A buildup of unsold houses sitting on the market for weeks is becoming a new reality in once-booming housing areas across the Sun Belt.
Real estate agents in the South and Southwest say they’re seeing more people list homes, giving up on hopes that mortgage rates will drop anytime soon. In Florida, homeowners are fleeing soaring insurance costs, and in Colorado, investors are culling rental properties.
The result is a rise in supply, something real estate agents who were getting multiple offers on even ho-hum houses not so long ago are not accustomed to. In Florida, houses now take a median 73 days to sell, up from 55 days two years ago and twice as long as in New Jersey and Virginia, according to Realtor.com data.
“In the big picture it’s not horrible, but compared to what everyone was used to, it feels like molasses,” said Michael Lauer, a broker in Florida’s Tampa Bay area. His business remains steady, but overall sales in his county have declined about 14% and the supply of homes for sale has more than doubled in two years.
A rise in the supply of homes — whether sold by owners or new — is generally a good thing in the US, where low inventories since the aftermath of the 2008 financial crisis have contributed to render many regions unaffordable for a majority of people.
An influx of people moving south during the pandemic and the lack of sellers willing to let go of cheap mortgages had exacerbated the issue and led to fierce bidding wars. Today, the supply of previously owned homes on the market nationally is still below 2019 levels, but nine states in the South and West now are above, Bloomberg Intelligence analyst Drew Reading said in a June 10 note.
Homebuilders who sped up production during the pandemic-era housing boom in the Sun Belt now are having to cut prices and offer steep price concessions to move excess homes.
Economists call the buildup of unsold houses in once-hot areas “normalization.”
