15 Housing Markets at Risk: Florida Takes the Spotlight



Parcl Labs recently conducted an in-depth study to identify housing markets with the highest risk of home price corrections. The results are eye-opening, especially for Florida, where 13 out of the 15 markets labeled as "at risk" are located.


The Risky Markets:

Here are the 15 markets that Parcl Labs has flagged as having the highest correction risk:


1. Crestview-Fort Walton Beach-Destin, FL

2. Daphne-Fairhope-Foley, AL

3. Deltona-Daytona Beach-Ormond Beach, FL

4. Gainesville, FL

5. Homosassa Springs, FL

6. Lakeland-Winter Haven, FL

7. Miami-Fort Lauderdale-Pompano Beach, FL

8. Myrtle Beach-Conway-North Myrtle Beach, SC

9. Naples-Marco Island, FL

10. Ocala, FL

11. Orlando-Kissimmee-Sanford, FL

12. Palm Bay-Melbourne-Titusville, FL

13. Port St. Lucie, FL

14. Sebastian-Vero Beach, FL

15. Tampa-St. Petersburg-Clearwater, FL


Why Florida?



Florida stands out as the epicenter of this housing market risk. Let's explore why:

1. Hurricane Impact: Hurricane Ian in September 2022 caused additional softening in Southwest Florida, affecting inventory dynamics.

2. Insurance Premiums: Spiked home insurance premiums have strained affordability, exacerbating the situation.

3. Condo Pressures: Changes following the Surfside condo collapse in 2021 put downward pressure on older condos along Florida's coastline.

Parcl Labs' Methodology:

Here's how Parcl Labs conducted their analysis:

Data Collection: They gathered data from the 1,000 largest U.S. housing markets using the Parcl Labs API.

Inclusion Criteria:

   - Markets with declining demand (home sales) by more than -10% on a rolling 3-month average.

   - Markets with increasing supply (active inventory) by more than 20% on a rolling 3-month average.

   - Markets showing signs of stress (35% or more inventory with price reductions).

   - Markets where home prices remained at least 50% higher since March 2020.

   - Exclusion of markets already experiencing significant price corrections.

3. Emerging Weakness: Jason Lewris, co-founder of Parcl Labs, notes that the observed supply-demand imbalances and increased price cuts are now translating into actual price declines. Tampa and Miami, high-performing markets, are particularly vulnerable.

In summary, Florida's housing markets face challenges, and the cracks may be widening. Keep an eye on these trends—they could signal the early stages of a market correction. 🏠📉




Sources:

(1) Florida Housing Market 'at Risk' in 13 Different Cities. https://www.msn.com/en-us/money/realestate/florida-housing-market-at-risk-in-13-different-cities/ar-BB1pbTGC.

(2) Florida Housing Market 'at Risk' in 13 Different Cities. https://www.newsweek.com/florida-housing-market-risk-13-different-cities-1919331.

(3) Regional Divergence in US Housing Market Accelerates in Q1. https://www.parcllabs.com/articles/regional-divergence-in-us-housing-market.

(4) Q3 R.E. Prices Decline Significantly, Creating a Dilemma ... - Parcl Labs. https://www.parcllabs.com/articles/q3-real-estate.

(5) Amid a climate crisis, some good news for Florida’s housing market. https://www.housingwire.com/articles/amid-a-climate-crisis-some-good-news-for-floridas-housing-market/.

(6) Florida Housing Market Crash: 2 Cities on High Risk of Decline. https://www.noradarealestate.com/blog/is-florida-housing-market-facing-a-crash-2-areas-show-high-risk/.

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