Florida's COVID housing boom implodes as demand for property vanishes and extreme weather terrorizes newcomers

A years-long trend of Americans flocking to Florida for sunny weather and low taxes is coming to an abrupt end now that property demand has completely plummeted.

Relatively recent newcomers from states like New York and California are listing their homes for a variety of reasons, including the increasing number of extreme weather events the peninsula state is experiencing. 

Just this year, Florida will have been hit with at least three major storms, including Hurricanes Debby, Helene and soon, Milton, which is currently barreling toward its west coast as a Category 4 storm.

Anthony Holmes, originally from Virginia, moved to Florida in 2021 like over a million others did around the country. But now that he has to move back to Virginia, he's found it impossible to sell his home.

'I can't unload the thing,' Holmes told The Wall Street Journal. 'In eight months, I've had zero offers. No one even showed up to the open houses. Nobody.'

Holmes lives in a gated community in Tampa, which is bracing for possible direct hit from Hurricane Milton.

He paid $550,000 for the five-bedroom home before spending another $50,000 on solar panels and other interior renovations. 

When he put his home on the market in February, he expected to sell it quickly, but he's simply had no luck.

He has dropped the price five times and it now sits at $583,900. He said he'd be happy to break even at this point.

Holmes is certainly not alone in dealing with this, as some Florida condo owners have been slashing prices by up to 40 percent in recent months.

It's a remarkable reversal from 2021 through 2023, when Florida became the fastest growing state by far. The Covid-19 pandemic allowed many people to work remotely for the first time ever, making the temperate climates of the southeastern US more attractive than ever.

Now, Florida is facing a surplus of housing inventory and decreasing demand, causing homes to stay on the market longer and longer.

Inventory for single-family homes and condos in Tampa, Orlando and much of the Space Coast were up more than 50 percent in August from the year before. Over the same time period, demand has dipped 10 percent or more in these areas, the Journal reported.

Demand has been dwindling because of rising insurance costs, which is inextricably tied to natural disasters, and high home prices. 

Experts say prices - which are at all time highs in some areas - haven't caught up to buyer sentiment and are expecting a major correction just around the corner.

'It’s definitely been a sizable increase over the last couple of years in inventory, and that sets us apart from other states,' Brad O’Connor, chief economist at Florida Realtors, told the Journal. 'We could see some price deterioration in some areas.'

About half of homes for sale in Tampa have already experienced price cuts as of September 9.

People who already own homes in Florida and are trying to get rid of them are likely trying to dodge further spikes in home insurance premiums, which have risen as much as 400 percent in certain areas.

Hurricane Helene, expected to cause more than $15 billion in property damage, is bound to send premiums soaring. 

That's not even counting the damage that will be caused by Milton, as forecasters believe it will bring the highest storm surges in a century.

As a result, Florida has become one of the easiest states to snag a deal on a home - as long as you're willing to deal with the inherent risks. 

Miami Real Estate Agent Steven Kupchan told DailyMail.com in September that people are flocking to Georgia, Texas and the Carolinas. 

'With the rise of remote work, some individuals who had moved to Florida for work reasons are now considering relocating to states with lower living costs or more stable real estate markets,' Kupchan said.

Florida's condo market is also experiencing a downturn but for a completely different reason. 

Following the collapse of the Champlain Tower South in Surfside in 2021 that killed 98 people, state lawmakers passed legislation requiring all three story plus condo buildings that are 30 years old or older to undergo an inspection by a qualified architect or engineer.

If 'substantial structural deterioration' is found, the condo owner will be on the hook for the repairs and will need to come up with possibly hundreds of thousands of dollars to fix their property within a year.

The law, though well-meaning, has translated into a mad dash of owners listing their properties to avoid the December 31 inspection deadline.

Broker ISG World reports that condo units built 10 years ago or less have actually appreciated by about 9 percent more today than they did last year, while units 30 years or older are selling for 19 percent less than in 2023.

Many owners say they have to find all-cash buyers because mortgage lenders won't take on the risk. 

At the Cricket Club condominium in North Miami, two-bedroom units that were once going for $450,000 or more are now worth $200,000 at the least after residents were hit with a $134,000 assessment, the Journal reported. 

Institutional real estate investors are also attempting to extricate themselves from what appears to be a growing disaster.

In Tampa, Orlando and Jacksonville, institutional portfolios of single-family homes account for nearly one in 20 listings over the past two months, according to a Parcl Labs analysis.

In all three of those markets, institutional operators own about 2 percent to 4 percent of homes and have been net sellers over the past three months.

'When institutional investors exit a market, it can be very quick,' Jason Lewris, co-founder of Parcl Labs, told the Journal. 'If they start to ramp up dispositions, it could have a cascading effect on home prices.'