Florida on verge of collapse. Insurance premiums spike 100%.

the insurance rates are getting hiked even further here in Florida and homeowners they're being kicked out of their homes and forced to sell this is a crisis that's getting even worse in 2024 and it's one that's going to have massive ramifications on Florida's housing market and economy something that you all need to be paying close close attention to because many people thought that Florida was this impenetrable State over the last couple years all these people moving here people thought the economy here was like Ironclad housing market here was going to keep going up is what everyone said but now we're seeing the exact opposite occur Florida is now mired in a housing crash inventory of homes for sale is spiking homeowners can't afford it they can't afford to live down here anymore the insurance rates on average across Florida everyone a homeowner pays $111,000 a year for their homeowners insurance cost that amount has doubled over the last 3 years I want you to think about what that means for people who live here in Florida particularly uh Miami I'm in Miami right now and I'm going to show you some of the things that are going on here in Miami there have some really concerning things happening here on the ground that I'm going to show you um involved with this property crisis but I just want you to think about what an $1,000 a year homeowners insurance policy means it means that if you're like a retiree who owns in Florida like many of the homeowners here are it means that you really can't afford to live here anymore because your insurance your property taxes your HOAs they're going up and they're going up uh like a hockey stick they're just going up like that while people's incomes are staying stagnant or maybe people's incomes are going up four or 5% a year not even close to enough to cover these costs and I fear that this is going to be a a turning point for Florida's economy and I fear that we're just seeing the tip of the iceberg with what's about to happen here on the ground in Florida because as you all remember remember folks and maybe you don't remember but in case you don't I'm going to tell you back in 20072 2008 Florida's economy and housing market got absolutely crushed by a massive housing downturn home prices here in Miami went down 50% and I want you to think about what that means the price of a house went from around 300 350,000 to 150 160,000 people got wiped out the foreclosures were immense 10% of all mortgages here we in foreclosure and so that's the history we're dealing with in Florida everyone massive downside massive volatility this state's unemployment rate went up to 10% in that last recession and so for the people out there who think that Florida is somehow different this time that it can't happen again this time I would suggest exercising some caution because we're seeing some of the same early warning indicators and one of the early warning indicators here that I actually want to show you is these new apartment buildings here that are being built these new apartment buildings many of which are empty uh here in a neighborhood called Winwood here in Miami the rents here at an apartment building like this are around 3,000 a month for a one-bedroom 4,000 a month for a two-bedroom these rents are priced like we're in New York or La that's where Miami has gotten to in terms of the lack of affordab it's pric like New York and La when it is not yet New York and LA in terms of the strength of its underlying economy as well as the incomes of the people that live here and that's really the big point and the big problem uh in Miami's economy and housing market right now is the incomes have not gone up nearly enough to justify the crazy increase in prices the crazy increases in rent and the crazy cost in insurance so in Miami date County the median household income the typical household can you guess what they earn in Mii Mi D County boy I got to tell you there are some loud cars in this neighborhood um people really like loud cars down here the median household income is $70,000 everyone while the typical rent is close to 3,000 a month meaning that the typical household has to spay spend about 50% of their gross income on rent which is just um crazy that's actually the highest rent to income ratio in America so Miami is actually the least affordable City to rent in America even worse than New York even worse than anywhere in California and so you ask how sustainable is that situation especially with all these new apartment buildings going up and the answer is it's not sustainable the vacancy rates here in Miami are now going up more and more uh apartment buildings are sitting empty more and more landlords are now having to reduce the rent in order to fill uh the vacancies and that's one of the leading indicators of a market correction of a market downturn when you see these big luxury buildings all of a sudden have a lot of vacancies and they're offering concessions and in a second here folks I'm going to show you guys some houses here in an adjoining neighborhood uh so I could show you what's going on in the local housing market but first I want to actually show you an office building just up the street actually just over there there's an office building I want to show you because this office building is now facing foreclosure and it was just built a couple years ago and it's a sign of the expanding commercial property crash here in Miami and other cities around America all right folks here we go this is the office building right behind me Gateway at Winwood I was telling you about this getting foreclosed on you can see it's a brand new building an amazing street corner here in a busy intersection in a growing neighborhood uh it's in default it could get foreclosed on the loan on it is for $100 million it was built just 2 or 3 years ago and uh it was catered to Tech startups and crypto startups those were the tenants that they wanted to attract to this office building and very clearly they're having issues doing it because they've now defaulted on their loan and the the lender this group called A10 Capital they're looking to uh potentially foreclose and you say to yourself like what hold on wait a minute this is supposedly like a great location in a booming City they just built this brand new office building and just 3 years later it's getting foreclosed on what's going on here everyone I mean it's a sign that the economy is not as healthy