Xem thêm

In SW Florida, High Home Insurance Rates Are Driving Away Would-Be Buyers

CEO Khai Intela
A destroyed house following Hurricane Ian in Fort Myers Beach (Image Source) Florida's southwestern coast, once a booming region, is now facing a home-insurance crisis that is making homes unaffordable. From Sarasota to Naples, homeowners...

Stairs of a destroyed house following Hurricane Ian in Fort Myers Beach A destroyed house following Hurricane Ian in Fort Myers Beach (Image Source)

Florida's southwestern coast, once a booming region, is now facing a home-insurance crisis that is making homes unaffordable. From Sarasota to Naples, homeowners are struggling to sell their properties, causing home prices to fall rapidly. The main culprit behind this crisis is the rising insurance costs, worsened by the impact of Hurricane Ian in 2022. Many homeowners have decided to sell their homes, while potential buyers are deterred by the high insurance rates.

The region, known for its warm winters, golf courses, and affordable housing, has attracted retirees from the Midwest and newcomers from the Northeast in recent years. However, a combination of factors has dealt a blow to the real estate industry. The surge of multifamily residential projects, the slowdown in migration due to the pandemic, and high mortgage rates have created a buyer's market instead of the usual seller's market.

Florida coastline Florida coastline (Image Source)

The insurance crisis in Florida began in 2020, primarily due to lawsuits and fraud. Rates have been steadily increasing, and Hurricane Ian further escalated the situation, causing insurers to withdraw or limit policies. Floridians now pay an average of $6,000 for insurance, triple the amount they paid in 2019. In contrast, the average US homeowner paid around $1,700 in 2023.

Cities like Fort Myers have seen a significant increase in spending on home insurance. The devastating impact of Hurricane Ian led to a 50% to 100% surge in insurance expenses for homeowners in the area. While Florida legislators have taken steps to bring down rates and attract insurers, the costs remain high.

For homeowners like Cindy Blackburn, the dream of selling their Cape Coral home and moving closer to family has become unattainable. Their house was severely damaged by Hurricane Ian, and the insurance company's obstacles delayed the reimbursement process. Despite listing their home for sale, the property remained unsold. Frustrated, they are now seeking legal assistance to resolve their insurance claim.

Similar situations are occurring in other cities as well. The number of homes for sale has increased, causing a decline in prices. In some areas, median sales prices have dropped significantly, reflecting a necessary correction to prevent pricing everyone out of the market. The rise in listings is not in line with the national trend, where high mortgage rates have discouraged homeowners from moving.

Undoubtedly, affordability has become a major concern in Southwest Florida. While the increase in supply may partly be due to the resolution of insurance claims, high insurance costs and rising home prices have contributed to the situation.

Despite the challenges, Southwest Florida remains an appealing destination for many. The region's natural beauty and desirable lifestyle continue to attract attention. As the insurance crisis is addressed and the market stabilizes, the real estate industry is expected to regain its vitality.

*Please note that the original article was taken from Bloomberg, and the images used in this article are sourced from the same article.

1