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Skyrocketing insurance premiums in areas of Florida prone to flooding, like the neighborhood of Shore Acres, are leading to a spike in the number of homeowners trying to sell their properties, as reported in a video by real estate expert Nick Gerli.
"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," Gerli, CEO of real estate data platform Reventure App, said in a YouTube video he filmed in the neighborhood of Shore Acres in Saint Petersburg, Florida.
"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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More frequent and more severe extreme weather events, fueled by climate change, have contributed to the ongoing property insurance sector crisis in Florida, increasing the risk of high damage claims following natural disasters and leading insurers to raise their rates whenever possible.
This is especially true for vulnerable areas like Shore Acres, which is prone to flooding. Last August, when Hurricane Idalia struck Florida, at least 1,200 homes in Shore Acres out of the 2,600 total flooded, The New York Times reported.
Residents of Shore Acres in Saint Petersburg told Gerli they are paying over $11,000 a year for their insurance. According to a recent study by the National Bureau of Economic Research (NBER), most premiums across Florida average between $2,500 and $3,000 a year; in south Florida, they went up to $4,000 and over.
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High home insurance rates, together with rising homeowner association fees and historically costly mortgages, are contributing to the struggle faced by many homeowners in Florida.
"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."
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"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 added.
"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 added. Much more preferable, Gerli said, it's to buy a home in Flood Zone X—which means an area with zero risk of flooding.
According to Gerli, homes in Shore Acres were worth about $250,000 before the pandemic, but the median sale price of a home spiked to $450,000 since then. As of June, the latest data available on Redfin, the median sale price of a home was $415,000, down 3.5 percent year-over-year.
Are you a resident of Shore Acres? We want to hear from you. Contact g.carbonaro@newsweek.com.
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About the writer
Giulia Carbonaro is a Newsweek reporter based in London, U.K. Her focus is on the U.S. economy, housing market, property ... Read more