Florida Was Seen as a Good Place to Live
Before Florida’s housing crisis, it was considered an excellent place to live. Known as the Sunshine State, its beaches and vibrant communities drew people from all over the U.S. to Florida.
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It was also seen as attractive due to its house prices, which were previously lower than in other U.S. states, such as California. However, the climate crisis has thrown all this out of the window.
How Does Climate Change Impact Florida?
While climate change is creating issues worldwide, Florida is one of the U.S. states severely affected by it. This is primarily due to its already hot climate and the fact that many of its residents live by or near the sea.
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Some of the climate issues Florida faces include coastal erosion, flooding and an increase in extreme weather. Miami is one example of the climate crisis due to rising sea levels in the city.
Florida Home Insurance Is Skyrocketing
Home insurance premiums have become so bad in Florida that they have attracted the attention of real estate investors. This makes it difficult for buyers to secure a mortgage, which then makes it difficult for homeowners to sell up.
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Florida’s average home insurance cost is $4,200, compared to the national average of $1,700. This is just a small insight into what the real estate crisis in Florida looks like.
Insurance Companies Are Seizing Homes
The issue with home insurance premiums has become so bad that insurance companies have seized people’s homes, forcing Florida residents to live in their cars.
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It’s not even the odd one or two homes being seized, as tens of thousands of homes have been seized by insurance companies. This isn’t a surprise, with 70% of Florida residents struggling to keep up with their home insurance premiums.
Record House Cancellations
Home insurance prices contribute to the record-breaking number of buyers canceling their home purchases. Due to the rate at which this is happening, it has caused many complications in the real estate sector.
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In June 2024 alone, 56,000 home purchase agreements were pulled out of. This accounts for 14.9% of all homes under contract in that period and is the highest percentage of monthly house cancellations.
$30 Billion in Loss for Coastal Properties
It has been predicted that by 2030, there will be around $30 billion in losses for Florida’s coastal properties. This is due to climate change causing a rise in sea levels.
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Florida is one of the areas more vulnerable to climate change due to its location by the coast. Real estate agents used to find it easy to sell a sea-view property, but now they are struggling.
Florida’s Low-Lying Coast
One of Florida’s main issues is its low-lying coast. Rising sea levels make it easier for them to cause damage throughout the region, especially to houses and buildings on the coast.
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The Sunshine State has 8,400 miles of shoreline and 4,500 square miles of bays and estuaries. Twenty million of Florida’s residents live within a 60-mile radius of the coast, so their homes are highly likely to be affected by extreme weather.
The Issue for Coastal Homes
The main issue for coastal homes is that their value is decreasing. Rising sea levels and an increase in extreme weather conditions can cause structural damage to properties on the coast.
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While coastal property owners might think it would be better to sell up, they can’t. There has been a significant decrease in interest in coastal properties, mostly due to the worry of how much damage will happen to the property and how much it will cost to resolve.
Regulatory Changes Caused by Climate Change
Climate change has become so severe in Florida that regulatory changes have been made to buildings to try to decrease the severity of the impact of the climate crisis.
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These regulatory changes include stricter building codes and zoning regulations. However, it is widely believed that these changes will decrease property values and development opportunities in various areas.
Trying to Be Proactive
Various construction companies are trying to be proactive regarding climate change. This includes raising building foundations and improving drainage systems.
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Being proactive is essential when it comes to climate change, as the longer these things are left, the worse the effects will be. While it doesn’t eliminate the risk, it does make some properties more resilient and appealing to potential buyers.
The Importance of Real Estate Agents
Being knowledgeable about the climate crisis is essential for real estate agents. It’s crucial they don’t lie to their clients regarding the extent of the crisis to enable them to make informed decisions.
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However, with the right amount of knowledge and being up-to-date on market trends, real estate agents can help sellers and buyers navigate the climate crisis to rebuild the stability of Florida’s real estate landscape.