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By Chloe Mayer
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Parts of Florida's housing market are looking increasingly vulnerable to possible price declines, according to a new report.
Real estate experts at ATTOM, a property analytics firm, suggested that some counties in the Sunshine State are now among the housing markets in the country most at risk. While this could be could welcome news for some potential buyers struggling to get on the housing ladder, homeowners in those areas may well be dismayed.
ATTOM's Quarter 3 2024 Housing Market Impact Risk Report, published on Friday, showed some of Florida has joined the list of places that are home to the most at-risk counties. The report follows a string of warnings about Florida's real estate market.
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Florida experienced an overall drop of 10.2 percent in home buying from October 2023 to October 2024 amid fears of hurricane damage, higher insurance costs and new safety regulations, and homes generally took longer to sell, according to a recent report by Redfin. But the median sale price for the whole state was still up 1.3% year on year to $410,000, according to Redfin, and the National Association of Realtors told Newsweek that it doesn't expect to see price declines.
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Experts are warning that Florida may face an exodus of residents as homeowners baulk at insurance costs being driven up by extreme weather. Recent storms Helene and Milton, which arrived within a fortnight of one another, have already resulted in $1.4 billion and $2.4 billion worth of damage, respectively.
Embattled homeowners will be concerned that experts are now identifying some Florida counties as being among the most troubled housing markets in the country. Two-thirds of the 50 counties around the U.S. considered most exposed to potential fallbacks were concentrated in California, Illinois, New Jersey and Florida.
"Notably, Florida joined this group in the third quarter, marking a shift from earlier periods when fewer of its markets were categorized as being at higher risk of downturns," ATTOM reported.
Some 578 county-level housing markets were assessed for the latest report. The analysis "shows that California, New Jersey and Illinois once again had high concentrations of the most-at-risk markets in the country, with parts of Florida also joining that mix," ATTOM said. Some counties "in or near New York City" also made the list, the firm said.
Researchers studied various trends in third-quarter figures to compile their report. Factors included so-called underwater mortgages (where residents owe more on their home loan than the estimated value of their property), foreclosures and unemployment rates.
The least at-risk counties were to be found in the South, although some counties in the Midwest, Northeast and West of the country were also robust, according to ATTOM.
"The recent market risk patterns changed a bit in the third quarter, with some new areas making the list of places more or less exposed to downfalls," ATTOM CEO Rob Barber said. "But the big picture remained pretty much the same around the country as differences in important metrics helped produce varying pockets of vulnerability.
"As with past reports, this one is not meant to suggest any given area is about to fall or is immune from problems. Rather, it spotlights locations that look to be more or less able to withstand significant changes in market conditions. We will continue to keep a close watch on markets throughout the country to see how things track."
Despite the new warnings being sounded about some counties in Florida, the Sunshine State did not feature in the top 10 counties most at-risk. That dubious honor went to California (which took seven of the 10 top spots), New Jersey and Indiana.
Newsweek reached out by email to ATTOM seeking further information about which counties in Florida were deemed to be among the 50 most at risk in the U.S.
The firm has already revealed that Florida's Marion County is among those with the highest percentage of underwater mortgages, at 11 percent. Nationwide, 5.5 percent of mortgages fall into that category.
And Florida's Charlotte County has some of the highest foreclosure numbers, with one in every 449 residential properties facing possible foreclosure. Nationwide, one in 1,618 homes were in that position.
Still, the National Association of Realtors told Newsweek that "nearly all markets" are on firm ground, and markets that dip may be experiencing "a temporary decline before heading up again."
Lawrence Yun, chief economist and senior vice president of research at the National Association of Realtors (NAR), told Newsweek: "Home prices are on firm ground in nearly all markets. Some markets with unique circumstances may experience a temporary decline before heading up again, which occurred in Boise, ID, last year.
"As the country faces a broad inventory shortage – with listings still about 30% below pre-Covid levels and 2019 conditions – continuing job gains and a likely stabilization in mortgage rates, nearly all markets will experience a modest rise in home prices or stable conditions. It's very doubtful that there will be any meaningful price declines in any of the markets mentioned, unless a local market is undergoing massive job losses, which is not the case."
Update 12/09/24 at 12:46 p.m. ET: This article was updated to include comments from the National Association of Realtors.
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