In Pasco County, where I was once known as Mr. Pasco, we have over a dozen communities that are in big trouble, and the residents don’t know.
Holiday Lake Estates, Key Vista, Beacon Square, Green Key Estates, are some of the neighborhoods New Port Richey and South. I will discuss the northern neighborhoods in another post.
Many of these homes are owned by working class homeowners, many are retirees on a fixed income. If they have a mortgage, they have flood insurance. As you know if you have been reading my blog, flood insurance is going to be a curse on Florida real estate.
Regular hazard insurance and flood insurance rates are soaring. One home I manage went from $1800 a year to over $4100 a year. A $740 a month payment went up to over $1100 a month. (It also had a substantial tax increase).
Owners on a fixed income or wage earners on the lower income scale are going to find their payments unmanageable. Especially if their flood insurance goes from $200-$300 to $500-$700 a month or more.
Interestingly, Citizens Insurance, over the next 12 months is going to require all homeowners that buy hazard insurance to by flood insurance, even if the home is not in a flood zone. This will have an effect of delaying the tipping point for an insurance based real estate correction.
As flood insurance and hazard insurance costs rise, homeowners without the resources to cover the increased costs are going to be forced to sell.
When the number of homeowners reach the point where they can no longer afford the increases, we will see 100’s and then 1000’s of sellers. Who will buy all this real estate?
Now the market is tight. There are around 1880 residential properties today, June 19, 2023. 1305 are not in a flood zone.
I predict that homeowners in flood zones will look back on this time and wish they had the foresight to sell.
Randy 727-409-4663 (409-home).
Randal Jenkins
Rocket Mortgage NMLS #205-3417
Florida Real Estate Partners
4823 Ebbtide Lane 206
Port Richey Fl 34668
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