Is now the time to exit real estate in Florida?

Is now the time to exit real estate in Florida?
There is no denying the strength and momentum of the real estate market in Florida. Some people would argue that the Florida real estate market is effectively indestructible at this point but I would counter that these circumstances could describe a bubble. Despite this, is it time to pack up, sell the house, and exit the state? There are a number of considerations to be made, and the decisions will be extremely location orientated, as well as based on personal factors like your age and wealth.
The largest issue with real estate in Florida is the insurance rate premium. Florida’s real estate market is extremely hot despite exorbitant insurance premiums.
Florida is getting to a point where real estate is uninsurable or prohibitively costly to insure. Many people in Florida do not have insurance because it is so expensive. This leaves them susceptible to a storm wiping out all the value in their home. Home insurance is something you really should not live without. A standard policy covers the replacement of the home and some of its contents in the even of damage or theft. If you lose your house, and it isn’t insured, you will probably lose all the contents of the house as well.
If you think insurance costs are bad now, future storms could drive the rates up further. Even areas that are several miles inland are still risky bets when it comes to hurricanes and storm damage. Homeowners will likely experience more storm damages and additional issues before there is any chance insurance rates decrease. High property insurance costs will hamper or decrease property values in a similar way that high taxes do.
Home prices in other parts of the country like the Northeast, Northwest, and West are much higher than Florida. The price of a house in Tampa is about half the price of cities like Boston, New York, DC, Seattle, Portland, San Francisco, and LA. In addition, other parts of the country have far higher property taxes for a comparable house. Given this, it could potentially make sense to purchase property in Florida, or stay in Florida, if you are far enough away from the water.
The need to flee California and New York due to covid is largely over which has lessened upward price momentum in Florida real estate.
The Florida insurance crisis may just be beginning. It may be a fools errand to try and wait for insurance costs or mortgage rates to decrease. Insurers are financially stress as they case losses from severe weather, inflation, and supply chain bottlenecks. This leads them to jack up rates. The issue is more than just bad weather, there is also runaway lawsuit abuse in Florida.
In the past few years in Florida, seven insurers have gone belly up, 15 have stopped writing new business, and four have abandoned the state entirely. If insurers are fleeing Florida, should you?
Works Cited:
https://www.reddit.com/r/RealEstate/comments/153gfwc/giving_up_on_florida_real_estate/
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