By Mike Bodeen · 21 January 2025
Also: State Farm is Pretty Unpopular Right Now!
Florida and Arizona! Sunshine states. Retirement havens. Florida has water – lots of it, and unbearably humid. Arizona has brutally dry heat in summer.
During the pandemic, home prices soared in Florida and coupled with the high interest rates, are too high. During the pandemic, home prices soared in Arizona, and coupled with the high interest rates, are also too high. With both states it’s very difficult for buyers to afford purchasing a home with 7+ percent mortgage rates. Both states are experiencing a growing inventory, not being matched with like-sales. But they differ – for now.
According to a recent Newsweek article, Florida’s home prices will be falling all across the state. “Locals are priced out of Florida’s housing market, vacation homeowners and investors have stopped buying, and inbound migration has dropped significantly.” And their market is turning down.
“Both states need lower mortgage rates to spur buyers. Florida is about to go the other way to spur buyers and make homes affordable and that’s by dropping home prices.”
One stat jolted me about Florida’s market. According to the article, active listings number over 150,000! Now that’s statewide, but it’s still a huge number. In the Arizona Regional MLS (which is 90% of all Arizona’s listings) there are 22,000 active listings, which currently is rated a “balanced market” by the Cromford Report.
Aaah but let not pride precede our fall. Lest we think we’re safe from a similar Floridian fate, there are ominous clouds on the horizon, which we have noted in prior Snapshots. Though we have less inventory by a longshot, our listings, as of today are up over 40% from just one year ago, and are increasing. Our month of listing supply has grown from 3.5 to 4.5. The price per square foot (PSF) of homes under contract is down 4% from last year. This will result in lower sold prices.
Both states need lower mortgage rates to spur buyers. Florida is about to go the other way to spur buyers and make homes affordable and that’s by dropping home prices. For both states this will be the inevitable result should rates remain high. Florida is ahead of the pack at this point.
I Love Their Mahomes’ Commercials but their Policy to Drop Policies in SoCal is a Really Bad Look
The insurance company State Farm announced that it dropped plans to run an advertisement in this year’s Super Bowl. According to The Wall Street Journal, this decision was because the company did not want more attention to its handling of the California market.
Lest we forget, the company stopped selling new home insurance policies in California in 2023 because of wildfire risk and rapid inflation in construction costs and then announced plans in 2024 not to renew 30,000 property policies in the state, including more than two-thirds of those in Pacific Palisades where the wildfires have been most severe.
State Farm has spent $23.2 million on national linear TV since Jan. 1 – yes, they have money for self-promotion, but not for California homeowners.
Market data referenced in this article comes from The Cromford Report.