Florida has become one of the hottest states in the country for its sleepy beach towns and retirement communities. In a pandemic-fueled migration frenzy, people flocked to Florida in search of lower housing costs and favorable year-round weather. In 2022, Florida was named the fastest-growing state in the country — a title it hasn’t received since 1957.
Several Florida cities rank high on the U.S. News Best Places to Retire and Best Places to Live lists. But Florida isn’t just sunshine, beaches and budget-friendly housing. Homeowners in the Sunshine State face some unique challenges.
It’s important for prospective buyers to be aware of the challenges of homeownership in the land of eternal summer. Here are five hard truths about owning property in Florida.
[READ: How to Decide Where to Live.]
1. Termites
In Florida, it’s not a matter of whether you will have termites or not — it’s when and how often you will have them.
There are 20 different types of termites in Florida, according to the University of Florida. Termites, of course, aren’t exclusive to Florida. These pesky wood-eaters love warm weather and can be found in every state except Alaska. But Florida is the state with the worst termite damage, according to a report from Ground Works, a national foundation and water management solutions company headquartered in Virginia Beach, Virginia.
Termites that live underground, aptly called subterranean termites, are the most common type of termites in Florida. While small in size, these concealed critters can cause major damage if they go untreated. It’s such a widespread issue that a report published by the University of Florida predicts half of homes in south Florida will battle subterranean termite infestations by 2040.
Treatment options, such as tenting the home or addressing the soil, will depend on the type of termites present. The cost can range from just over $1,000 to $6,000 or more, depending on the treatment needed and the size of the home.
It’s also important to know that treatment doesn’t mean your home is protected for life. New infestations from the same or different termite species can force you to treat the same home multiple times. Most pest control companies offer a bond to cover the house for future treatments over a two- to five-year period because reoccurrences are so common.
[READ: Termite Inspections: Cost and What to Expect]
2. Sinkholes
While sinkholes are not super common, Florida has more sinkholes than any other state, according to the U.S. Geological Survey (USGS).
Florida’s delicate foundation of limestone can easily erode with groundwater movement. Eventually, this creates a cavern that can collapse from the weight above it. Areas with abundant freshwater springs, like central and northern Florida, are more susceptible to sinkholes than other areas of the state.
Technically, all Florida homeowners’ insurance is required to provide sinkhole coverage. However, there is a lot of red tape around what would be covered by such a policy. It will depend on the quality of the ground structure and most times insurance will not cover sinkholes that did not result in structural damage to the home.
According to Florida’s Department of Financial Services, a “crack stretching across an interior wall or floor tiles popping up from the home’s foundation may not constitute structural damage,” and thus not be covered under your policy. You can mitigate your risk of this by conducting sinkhole testing on a prospective home before buying.
3. Hurricanes and Flood Risks
Since 1851, Florida has been hit by 121 hurricanes, the most of any state in the country. And 38 of the storms that made landfall were Category 3 or higher, which means they had sustained winds of at least 111 miles per hour. Hurricane season lasts five months in Florida, from June 1 to Nov. 30. That’s a large window, and one that many homeowners coming from other states aren’t prepared for.
Knowing hurricanes happen in Florida is one thing. Dealing with them is another. “Going through a hurricane gave me and my husband a totally new perspective,” says Rae Miller, a Florida homeowner who moved to central Florida during the pandemic. “Seeing how it hit other parts of the state helped us realize the realities of living in a location with hurricanes.”
Miller says the experience will better prepare the couple for future storms.
“We consider ourselves lucky because we only had one blown-down fence, a handful of fallen tree limbs and some flooding,” Miller says. “We’re still happy with our decision to purchase a home in Florida, but extra pleased we bought a home inland, which reduces our risk of hurricane damage.”
Homeowners can protect their homes from storm damage through a standard insurance policy. However, these policies normally only cover damage from wind or debris — not flooding. Storm surge flooding is typically excluded unless an optional rider or separate flood insurance policy is purchased.
[READ: Can You Build a Hurricane-Proof House?]
4. Insurance Issues
The high cost of homeowners’ insurance premiums in Florida can be a rude awakening for those moving from lower-cost states. But there’s also the challenge of needing to buy additional coverage for full protection.
Florida law requires all homes in “high-risk zones” to purchase flood insurance. The cost will depend on your home’s unique risk. New homes in Florida are being built to specific hurricane and flood ratings, which lowers the cost of annual flood insurance. But if you are in a high-risk zone or in a home that doesn’t meet these new standards, this insurance can cost hundreds to thousands of dollars more per year.
There’s also the challenge of a shrinking insurance market. Over the last few years, a growing number of insurance providers are pulling coverage from Florida, leaving homeowners with fewer and fewer options. This has increased insurance premiums. The Insurance Information Institute projected that property insurance rates in Florida could increase by at least 40% in 2023.
“After Category 4 Hurricane Ian devastated the Gulf Coast in 2022, I received a notice from my homeowner insurance company saying they were no longer providing coverage in Florida. We only had 30 days to get a new policy,” said Michelle Banks, who owns a home in St. Petersburg. “It had been over 10 years since we bought the house and had an inspection done. So we had to order a new four-point inspection, which cost us $100. Then we had to pay for some repairs to meet new insurance codes. In the end, no private company would cover us, so we had to get a policy with the state-funded program, Citizens Insurance.”
Citizens Property Insurance Corporation is a state-run, nonprofit insurance carrier for Florida residents who are unable to find coverage from private insurance companies. It is not meant to be a permanent solution. The company constantly shops for private insurance for its policyholders. If it finds coverage within 20% of its own cost, you’ll no longer be eligible for its coverage, which can, once again, leave homeowners in a challenging position.
5. Competitive Housing Market
Florida boasts the nation’s second-most-valuable real estate market, surpassing New York, while California retains the top spot, according to an October Zillow report. A lot of homebuyers coming from out of state are looking for a more affordable cost of living. The median home price in Florida as of October 2023 was $403,700, according to Redfin. That’s cheaper than high-cost states like California or New York, where the median price is $800,100 and $484,600, respectively.
These two states make up the highest portion of migration to Florida over the last few years and are big reason prices in several cities in Florida are still soaring. Many markets continue to see multiple offers and double-digit year-over-year home price growth. This competitiveness and low housing supply makes it a tough state to enter.
“Hyperinflation has impacted communities all over Florida,” says Veronica Frost, who lives in Cooper City, a suburb of Miami-Fort Lauderdale. “We bought our house in August of 2019 thinking it would be the perfect starter home. Since then, the real estate market has taken off and we’re feeling stuck.
“We say all the time, we have no idea when we’ll be able to get into a bigger house. For now, we just wait and hope it comes down soon.”
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5 Harsh Realities of Homeownership in Florida originally appeared on usnews.com
