Hurricanes Devastate Florida, Impact Home Sales: Major Declines in Four Metros

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As hurricane season continues to wreak havoc in Florida, the housing market in several major metropolitan areas has seen a significant decline in pending home sales. Recent hurricanes, Helene and Milton, have caused extensive damage, disrupting the market and dampening buyer demand across the state.

According to a recent Redfin report, pending home sales in West Palm Beach experienced the most drastic year-over-year drop among the 50 most populous U.S. metros during the four weeks ending October 6, with a decline of 17.6%. Other affected Florida metros include Tampa (-15.5%), Miami (-14.8%), and Fort Lauderdale (-12.8%). The substantial impact in Florida is largely attributed to Hurricane Helene, which made landfall on September 26 and caused billions in damage, marking it as the deadliest hurricane to hit the U.S. mainland since Katrina, according to the U.S. Department of Homeland Security.

However, the decline in housing demand along Florida's coast isn't solely due to recent hurricanes. For months, rising homeowners insurance and HOA costs, driven by increasing climate-related risks, have deterred buyers. Many private insurance companies have stopped offering policies in Florida, particularly for flood coverage. The National Flood Insurance Program (NFIP), managed by FEMA, remains the primary provider of flood insurance, covering up to $250,000 for single-family homes and $100,000 for contents. Yet, according to Realtor.com, much of the $48 billion in property damage caused by Hurricane Helene remains uninsured.

National Trends Contrast Florida’s Decline

While Florida’s market struggles, other parts of the U.S. are experiencing growth. Redfin reports that pending home sales increased in 32 of the 50 most populous U.S. metros in the same period. This boost follows the Federal Reserve's interest rate cut in late September, which spurred buyer activity despite fluctuating mortgage rates.

Shoshana Godwin, a Redfin Premier agent in Seattle, notes that buyers are closely watching interest rates, but so far, rate fluctuations have not slowed down activity. “I advise buyers to make an offer if they find a home they love. Trying to time the market can be risky,” she said.

Nationally, pending home sales rose 2% year-over-year, the largest increase in three years. Mortgage-purchase applications increased by 8% month-over-month, and new listings grew by 5.7% compared to the previous year. The largest annual increases occurred in Phoenix (14.1%), Seattle (12.3%), San Jose, CA (11.6%), San Antonio (11.6%), and Virginia Beach, VA (11.2%).