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Changes in the housing market are causing concern for homebuyers in three states

Expensive insurance costs, high prices and increased mortgage rates are cooling the housing market in three states – Texas, Florida and Louisiana. According to Realtor.com, homes there are taking longer to sell, creating new opportunities for buyers. But analysts also warn that it could take longer to sell those properties later.

Of the 20 regions in the country that the real estate platform currently classifies as “cold” markets, 15 are in states near or along the Gulf Coast. The Lake Charles and Houma-Thibodaux areas in Louisiana and the cities of Panama City, Punta Gorda and Naples-Marco Island in Florida were all designated as cold by Realtor.com. They were joined by McAllen-Edinburg-Mission and Brownsville-Harlingen in Texas.

These markets are seeing a large influx of new homes, which could put downward pressure on prices and potentially give buyers more options.

“For homebuyers seeking convenience, Southern markets are offering much-needed hospitality,” said Ralph McLaughlin, economist at Realtor.com, in a press release. “Supply — especially of entry-level homes — is growing, they are moving slower, and asking prices are actually down compared to last year.”

Miami
A general view from a balcony of the “Prive, My Private Island” luxury condominiums in Aventura, Florida, on May 22, 2017. The real estate market in Florida has slowed in recent months.

RHONA WISE/AFP via Getty Images

He warns that the downside of lower offers is that buying a home in these markets could mean owners have to hold on to their home for a long time if they want to sell it.

“What’s the catch? If you have to sell soon, you’ll be faced with the other side of the coin,” McLaughlin said.

Realtor.com determines market coldness or heat based on the length of time the average home stays on the market, total supply, price changes, and how often a listing is viewed by potential buyers.

Markets in Texas, Florida and Louisiana are struggling with the nationwide dynamic of expensive home loans and high home prices. In addition, climate change-related weather disruptions in these states have led to rising insurance costs, making home affordability even more difficult for buyers in these areas.

These challenges have caused buyers to be cautious when purchasing a home in these parts of the country.

Realtor.com noted that in cold markets, buyers can take their time and be more selective in choosing their investment location because of the large number of options available to them.

“Home buyers in cold markets can keep a cool head when buying a home because they don’t have to act quickly and don’t have to buy the first house they see,” McLaughlin said.