WEST PALM BEACH, Fla. — Many Florida residents have had trouble navigating through the rising cost of insurance premiums.
Now, it appears those high fees are taking a hit on home sales.
A study by real estate company Redfin found that five Florida metro areas had some of the fastest drops in sales over the last year — including West Palm Beach ranking at No. 3.
Redfin reported that West Palm Beach saw a 13.8% decline in pending sales from last year.
So, what is the cause?
Redfin said it's due to frequent natural disasters, a surge in home insurance costs and HOA fees fueled by what they say is intensifying climate risk.
"I'm not surprised by that because I feel it in the market," real estate agent Alex Fink with Team Fink Real Estate at Illustrated Properties said.
Fink said over the last year the market has shifted significantly, bringing a slower pace to home selling.
"What are the biggest hurdles you've seen for people that are trying to buy a house?" WPTV reporter Joel Lopez asked.
"It comes down to the cost, and it depends on the type of house," Fink said. "New constructions homes sell at a premium because insurance rates are going to be a little bit better because they're not going to have older structural problems that are going to come up."
Fink also cited condo assessments and increases in HOA fees due to insurance have also played a factor.
"Anything that needs work is sitting on the market dropping in price and you have a risk of higher insurance rates if it's an old home or closer to the water," Fink said.
According to Redfin's website, there are about 530 houses in West Palm Beach that have been on the market for more than six months.
"If you want to live here, this is the market. Can you afford it? If you can't, people do move," Fink said.
Florida homeowners have been burdened with a surge in fees, amidst a coverage collapse impacting people like longtime West Palm Beach resident Tim Allen.
"Property insurance, it's just ridiculous," Allen said. "The taxes, I have to shop a lot smarter. I have to do a lot of the BOGOs, and I cut back on a lot."
Allen, who is 70 years old, relies on Social Security and is on a fixed income.
"Would you say Florida is affordable right now?" Lopez asked.
"No, it's not affordable at all — unless you're wealthy," Allen said.
He said he has lived in the area for more than 40 years and has thought of moving.
"If it (fees) keeps going up, I'm going to have to," Allen said. "I came to West Palm Beach when it was a relatively small town and now it just looks like you're living in New York."
He said he's had a few friends move north to find a cheaper way of living.
Nationally, Redfin found home sales are up 4.7%.
The report said that Fort Lauderdale (-15.2%) and Miami (-14%) saw the biggest drops in home sales in the U.S.
Matt Sczesny is determined every day to help you find solutions in Florida's coverage collapse. If you have a question or comment on homeowners insurance, you can reach out to him any time.
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