Southwest Florida was one of the hottest housing markets during the pandemic. Now, it boasts relatively high levels of unsold properties, according to PulteGroup (PHM).
On the homebuilder's post-earnings conference call Tuesday, CEO Ryan Marshall responded to an analyst question about whether he was concerned about an uptick in existing home inventory in certain markets, such as Florida and Texas.
"Probably the one market that's higher than what we'd ideally like to see would be Southwest Florida," Marshall told investors and analysts on the company's second quarter earnings call. The number of months it would take for the current inventory of homes on the market to sell is roughly nine, he said, "with the benchmark or the kind of equilibrium rate being six months."
He added, “We're a tad elevated."
But he noted, "I wouldn't consider it concerning. That's been a very strong market for a long time. I think it continues to be a really desirable place for retirees and second homeowners."
Pulte’s new orders for the second quarter landed at 7,649, a 3.7% drop year over year and falling short of analysts' expectations of 8,392 homes, per Bloomberg data. In Florida, buyer appetite was more suppressed, with new orders reaching 1,746 in the three months ending June 30, a nearly 9% drop from the same quarter last year.
Marshall's comments on Florida's housing supply were in line with new National Association of Realtors (NAR) data released Tuesday, which showed that nationwide, the inventory of unsold homes for sale rose 3.1% to 1.32 million in June from the previous month.
"We're seeing a slow shift from a seller's market to a buyer's market," said NAR chief economist Lawrence Yun in a release. "Homes are sitting on the market a bit longer, and sellers are receiving fewer offers. More buyers are insisting on home inspections and appraisals, and inventory is definitively rising on a national basis."
Read more: Is this a good time to buy a house?
According to NAR data, existing home sales in the South slipped 5.9% to an annual rate of 1.76 million units in June from May.
One of the main factors contributing to the slowdown in the market and the rise of inventory, especially in Florida, is the expensive home insurance premiums, driven by the need to protect properties against extreme weather conditions, per Redfin. A Redfin survey in April found nearly three-quarters, or 70.3%, of Florida homeowners said they found themselves in areas affected by rising home insurance costs or changes in coverage in the past year.
Meanwhile, some potential buyers are getting cold feet. A separate Redfin report shows that Florida leads in home purchase agreement cancellations, partly because of the hefty housing insurance costs.
"It's something that the entire country is grappling with, not just Florida. I think we've seen insurance rates go up in a number of states," Marshall said. "Certainly, the issues are maybe more acute in the Florida markets."
Dani Romero is a reporter for Yahoo Finance. Follow her on X @daniromerotv.
Read the latest financial and business news from Yahoo Finance