Florida condo market sinking on the back of their insurance crisis?

[pdq]

Perhaps this is being a bit overly dramatic, but:

Florida House Prices Fall as Homeowners Desperately Try to Sell

The number of "motivated sellers" in Florida has grown in the past two weeks, as more homeowners are trying to offload their properties quickly amidst a worsening of the state's insurance crisis.

…According to data shared on ResiClub, Florida's active home-for-sale inventory increased by 45.8 percent year-over-year in February, while Texas's increased by 22.8 percent. At a nationwide level, inventory rose by 15.0 percent in the same period.

I haven’t seen that the Florida insurance crisis has become a real estate crisis yet, but these things can reach a tipping point pretty quickly.

On the other hand, up here in Wisconsin, there was a sale of an entry-level distressed property by the court whose long-time owner with dementia let the two dogs just pee in the house. Ask price of $195K for ~900 sf, newish windows, recent furnace + water heater, but the ugliest mess I’d ever seen; water dripping from the only toilet through the floor to the basement. Wouldn’t allow a house inspector. Cash offers only.

It gathered 17 offers over 4 days and sold for over $260K (haven’t heard the final price yet).

Weird days in real estate.

[rgG]

I have heard that it is getting really hard to insure properties in FL, so I am not surprised.
Might be a good time to snap up a vaca home, if you could figure out a work around, if there is one.

[mattkime]

pdq wrote:
On the other hand, up here in Wisconsin, there was a sale of an entry-level distressed property by the court whose long-time owner with dementia let the two dogs just pee in the house. Ask price of $195K for ~900 sf, newish windows, recent furnace + water heater, but the ugliest mess I’d ever seen; water dripping from the only toilet through the floor to the basement. Wouldn’t allow a house inspector. Cash offers only.

I gotta think there are a few details missing from that story. Thats pretty close to the going rate of a nice house in a good neighborhood in Madison.

[Ca Bob]

As others have pointed out (including television national news) this is the result of global warming which results in more violent storms which results in increased property damage. Or as I have put it, The Gulf is Toast.

[Ombligo]

I'm holding my breath for this coming storm season. The Gulf of Mexico and the Atlantic aren't bathtubs, they are spas. Add in a La Nina forming up and it could be very ugly.

Meanwhile, the state legislature made a bold step to save insurance, they made it essentially impossible for homeowners to sue them if they don't pay up.

[Mr645]

Also a massive inventory of new condos recently built or being built.
Insurance rates have peaked and at least 6 new companies have applied to enter the Florida insurance market, they will start writing probably on November 1st 2024 after storm season ends.
Desantis has done several steps to reel in rising insurance rates 1) set up a $2 billion reinsurance fund to lower the cost of reinsurance to insurance companies 2) banned the practice of assigning benefits to others. Where a homeowner filing a claim assigns benefits to a contractor or lawyer, who promises to fix the damage but then sues the insurance company for as much as they can. That's over and 3) no more filing claims years after a storm. You have 24 months now. Again, end the gaggles of lawyers doing "home inspections" and filing claims for 3, 5, 8 years after a storm passes.

Now interest rates for loans is still a big issue

[cbelt3]

It’s not just insurance. It’s decades of HOA’s not maintaining the buildings or maintaining sufficient reserves, coupled with insurance rates skyrocketing, in part because ONE HOA really screwed up and a lot of people died when the building collapsed.

Climate change and worsening storms is a small statistical part of it. It’s human greed.

[sekker]

Ombligo wrote:
I'm holding my breath for this coming storm season. The Gulf of Mexico and the Atlantic aren't bathtubs, they are spas. Add in a La Nina forming up and it could be very ugly.

Meanwhile, the state legislature made a bold step to save insurance, they made it essentially impossible for homeowners to sue them if they don't pay up.

Not just Florida. We had a hail storm in Minnesota. Our roof was damaged (our daughter's car was totalled 80 miles away). This was caught during an inspection to sell our house. Was clear.

State Farm did their best to wait us out, forcing us to eat the cost of the new roof while sending and then failing to send, over and over again, the claims adjuster.

We have been paying State Farm homeowner's insurance since 1998. This was our first claim.

In the end, I escalated and told them - if they will not even process the claim (which required me to pay them $1000 to do so!), we were moving off State Farm. Including our entire family's car insurance policies, too.

Took them 2 months, they made good. But if we had only been with them a few years, I doubt they would have.

[Mr645]

cbelt3 wrote:
It’s not just insurance. It’s decades of HOA’s not maintaining the buildings or maintaining sufficient reserves, coupled with insurance rates skyrocketing, in part because ONE HOA really screwed up and a lot of people died when the building collapsed.

Climate change and worsening storms is a small statistical part of it. It’s human greed.

Yes, Florida now requires more frequent structural inspections. Many condo associations have had to increase dues to cover these inspections

[mattkime]

Mr645 wrote:
Yes, Florida now requires more frequent structural inspections.

seems to go against everything the state stands for.