Why houses in pandemic boomtowns are sitting unsold - despite prices falling

Texas and Florida are seeing the biggest increase in homes sitting unsold on the market, new research has revealed. 

Hundreds of thousands of Americans fled to these states during the pandemic - where homes were bigger and had outside space.

At the start, at least, they were also cheaper - before demand caused a surge in prices in the so-called boomtowns. Home builders reacted and have flooded the market, meaning there are more houses now than people want.

In Dallas, 63 percent of listings sat on the market for at least 30 days in June - up from 52 percent a year earlier.

This rise of over 10 percent was the biggest uptick of all the major US metros, according to new analysis from Redfin. 

It is followed by four metros in the Sunshine State - Tampa, Fort Lauderdale, Jacksonville and Orlando. 

Stale inventory is growing fastest in these states as supply outweighs demand and insurance rates skyrocket, Redfin found, despite property prices beginning to fall. 

In Tampa, 70 percent of homes on the market had been listed for at least 30 days without going under contract - up from 60 percent the year before.

Some 77 percent of properties in Fort Lauderdale had been sitting on the market for a month, up from 68 percent, and 70 percent of Jacksonville listings were growing stale - up from 61 percent. 

In Orlando, meanwhile, the number of homes which were on the market for over a month increased from 60 percent to 69 percent in the year to June. 

Sixth on the list is Fort Worth, Texas, where the number of unsold listings on the market for at least 30 days rose 8.1 percent over the year to 64.2 percent.

Florida and Texas are building more new homes than other parts of the country, which is adding to overall supply at a time when demand is dwindling due to high housing costs and homeowner fees.

Despite experts predicting that prices will soon plummet and some sellers cutting list prices in former Covid boomtowns in Florida, homes are still sitting unsold. 

Skyrocketing insurance costs are also playing a part. 

Homeowners in Florida already pay the highest premiums for coverage in the US, at an average of $10,996 a year in 2023, according to comparison site Insurify. 

Some homebuyers who live in Florida - or are thinking about moving to the state - are having second thoughts due to the increasing prevalence and intensity of climate disasters, said Redfin.  

Homes are also taking longer to sell across the country as a whole. The share of stale home listings increased over the year in 44 of the 50 most US populous metros, Redfin found.

Nationwide, nearly two-thirds - 64.7 percent - of homes that were on the market in June had been listed for at least a month without selling.

That is up from 59.6 percent in the same month in 2023 - marking the biggest annual increase in a year.

June also marked the fourth straight month in which the portion of homes going stale on the market for at least a month ticked up on a year-over-year basis. 

The number of properties that had been listed for at least 60 days was also up in June - rising to 42.6 percent from 38.4 percent a year earlier. 

More homes are sitting unsold because record high home prices and elevated mortgage rates are giving buyers cold feet, the research found.

The average 30-year fixed rate mortgage is 6.77 percent, according to latest Freddie Mac data from July 18. 

Even though new listings are losing steam, many listings are sitting on the market and causing inventory to pile up.

'Overall, the market is fairly stagnant,' said Shay Stein, a Redfin Premier agent in Las Vegas. 

'There are more listings hitting the market, but a lot of them aren't in good condition or they're not in a desirable neighborhood - and sellers are pricing unrealistically high. 

'A lot of sellers are willing to let their home sit on the market until they get the price they want, and a lot of buyers aren't willing to pay sky-high prices when mortgage rates are still high.'