Florida's trends and hypothesis'

[Joseph Davini]

Hi all, new to the forum and just wanted to gain some insight on the fl market pertaining to some things I have heard on the topic. It is no secrete that recent property listings and price of said listings are not meeting the buying power of these areas. I came across a random podcast talking about FL's market crashing due to inflated cost with too low of a demand, along with refusal to cover storm/hurricane from insurance agency ( I admit I haven't researched the truth behind this one), assuming it pushes owners/investors to go to private thirds at a massive premium. Ultimitly pushing residents and investors north. I'm just wondering what you guys have for predictions based on what you've seen first hand...Thanks! 

[Chris Grenzig]

Quote from @Joseph Davini:

Hi all, new to the forum and just wanted to gain some insight on the fl market pertaining to some things I have heard on the topic. It is no secrete that recent property listings and price of said listings are not meeting the buying power of these areas. I came across a random podcast talking about FL's market crashing due to inflated cost with too low of a demand, along with refusal to cover storm/hurricane from insurance agency ( I admit I haven't researched the truth behind this one), assuming it pushes owners/investors to go to private thirds at a massive premium. Ultimitly pushing residents and investors north. I'm just wondering what you guys have for predictions based on what you've seen first hand...Thanks! 

 @Joseph Davini I'm more in the multifamily space than single-family space, we own and operate a few multifamily properties in Jacksonville but we do manage some single-family rentals as well, so I'll be speaking from that space. New supply hit all-time highs or very close to it for many cities in the state. While Florida still has great population and job growth and the economy is overall in good shape with low unemployment, we had more supply than we've had in years and it hit places. Rents stagnated or dropped in most areas, and this is on top of all the rising costs, especially insurance and interest rates. The market is kind of in a stalemate with owners who aren't forced or want to sell just holding on, and buyers waiting for deals at prices that make sense. There hasn't been this huge wave of foreclosures or short sales as people are hanging on, doing cash-in refi's or doing work outs with lenders. There are definitely some deals being foreclosed on, but it's the minority and it's happening slowly. 

From a single family buying perspective, my only experience has been buying a new home 6 months ago, selling our current home, and talking with people I know. My impression is everyone thinks costs are up, more and more people are fine with renting right now, and those that want to buy new homes aren't in as much of a rush. One family member wants to move to get into better schools, but they don't want to give up their 4% rate and they're fine right now to continue to hold off, keep looking and wait for the next couple for years. 

My insurance guy for the past 2.5 years has been at wits end because he had to continue to deliver bad news on referrals and estimates for new properties. Only in the last 3-4 months has he said he's seen some light at the end of the tunnel and they're starting to see minor insurance premium relief on properties, but it's for the best of the best assets (New construction, concrete block, 250+ units, etc). Eventually we kind of both agreed this will trickle down to other assets (speaking from the multifamily side), so I would imagine a similar thing will happen with single family. Insurance is a market like any other. I think it will swing back, but I doubt we're getting back to 2018 levels given the rise in asset prices, rise in construction costs, material costs, labor costs, etc.