In a post-pandemic world, the hot metropolitan areas sometimes called “pandemic darlings,” namely those of Texas and Florida, are no longer so. Some of their buying and rental markets have changed as demand has cooled – and whether that’s for better or worse depends on who you are in the housing market.
Earlier this month, analysis from Redfin found that home prices are down in four major metro areas nationwide compared to the previous year; three are in Texas. Home prices fell 2.9% in Austin and 1.2% in San Antonio and Fort Worth. But nationally, prices are rising.
The Sunbelt is also seeing some of the biggest rent declines. In Austin, the median asking rent fell 6.6% in April from a year earlier and 7.2% in May from a year earlier, according to Redfin, as Fortune has Previously reported. In Jacksonville, the median asking rent fell 5.6% in April from a year earlier and 10.1% in May from a year earlier. But again, nationally, rents are rising.
More housing and more extreme weather
A newer one analysis of Redfin found that “housing markets in West Florida are cooling faster than anywhere else in the country as natural disasters intensify, new construction soars and the housing boom “Pandemic-era home buying demand is fading further into the rearview mirror.”
On a list of the 10 fastest-cooling real estate markets, six are in Florida and two are in Texas (Dallas and Houston). Those in Florida are: North Port, Tampa, Cape Coral, Orlando, Jacksonville and Lakeland.
For the most part, in these metropolitan areas we see supply exceeding demand, but several factors come into play, such as natural disasters and their increasing severity, coupled with insurance woes. Yet much of this actually depends on supply and demand. “Measures of home buying demand and competition are declining rapidly in Florida, and listings and price declines are increasing,” the Redfin analysis says. In North Port, Florida’s fastest-cooling market, the number of homes for sale increased 68% from the previous year.
“Florida is building more new homes than any other state in the country (except Texas, which is also home to two of the ten coolest housing markets in the country), a construction boom coming at a time when prices and mortgage rates are high. dampening home buying demand,” Redfin said. “Oversupply of inventory chills competition. »
House prices skyrocketed during the pandemic housing boom – and a mortgage rate shock happened shortly after, once the Federal Reserve raised interest rates to bring inflation under control, so affordability is an issue and it’s obvious that this affects demand. So even though some markets in Florida and Texas have started to see a decline in rents and housing prices, they remain significantly more expensive than before the pandemic. “North Port prices have increased 60% since 2019, and Tampa prices have increased nearly 70%, far more than the national increase of approximately 40%,” the analysis states. At the end of 2019, the average home value in Austin was approximately $391,000 per person. Zillow, and despite a decline from its peak, the average home value now stands at almost $549,000. During the same period, the average home price in San Antonio increased from almost $193,000 to almost $262,000.
Let’s be clear, not all Texas and Florida real estate markets are cooling; some are still warm. Still, falling housing costs aren’t bad for those who rent or want to buy a home to live in. That’s not good for investors, who once saw these regions as superstars and, in some cases, might again if they believe them. drops are a temporary phenomenon.
People have been moving during the pandemic, and although San Francisco and Los Angeles have seen some of the the greatest population losses, San Antonio and Austin saw some of the largest increases, fueling these cities’ reputations as hot metros, not to mention that it’s much easier to build homes in Texas than in California. Texas build more houses than any other state last year, and we see that reflected in prices. This isn’t a new idea: Housing policy analysts, urban economists, and even real estate officials have consistently said that building more housing is actually the only way out of the housing crisis.
