An overwhelming majority of Floridians agree that home prices are too high in the Sunshine State, according to new polling conducted for Newsweek, as it remains one of the most overvalued housing markets in the entire country.
The exclusive Redfield & Wilton Strategies poll found that 76 percent of Florida residents think that house prices in the states are currently "too high," while 16 percent think they are "about right" and only 1 percent think they are "too low."
The poll was conducted among a sample population of 840 eligible voters in Florida between July 25 and 26.
As of June 30, according to the latest data made available by real estate company Zillow, the average value of a home in Florida was $390,856, up by 1.6 percent compared to last year. Meanwhile, the average home value on a national level was $348,853—over 10 percent lower than Florida's. The average home value in the United States was still 1.2 percent higher at the end of June compared to a year ago.
Low mortgage rates during the pandemic led to the state's housing market boom, as demand was high and aspiring homebuyers faced each other in extremely competitive bidding wars.
According to Norada Real Estate Investments, Florida home values have risen by 80 percent over the last five years, driven by a lingering supply shortage and the constant influx of people moving to the state—a trend that's expected to continue in the next five years, though the company said it's unclear by what amount.
Florida is home to some of the most expensive neighborhoods in the country, according to Zillow, with the average house value in the neighborhoods of Palm Island, Port Royal, and Golden Beach, being $8,018,344, $15,569,279, and $7,228,892, respectively, as of June 30.
While the Sunshine State still has one of the most expensive housing markets in the country, there are fears that the trend that has brought up home prices in the past few years might soon reverse as an insurance crisis is unfolding in the Sunshine State.
Major insurers have pulled out of the state in recent months, including Farmers Insurance, with most mentioning the increased risk of extreme weather events as the main reason behind their leaving.
Jeff Tucker, senior economist at Zillow, previously told Newsweek that "the withdrawal of insurance companies from Florida means fewer options for insurance for residents." Tucker said this "will most likely raise the cost of insurance, further pushing up the total cost of homeownership in the state."
Itzhak Ben-David, a finance professor at Fisher College of Business at Ohio State University, told Newsweek that higher insurance charges and "the ensuing financial strains and uncertainty could spark a surge in forced sales or mortgage defaults, further driving down property prices."
But not all experts agree. Tucker said that the demand for housing in Florida remains strong despite it all, an indicator that the market is not falling apart. Floridians, on the other hand, are likely to feel like their home will become even more expensive with the additional cost of higher insurance.
