsold properties begin to accumulate in certain of the state’s markets, Florida is witnessing the largest amount of property acquisitions that fail.
The Significance of It
Most real estate analysts predict that as inventory increases and buyers remain cautious due to high mortgage rates, home values in Florida will drop and maybe fall this year.
Some of the Sunshine State’s most overpriced markets are already seeing notable slowdowns and are moving in favor of buyers. These markets grew during the epidemic years when out-of-state residents relocated to Florida’s sunny cities.
Things You Should Know
According to Redfin, over 41,000 home-purchase agreements nationwide failed in January, accounting for 14.3 percent of all homes under contract during that time. It was the biggest cancellation rate for this time of year since 2017, when the real estate agency began keeping track of such figures, and it was up 13.4 percent from the previous year.
According to Redfin, the busiest time of year for homebuying, spring, usually sees less cancellations of pending purchases than the end of the year. The January cancellation rates are lower than the peaks seen in late 2022 and at the beginning of the epidemic, but they are still more than usual for this time of year.
According to Redfin, Florida had the largest percentage of cancellations last month. With 18.2 percent of pending home purchases going through, Orlando had the second-highest percentage of cancellations in the nation, after Atlanta, Georgia, up from 16.8 percent the previous year.
With 17.8 percent of home transactions canceled, Jacksonville had the fifth-highest share, up from 16.4% the previous year.
In addition to the rising risk of more frequent and severe natural disasters, as well as rising home insurance and homeowners association (HOA) dues, the Sunshine State’s property market is cooling down as a natural correction after years of boom during the pandemic.
Redfin reports that “some Florida buyers are backing out of deals because there’s so much inventory available; in fact, there are more homes for sale in the state than ever before.”
In some areas of the Sunshine State, real estate brokerage agents claim that “more supply means buyers have license to be fickle: if an issue comes up during the inspection period, some buyers are backing out because they know they can pivot to buy another home that doesn’t have that issue.”
According to Redfin data, Florida had 172,209 properties for sale at the end of January, the most of any month since 2021 and up 22.7 percent over the previous year.
What Individuals Are Saying
In a statement that accompanied the study, Redfin Premier agent Sam Brinton of Salt Lake City, Utah, stated: “I’m seeing more homebuyers back out of deals than usual, and I’m hearing the same from other agents and mortgage lenders in the area,” Brinton added. With everything going on in the world, some purchasers are changing their minds. However, there are more purchasers overall even though there are more cancellations. These purchasers are less likely to back out, and the lovely properties in sought-after areas are selling fast.
“It’s worth checking in with the listing agent about a week after the house goes under contract,” stated Alison Williams, a Sacramento Redfin Premier agent. My clients were able to get their bids accepted before the house was put back on the market, and I’ve learned twice since the year began that the initial bidder canceled the deal.”It’s
What Follows
Most analysts predict that Florida will have a slight price adjustment in 2025. Naples real estate agent Ed DiMarco predicts modest decreases in some areas this year, particularly those with an excess of available homes, but that the state’s tax-friendly laws and ongoing population growth would “help prevent steep drops in home values.”
By the end of the year, Florida’s median home prices are expected to rise by 4 to 6 percent year over year, according to researchers at Norada Real Estate Investments. However, if mortgage rates rise, some locations may experience sharp price corrections.
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Chris began his writing as a hobby while attending Florida Southern College in Lakeland, Florida. Today he and his wife live in the Orlando area with their three children and dog.
