While most of the country is experiencing a housing shortage, two states have suddenly found themselves with a slew of inventory and not enough buyers. 

Florida and Texas, both of which were some of the hottest housing markets during the pandemic, are now seeing a surplus in unsold properties, and as a result, sellers are slashing prices, according to a new report by real estate site Redfin. For context, on the west coast of the Sunshine State, the number of homes on the market jumped roughly 50 percent from a year ago in metros such as Cape Coral and North Port. And in Mcallen, Texas, inventory jumped 25 percent compared to March of last year. 

“Out-of-town homebuyers no longer see Florida as a place to get amazing value,” Eric Auciello, a Tampa Bay real estate agent and Redfin sales manager, said in the report. “Now they’re moving to North Carolina or Tennessee to get a good deal. Many local blue-collar workers have been priced out of homeownership, too. Two years ago, the North Port metro was one of the most competitive housing markets in the country because it was affordable for remote workers and there was a shortage of homes for sale, but none of those things are true today. Sarasota, in particular, has been overvalued for decades, and the chickens have finally come to roost. The Tampa metro has been faring a bit better.” 

In terms of where sellers are most likely to chop asking prices, five out of the 10 metro areas analyzed in the report were in Florida, while two were in Texas. A whopping 48 percent of listings in North Port-Sarasota had a price cut, the largest share in the country, and close behind was Tampa at 44 percent, then Cape Coral (41 percent), Orlando (35 percent), and Jacksonville (33 percent). Over in the Lonestar State, a whopping 33 percent of homes in both Houston and San Antonio were discounted. 

One of the issues that has slowed the market and increased inventory, particularly in Florida, is the sky-high and going-higher home insurance premiums that buyers need to protect their properties from tropical storms and other severe weather. A Redfin survey found that nearly three-quarters of Florida homeowners said that they themselves or the area in which they live has been affected by rising home insurance costs or changes in coverage. According to the report, Auciello’s own home insurance is now a hefty $14,000, up from $8,000 in two years.

Texas has famously high homeowner insurance rates, some of the highest in the country, but that didn’t stop people from flocking there over the last decade. The high premiums were offset to some degree by low interest rates and affordable home prices but demand drove up prices across the state, and now, higher mortgage rates are increasingly keeping potential buyers on the sidelines.

“Last year was by far the slowest market I’ve seen in my 20 years as a real estate agent,” said Connie Durnal, a Redfin Premier real estate agent in Dallas. “Move-up buyers are almost nonexistent. Even though a lot of homeowners have built up a ton of equity, many don’t want to sell because their monthly payment would double or triple due to high mortgage rates.”