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In the wake of the pandemic, Florida and Texas witnessed a construction boom, with new neighborhoods springing up like wildflowers. Yet, these freshly minted homes are now echoes of anticipation, as a surplus floods the market, leaving price growth stagnant and buyers scarce.

A Glut of Homes in the Sunbelt

Post-pandemic, the allure of sunnier skies and tax-friendly havens spurred a migration to Florida and Texas. The result? A housing surplus. In locales like Cape Coral and North Port, Florida, the inventory of homes for sale in March ballooned by an astonishing 50% from the previous year, leading the nation in unsold homes. McAllen, Texas, wasn’t far behind, with a 25% spike in housing supply, according to Redfin’s data.

The Price Paradox

As home prices climb and mortgage rates soar, the American dream of homeownership dims. The once buyer-friendly market has become a quagmire of high costs, causing many to remain in their current abodes, wary of the financial leap.

A Shift in Market Dynamics

Eric Auciello, a Redfin sales manager, observes a seismic shift: sellers are losing their grip on the market. In five Florida and two Texas cities, sellers are increasingly likely to negotiate, offering a glimmer of hope for astute buyers. “The rapid rise in Florida’s housing prices has prompted many to sell, yet adjusting to a buyer’s market is proving challenging,” notes Auciello.

Advice for Navigating the Current Market

For sellers, Auciello advises a reality check: “Price your home fairly; the market has evolved, and so should your expectations.” Buyers, on the other hand, might find themselves in a favorable position to negotiate below-market deals.

The Numbers Tell the Story

The median home price in Florida stands at $415,300, a modest 3.7% uptick from last year. Texas saw a 1.7% increase, bringing the median price to $344,500. These figures contrast with the national median of $420,321, which has risen by 4.8%. Notably, only three metro areas saw a dip in median sale prices, with one each in Florida and Texas.

Mortgage Rates: A Deciding Factor

The 30-year fixed mortgage rate hovers at 7.43%, a peak not seen since the previous November. Melissa Cohn of William Raveis Mortgage suggests that despite the high rates, now might be the opportune moment to buy. “When rates fall, demand—and prices—will likely surge. Buying now could place you ahead of the curve,” she advises.

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