as as you would think it's a sign that these developers whether they're office developers or apartment developers just went too crazy during the pandemic they built too many new buildings too many new structures and now they're sitting vacant and they're sitting empty and actually the Wall Street Journal just ran an article maybe six to seven months ago about how the office Market here in Miami is slowing big time and I'm talking to the locals here everyone I go to a restaurant I go to a coffee shop I talk to people on the ground and the big thing that I'm understanding when I talk to the locals is a lot of people down here in Miami and in Florida are struggling they're struggling to get by I've talked to people who've lost their job over the last year and they're just trying to find side hustle so they can stay afloat and pay their rent I've talked to people you know who kind of bought the dream of moving down here during the pandemic from New York or Los Angeles and are kind of struggling to find their way and uh I'm getting the sense that a lot of people are actually starting to move back to the cities they came from during the pandemic this is called Boomerang migration or reverse migration this is a major Trend that we are now seeing which is causing more vacant apartments which is causing a big surge in inventory on the housing market here in Florida and this is the key point where we're going to link it back to the property insurance crisis because all of a sudden now the homes for sale on the floor housing market are spiking inventory across the state's around 140,000 homes that is the highest level it's been in four or 5 years and so there is no longer a shortage of homes in Florida very important that you guys understand that actually quite the contrary we are now seeing a delug of Supply what I call a wall of inventory hit the Florida housing market and hit the Florida housing market really really hard and actually you can see in this neighborhood here there's some beautiful art so the neighborhood on right now Windwood it's known for its murals and there's always these kind of cool murals you walk every one to two blocks it's really really nice it's really really beautiful you can also see it down that way as well however nice murals doesn't mean people can afford 3,000 4,000 a month in rent or 1.5 million for a house which is what some of these houses started selling for over the last 2 or 3 years I mean in 2021 and 2022 everyone you had all the investors Pile in you had all the part- timr from New York Pile in who came down here during the pandemic and they bit up the prices to the point where in some of these neighborhoods you can't even find a house for less than a million dollar and many owners they can't even afford to live in these homes anymore because according to insurify the annual property tax bill in Florida is $11,000 a year for a house/ condo now I mentioned that in the beginning but I want to give you some more perspective on that number the average property insurance cost for a homeowner in America is around 4500 a year so in Florida the cost is 2 to three times higher than the US average in fact the third most expensive property insurance State Oklahoma has costs that are half the rate of Florida so really no other state is even close or on par to Florida in terms of how expensive the property insurance is and so I want you folks to put yourselves in the shoes of a Florida homeowner maybe they're a senior they moved down here a while ago maybe it's actually a second house it could be a vacation home and they were used to paying 4 5,000 a year for property insurance maybe four or 5 years ago now they're paying 11,000 a year their property insurance doubled at the same time their property taxes double their property taxes are now maybe up to 8 or 9,000 a year and in some cases if you're in in a condo you're getting getting smashed right now by HOA assessments that are in some cases doubling and tripling so kind of from all angles Florida homeowners and homeowners here in Miami are just getting crushed and the unfortunate thing about it is that this is kind of ruining some people's lives right I mean some people have lived in houses here for a while they were comfortable now they can no longer afford it and they're being forced to sell and that's and it's unfortunate and actually the state insurance carrier called citizens so there's a kind of state-backed property insurance carrier they're still going to increase the rates this year so they're proposing a 133% insurance rate hike from the state insurance carrier who's kind of like the insurance carrier of Last Resort if people can't get insurance in the private Market you know if they live in an area in a flood zone or if they live in an area kind of that gets hit by hurricanes a lot and the private insurance don't don't want to insure it they'll get citizens the state back insurance but even then citizens is increasing their rate by 13 14% still so there's really not a whole lot of options for Florida homeowners now interestingly inventory is going up everywhere in Florida people are being forced to sell but Miami Dade County is kind of the the area where there's still somewhat of a shortage according to data available on reventure app there's still a 10% shortage of homes for sale compared to the long-term average in Miami Dade and in some neighborhoods um there's as much as a 30 to 40% shortage like in Coral Gables or Kendall so there are still areas where there's a big shortage but more and more we're seeing that disintegrate in this ZIP code here in Winwood and U buav Vista inventory is now up 50% from normal so there's over a 100 homes for sale in this neighborhood during the pandemic there was like 20 homes for sale so look at that everyone you see that inventory Spike you see the evidence of what I'm describing to you here with people being forced to sell we also see some investors selling and interestingly we got a a home for sale right here everyone all right folks so I just looked up this listing on Zillow it's a four bed two bath 16700 Square ft here on a little corner lot you can see it's actually you know a decent Siz lot so it's got that going for it but you're not going to believe the price tack here on this house everyone you ready you ready for it can you guess my Miami Winwood 4 bed two bath how much this house is listed for $1.65 million $1.65 million and they've done a $100,000 price cut good for them they've done a $100,000 