Pasco County is an example of what is happening in Central Florida and the statistics and trends sited are a microcosm of the general trends for the area.

As covid started we entered an era, that I call the insanity period. 2.5 years of real estate, that we have never seen. 15-25-30 offers on new listings that appeared to be well priced. Offers $20k-$30k-$50k over the asking prices. Offers not dependent on inspections, not dependent upon appraisals, sight unseen offers. The insanity period.

In Pasco County there were around 3000 residential listings. 2300 or so under contract, leaving sometimes under 700 residential listings to choose from. When interest rates started rising, there were around 100 new net listings per week. This rose to over 2800 active listings. Just under 5000 total listings with around 2000 or so pending listings.

In the last 5 weeks we have seen the number of active listings drop by nearly 100 a week. Today Feb 25, 2023, there are 2223 active listings, 2312 pending listings and the 30-day solds around 1220.

What is happening? Interest rates doubling from 2.75% to 5.5% and now around 6.5% slowed buyer exuberance, more sellers put their homes up for sale, and the market slowed down with transactions falling 40% or so.

Yet prices have not dropped much. Under 5% in most categories and virtually no drop in some, try buying a 3/2/2 pool home, you won’t see any discounts.

WHY?

Why is the Florida market and central Florida in particular so strong?

Why does Florida’s population keep rising? Jobs. Weather. No state income taxes. Politics?

Look at the alternatives. Cold, violently cold winters in the North. Wildfires, earthquakes, high taxes in California. Water shortages in Colorado, Nevada, Arizona, California and throughout the southwest. Devasting tornadoes from Oklahoma to Alabama. Landslides and flooding in the Carolina’s, West Virginia, Tennessee and the mid-eastern states. Extreme weather in the Northwest. Snow in southern California. It’s a mess.

Yes, but Florida has hurricanes. We get at least 2 days’ notice.

What is going to change the attractiveness of Florida real estate?

Home insurance and flood insurance is the Florida real estate markets biggest challenge.

I will talk much more about this in future blogposts.

Thank you for reading this post.

(Randal Jenkins, is a Realtor, Mortgage Loan Officer and president of a Real Estate investment company. After spending 18 years in the financial services industry, Randal has devoted the last 23 years to Real Estate.)