Florida insurance Crisis: According to real estate expert Nick Gerli’s video, homeowners in Florida’s flood-prone neighborhoods, such as Shore Acres, are finding it more difficult to sell their homes due to skyrocketing insurance prices.
“In a video he recorded for YouTube in the Shore Acres neighbourhood of Saint Petersburg, Florida, the homeowner insurance crisis here in Florida is reaching a fever pitch, with the insurance rates doubling, tripling, and even quadrupling in neighborhoods like this,” stated Gerli, CEO of real estate data platform Reventure App.
“Some of these owners are now being forced to sell because they can no longer afford their homeowner insurance and their flood insurance in 2024,” he added. “The number of homes for sale in this ZIP code [33703 245] has gone up by 400 percent in the last three years. We’re now at the highest level of inventory in a decade [245 as of July 2024].”
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Climate change has led to increasingly frequent and severe extreme weather occurrences, which has exacerbated Florida’s ongoing property insurance sector issue by raising the possibility of substantial damage claims after natural disasters and forcing insurers to boost premiums whenever possible.
This is particularly true for regions that are susceptible to floods, like Shore Acres. At least 1,200 of the 2,600 Shore Acres homes were inundated when Hurricane Idalia made landfall in Florida in August of last year, according to a story by The New York Times.
Gerli was informed by residents of Saint Petersburg’s Shore Acres that their annual insurance costs exceed $11,000. The majority of Florida premiums, according to a recent analysis by the National Bureau of Economic Research (NBER), range from $2,500 to $3,000 year; in south Florida, they exceed $4,000.
Many Florida homeowners are struggling due to high property insurance prices, growing homeowner association dues, and historically expensive mortgages.
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“I’ve never seen so many ‘for sale’ signs,” Gerli said walking down a road in Shore Acres. “I’ve traveled all across America reporting on the local housing market. This is the most ‘for sale’ signs I have actually ever seen in a neighborhood.”
“Of course this doesn’t happen everywhere in Florida, but it’s important that you understand the risk. If you’re a homebuyer or real estate investor in Florida you have to understand if you’re buying in a flood zone. That’s number one,” he continued.
“We’re in Flood Zone A here in Shore Acres, which means high risk of flooding, which means high flood insurance costs, which means you have major risks,” he stated. According to Gerli, purchasing a property in Flood Zone X—an region with no risk of flooding—is far more desirable.
Before the pandemic, Shore Acres properties were estimated to be worth roughly $250,000, but since then, the median sale price of a property has increased to $450,000, according to Gerli. According to Redfin’s most recent data as of June, the median sale price of a house was $415,000, a 3.5 percent decrease from the previous year.
