Florida’s COVID real estate boom is imploding as demand for real estate dwindles and extreme weather terrorizes newcomers

The years-long trend of Americans flocking to Florida for its sunny weather and low taxes is now coming to an abrupt end as real estate demand has completely collapsed.

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.

This year alone, Florida will be hit by at least three major storms, including Hurricanes Debby, Helene and soon Milton, which is currently heading toward the West Coast as a Category 4 storm.

Anthony Holmes, originally from Virginia, moved to Florida in 2021, like over a million others across the country. But now that he has to return to Virginia, it is impossible for him to sell his house.

“I can’t dump this thing,” Holmes told the Wall Street Journal. “In eight months I had zero offers.” Nobody showed up at the open days. No one.’

Anthony Holmes lives in a five-bedroom home in a gated community in Tampa (Image: A five-bedroom, two-bath home in Tampa selling for nearly $800,000)

Ultra wide angle view of Aventura, Golden Beach and Sunny Isle Beach, Florida, on a sunny spring day

Holmes lives in a gated community in Tampa that is preparing for a 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 house on the market in February, he expected to sell it quickly, but he just wasn’t having any luck.

He has reduced the price five times and is now at $583,900. He said he would like to break even at this point.

Holmes is certainly not the only one struggling, as some Florida condo owners have slashed prices by as much as 40 percent in recent months.

It’s a remarkable turnaround from 2021 to 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 climate of the southeastern United States more attractive than ever.

Now Florida is facing an oversupply of housing and declining demand, causing homes to stay on the market longer and longer.

This home, also in Tampa, saw a $76,000 price cut on July 23 and has been on the market for a whopping 177 days

Single-family home and condo inventory in Tampa, Orlando and much of the Space Coast rose more than 50 percent in August from a year earlier. Over the same period, demand in these areas has declined by 10 percent or more, the Journal reported.

Demand has fallen due to rising insurance costs, which are inextricably linked to natural disasters, and high real estate prices.

Experts believe that prices – which are at all-time highs in some areas – have not caught up with buyer sentiment and are expecting a significant correction soon.

“Inventory has definitely increased significantly over the last few years, and that sets us apart from other states,” Brad O’Connor, chief economist at Florida Realtors, told the Journal. “We could see a drop in prices in some areas.”

About half of Tampa’s homes for sale have already seen price drops since Sept. 9.

People who already own a home in Florida and are trying to get rid of it are likely trying to avoid another increase in homeowners insurance premiums, which have risen by as much as 400 percent in certain areas.

Hurricane Helene, expected to cause more than $15 billion in property damage, is bound to drive up premiums (Image: Aerial view of post-Helene damage in Horseshoe Beach, Florida)

Pictured: Boats crash into homes and businesses in Treasure Island after Helene brought record-breaking storm surges to Florida’s west coast

Trees and debris lay on the beach at Treasure Island as people follow Helene’s landing

Hurricane Helene, which will cause more than $15 billion in property damage, is bound to send premiums skyrocketing.

That doesn’t even take into account the damage Milton will cause, as forecasters expect storm surges to be the highest in a century.

As a result, Florida has become one of the easiest states to get a deal on a home in – as long as you’re willing to accept the risks involved.

Miami real estate agent Steven Kupchan told DailyMail.com in September that people were flocking to Georgia, Texas and the Carolinas.

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

Florida’s condo market is also experiencing a downturn, but for a very different reason.

After the Champlain Tower South collapse in Surfside in 2021, which killed 98 people, state lawmakers passed a law requiring all three-story condominium buildings that are 30 years old or older to undergo an inspection must be subjected to a qualified architect or engineer.

Pictured: The Champlain Tower South after its collapse on July 1, 2021

Many high-rise condominiums, like this one in Tampa, will soon be subject to costly assessments thanks to the new law. The owners are trying to sell before the December 31 inspection deadline

If “significant structural deterioration” is found, the condo owner will be required to make the repairs and may have to fork out hundreds of thousands of dollars to repair their property within a year.

While the law is well-intentioned, it has led to a mad rush of owners listing their properties to avoid the Dec. 31 inspection deadline.

Realtor ISG World reports that condos built 10 years ago or less are actually worth about 9 percent more today than last year, while units 30 years or older are selling for 19 percent less than last year Year 2023.

Many homeowners say they have to find buyers who will pay all cash because mortgage lenders won’t take on the risk.

At the Cricket Club condominium in North Miami, two-bedroom apartments that once cost $450,000 or more are now worth at least $200,000 after a $134,000 tax was imposed on residents, the Journal reported .

Institutional real estate investors are also trying to free themselves from what appears to be a growing catastrophe.

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

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

“When institutional investors exit a market, it can happen very quickly,” Jason Lewris, co-founder of Parcl Labs, told the Journal. “If they start increasing their dispositions, that could have a cascading effect on property prices.”