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Housing inventory is piling up in Florida and Texas, in part because homeowners association fees and home insurance costs are scaring away buyers from the condo market, according to Redfin.
The real estate listings site said the number of available condos had soared in key metros in the two states over the past year, one symptom in an overarching trend of homebuyers getting cold feet amid high prices and rising costs associated with owning a home.
Condo inventory soared 53% year-over-year in Florida in July, per Redfin data, while condo inventory climbed 42% in Texas in the same timeframe. Those increases far exceed the national average, with condo inventory rising 27% nationally in July.
Jacksonville, Florida, saw the steepest climb in inventory, with the supply of condos soaring 81% from levels last year. That was followed by Orlando, Florida, and Fort Worth, Texas, where condo supply soared 68% and 65%, respectively, over the last year.
Condo buyers have been put off by rising HOA fees and insurance premiums in both states, Redfin said. HOA fees have climbed more than 15% from levels last year in key Florida metros, Redfin found in a previous analysis.
Meanwhile, natural disasters in the two states have pushed up insurance premiums. Property insurance costs in Texas and Florida have grown at the fastest pace in 20 years, a Capital Economics report found.
"The condo market isn't moving," Steven Weiss, a Redfin agent based in Tampa, said in a statement. "It's much more difficult to sell a condo. Buyers are aware we're at somewhat of a tipping point for condos, and that their value may continue to decline as HOA fees rise and people grow more wary of buying in a waterfront building," he added.
Condo prices haven't seen a significant decline yet, with the price of condos in Jacksonville and Orlando seeing a mild, single-digit fall over the past year. In some metros, like Fort Worth, prices have actually increased.
It's a different story for house prices though, which have been pushed lower in both states as supply starts to outweigh demand. More than 6% of homes nationwide are now seeing price declines, Redfin said in a June report, the fastest pace of price-cuts since 2022