price cut but the owner of this property bought it back in 2019 for 370,000 so they're literally trying to make a 5x return on their investment over5 years and if you look actually at the Zilla description one of the highlights basically the thing it talks about is it it can be redeveloped it's a certain type of zoning where you can knock the house down and build some type of four-story structure um and that's I guess what the owner thinks is going to get them 1.7 million so it's actually an example of like you know a speculative owner trying to actually you know Market a conversion of this from a house to a commercial property which isn't good right that's taking a house off the market but I think why while this owner is going to struggle is because of what I showed you a second ago a lot of the commercial properties here are struggling the apartment vacancy rates are going up the office Market here is in a downturn and so what's going to be the demand to uh pay 1.8 million 1.7 million and build a four-story structure I'm not so sure interestingly if we go across the street you can see we have a house here that's boarded up so we have a house that's boarded up across from the house that's selling for 1.7 million see over here we got a vacant lot and then interestingly you could see we have another property for sale right over here from Bianca guara all right uh you can see there's a beat up truck in the front yard not sure if anyone lives here and you can see actually that this is listed for 1.3 million and they actually just took it off the market because they couldn't get 1.3 million and the the current owner they bought it for 23,000 in 1996 so they're trying to go from 23,000 to 1.3 million they couldn't get 1.3 million they got mad they took it off the market I mean it just goes to show the the level of greed inherent in this market still um and it goes to show how stubborn some sellers are in the market right like you bought it for 23,000 you're selling it for 1.3 million I mean you could sell that for a million or 900k I mean it wouldn't really make a differ you would still be making a ridiculous amount of money but a lot of sellers they they don't want to admit that the bubble is popping clearly you know they don't want to admit that and so that's why housing downturns often can kind of take a long time everyone is that even though the inventory in this ZIP C spiked and the office buildings in Miami are going to foreclosure and there's more apartment vacancies and more people are starting to get laid off you know a seller they're going to often hold on to their price that they think their house is worth until they are forced to lower it now one very interesting thing is that I was actually walking around this neighborhood yesterday and I ran into um a local someone that lives in this area and um he's lived here for his whole life and he had some really interesting things to say about what's going on in Florida's housing market right now and I'm going to show you a clip from that interaction um because I think it's going to really help you understand how the locals down here feel and where the market is heading into the future you know this guy he's he's lived here his whole life he's seen this happen all before the other thing Miami is just so expensive I mean how's anyone going to afford to buy in Miami Sound man he keep taking it up you think it's the santis who's making it more expensive yeah I mean I guess there is a correlation between him being here and it getting more expensive because the way I look at it it it shouldn't be that expensive for what people trying to find a place to live man it's hard it is hard one bedroom up the $2,000 a one bedroom and they not that big is this is this where you live here yeah is this a one bedroom or is this a yeah looks like a nice place yeah it's cool nice and Co away from all the all the craziness I'm stay I'm staying in the middle of Windwood right now M lots of noise lots of craziness over there I was always jumping over there are you from here originally Yeah Yeah from overl from Brownsville area or from Over Miami God okay not too far right do you think Miami's gotten better or worse over the last like 5 to 10 years well of course it's going to be we going to say it's worse because as time goes on everything's jumping up getting more expens yeah speeding up yeah should be all right yeah I'm keep me up L stay well you look like you got a nice spot here it's pretty peaceful pretty nice yeah yeah friends everywhere neighbors do you think the prices and rents are ever going to go down here or do you think they're just going to keep going up they go down yeah yeah go down has to right yeah got everybody be walking the street like a bum got no what to State yeah what's your name Charles I'm Nick Nick nice to meet you Charles so my friend Charles he thinks housing market here is going to crash I agree with them home prices are extremely overvalued when you look at data on reventure app 40% 50% overvaluation rate so you guys are going to make sure to go to ww.

Reventure doapp and look up the overvaluation rate in your zip and see how it's changed over time cuz that's going to help you understand the downside in your market and just one quick thing I want to show you folks before signing off is what we got going on here in this neighborhood we got we got chickens we got chickens running around in the street next to houses for sale for 1.7 million there are, 1600 ft I mean just throw the data out the window for a second on overvaluation and just think about that they're trying to sell you like this area is completely changed like this area is like the place to be forever but we have chickens chickens wandering around nothing against chickens great if you have por fresh eggs but to me that's an indicator that your Market has not yet gentrified if there's chickens on the street you're still probably in the second or third inning of gentrification you got a long way to go before the knockdown houses are worth 1.7 million so with that folks if you appreciate this video make sure to hit the like button go to ww.

reventure doapp and make sure to sign up for a Premium plan $39 a month to access all the data for your local housing market uh particularly overvaluation rate inventory and price Cuts those are the big metrics pay attention to right now especially in Florida.

As found on YouTube

Leave a Comment

Your email address will not be published. Required fields are marked *