Florida’s ongoing insurance dilemma is concerning, and with Hurricane Milton’s impact, the situation is expected to worsen significantly.
We’re at a critical juncture where homes could become unsellable or insurance costs might skyrocket, leading to reduced property values. This may create a cycle where residents recognize homes in Florida as unworthy investments and decide to relocate. Financial institutions may refuse to offer mortgages on homes that cannot be insured. What might begin as a gradual shift at the high end of the market could escalate dramatically, affecting lower-tier properties as well. Demand will plummet while inventory surges.
One potential factor to consider is that the federal government might intervene by implementing a subsidized insurance program for Florida, but the political ramifications of such actions are complicated. Although Republicans may have a vested interest in supporting the state, this approach contradicts traditional Republican principles.
Hence, I propose that without significant federal support, Florida’s property market is destined for significant declines in value, potentially ranging between 30% and 50%, reminiscent of the downturn experienced during the 2008 crisis.