A recent flood of homes for sale in certain communities in Florida and Texas has resulted in something considered unusual during the past four years: Price cuts.
According to a report from Redfin, the communities of Cape Coral, Fla., and North Port, Fla., saw inventory jump about 50% in the past year – while McAllen, Texas, saw its supply jump 25%.
As a result of this surge in inventory, 48% of listings in the North Port-Sarasota market had a price cut – the highest share in the country.
Other metros which have seen surges in supply during the past year include Tampa (up 44%); Indianapolis (up 43%); Denver (up 37%); Orlando (up 35%); Portland, Ore. (up 34%); Houston (up 33%); San Antonio (up 33%); and Jacksonville, Fla. (up 33%).
As a result, sellers are cutting asking prices and the time it takes to sell a home is increasing in these areas, Redfin says.
Communities where home prices dropped as a result of the surge in supply included North Port-Sarasota (down 4.6%), Oklahoma City (down 1.5%) and San Antonio (down 0.3%).
Communities where home prices were flat or leveling off as a result of increased supply included Austin, Texas (0%); El Paso, Texas (0.5%); Memphis, Tenn. (0.7%); Tampa (1.1%); Salt Lake City (1.1%); Omaha, Neb. (1.2%); and Charleston, S.C. (1.2%).
Communities where it took more time to sell a home included Cape Coral, Fla., where the typical home took 31 more days to sell than a year earlier – the largest jump in the nation.
Next came North Port-Sarasota (20 days more than a year ago), McAllen (20 days more), New Orleans (18 days more), Tulsa, OK (13 days more), Cincinnati (13 days more), San Antonio (10 days more), Greensboro, NC (8 days more), Honolulu (7 days more) and Knoxville (7 days more).
“Out-of-town homebuyers no longer see Florida as a place to get amazing value,” says Eric Auciello, a local Redfin sales manager, in the report. “Now they’re moving to North Carolina or Tennessee to get a good deal. Many local blue-collar workers have been priced out of homeownership, too.
“Two years ago, the North Port metro was one of the most competitive housing markets in the country because it was affordable for remote workers and there was a shortage of homes for sale, but none of those things are true today,” Auciello adds. “Sarasota, in particular, has been overvalued for decades, and the chickens have finally come to roost. The Tampa metro has been faring a bit better.”
Individual home sellers are having a tough time attracting buyers in part because builders are offering concessions that are hard for buyers to refuse. As a result, listings from regular sellers are sitting on the market. But homes are also sitting because many sellers are pricing their properties too high, and then being forced to cut later, Auciello says.
“The sharp ascent in Florida housing prices in recent years has driven a lot of homeowners to cash in on their equity, but some of them are having a hard time adjusting to the fact that it’s a buyer’s market,” he says. “My advice to sellers is to price your home fairly; the comps from six months ago don’t exist now. And if you’re a buyer, know that the odds of getting an offer accepted below market value are pretty high.”
Photo: Breno Assis