Uncommon Knowledge
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The ongoing insurance crisis in Florida, fueled by the exodus of major insurers and the increased risk of extreme weather events, could trigger a downturn in the state’s real estate market, experts told Newsweek.
Homeowners in the Sunshine State currently pay the highest insurance premiums in the country. Floridians pay private insurers an average premium of about $6,000 a year, according to the latest data from the Insurance Information Institute, or Triple I, according to Barron’s and CNN Business, compared to the national average of $1,700.
Few people can self-ensure against the loss of their homes, and banks require an insurance policy to protect their collateral and provide a mortgage for a house.
The increasingly unaffordable cost of home insurance risks leaving residents uncovered, and thus unable to get a mortgage should they want to buy a new home, which could escalate to a statewide decline in the real estate sector.
“If you don’t have an insurance policy, it’s basically impossible to take out a mortgage,” Benjamin Keys, an economist and a professor of real estate and finance at the University of Pennsylvania’s Wharton School, told Newsweek.
“And given the important role that financing plays in the housing market, without a functioning insurance market you don’t have a functioning mortgage market, you don’t have a functioning housing market.”
Because of the higher risk posed by climate change, which scientists expect will increase the frequency and severity of extreme weather events in vulnerable states like Florida, “there are more people living in harm’s way, the severity of the disaster is more extreme and the cost of repairs has gone up,” Keys said. “A number of years with large storms and large claims has put some private insurers out of business and led others to simply leave the state.
“Insurers have also been really concerned that a portion of their elevated claims is due to fraud. And they were successful in pressuring the state Legislature to pass sweeping reform that makes it much more insurer-friendly on the fraud front. But in spite of these changes going through, insurers have not returned to Florida on any large scale.”
Between 2022 and 2023, more than a dozen private insurers left Florida, including Farmers Insurance, leaving many residents with a lack of options to insure their homes and considering “going bare,” going without any coverage on their properties.
According to Keys, “the private market for homeowner insurance has failed” in Florida.
“There’s a large gap in the market of homeowners who would like to have affordable policies from private insurers but are unable to find them and have to turn to a state-run entity called Citizen Property Insurance,” he said.
There are currently an estimated 1.3 million homeowners in the Sunshine State insured by Citizen Property, according to Keys.
Chicago-based real estate investor Sean O’Dowd thinks that the impact of the ongoing insurance crisis in Florida on the state’s real estate market depends on whether you believe the insurance premiums increases of the past couple of years are a blip or a trend.
“In my opinion, I strongly believe it’s a trend,” O’Dowd, who runs a real estate fund buying single-family homes in highly elite school districts and then renting the homes on 3-plus-year leases, told Newsweek.
“I’m an institutional SFR [single-family rental], I’ve spent a lot of time with the biggest institutional SFR players and they have given us explicit warning to stay away from Florida, and that if we buy portfolios in Florida, they won’t buy from us because they’re so negative on Florida in the long run, which is scary.”
CHANDAN KHANNA/AFP via Getty Images
That’s why O’Dowd believes that the current insurance crisis is going to have a “significant negative impact” on the Florida real estate market.
“There’s not a single lender out there that I’m aware of that will give you a mortgage without proof of insurance,” he said.
“The problem is, if you have an insurance payment that’s just as much as the principal and interest payment for the mortgage, if you’ve got an insurance payment that’s five hundred bucks a month, you get to a situation where a homebuyer—especially a first-time homebuyer that doesn’t have a lot of capital to put down for the down payment—has such a weedy monthly payment with this huge insurance premium that they cannot afford to buy a house.”
This is a situation that’s going to “flush a ton of buyers, especially first-time homebuyers and retirees on fixed income, completely out of the market,” O’Dowd said. The impact on the real market then is that homeowners would need to cut prices in order to sell, pulling down the market.
Homebuyers will be hurt by the crisis as much as homeowners, according to O’Dowd.
“Everything that I’ve been told and I’ve been seeing is insurance rates continue to rise, that makes the monthly payment substantially higher, that makes affordability a lot worse, that pushes down prices—with the one caveat of what happens with retirees who frequently buy in cash,” he said.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
🏆 Residential: The top home sale to hit records was in Pinecrest, where a home at 5865 Southwest 96th Street changed hands for $7.8 million. The sellers were Luis and Liz Messianu, who purchased the 7,800-square-foot property in 2024 for $7.3 million. The buyer was Bunny S Sunshine Haven LLC. The home went on the market in February for $8.2 million. Judith and Nathan Zeder with Coldwell Banker Realty had the listing, and Dennis Carvajal with One Sotheby’s International Realty brought the buyer.
🏆 Commercial: The most expensive recorded commercial deal was in Davie, where a school building sold for $16 million at 3367 North University Drive. The seller was 3367 N University Holdings LLC; the buyer was JSI N University LLC. The building measures about 46,000 square feet.
📊 Residential: Matthew and Nadia Weaver purchased a newly built home at 299 Northeast Seventh Street in Boca Raton for $6.8 million. The seller was a company managed by Marco Capoccia. Built this year, the home measures 5,800 square feet and has five bedrooms and five and a half bathrooms. The sale breaks down to about $1,200 per square foot. Jacqueline Feldman with One Sotheby’s International Realty represented both sides of the transaction.
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ANAHEIM, Calif. — In sending Roman Anthony to Fort Myers, Fla., to continue his injury rehabilitation, the Red Sox have assigned him one blunt goal: Make it back to Boston.
The geographic reassignment is “a very good opportunity,” interim manager Chad Tracy said, for Anthony to not have to deal with much other than figuring out a way to return from a partially torn ligament in his right ring finger, which continues to impact his hand/wrist — and, thus, his ability to swing a bat.
“His focus, a singular focus now, is if you’re in Florida, it’s to get yourself healthy and not have to deal with all the other stuff that goes with it,” Tracy said before Sunday night’s series finale against the Angels. “So it’s a singular focus, very focused on getting himself healthy and getting back to us.
“We want him. We want him in the lineup. So I’m going to keep in touch with him frequently and see how he’s doing, with the hope that we get him back.”
And “other stuff” refers to what?
“Just the day-to-day of being at Fenway,” Tracy said. “He’s going to get asked questions about it constantly. And for him being there, his focus is on one thing right now: That’s get yourself healthy.”
When Tracy first mentioned Saturday that the Sox decided Anthony would be based out of their Fenway South spring training/minor league facility indefinitely, he presented it as logistical. The home clubhouse at Fenway had grown crowded because of the number of injured players, he said, so moving Anthony was a way to open space — as the Sox had done with a handful of pitchers previously.
On Sunday, Tracy added: “It’s also a very good opportunity for him to go and get away from” the “other stuff.”
Anthony has been out since May 4, when he got hurt on a seemingly random swing.
Nine weeks later, he has not resumed a hitting program as he and the Sox navigate the highly unusual baseball injury.
This week, Anthony will visit a new doctor: Gary Lourie in Atlanta. Lourie is a hand specialist, the Braves’ head team physician, and a partner at The Hand & Upper Extremity Center of Georgia.
“Just for peace of mind,” Tracy said. “I expect we’re going to be in a good spot. But really just about getting him in a spot where he can focus each day on just pounding away at getting that hand healthy.”
The latest in the plight of Triston Casas: He has suffered from a wrist issue in recent days, Tracy said, so he is shut down from hitting again.
The Red Sox will “check on that” before letting Casas resume anything bat-related, per Tracy.
For Casas, 26, it is another in a string of injuries. He hasn’t played since having knee surgery 14 months ago, and for the past three months he had been trying to return from an abdominal issue.
“He’s gone through a lot,” Tracy said. “Between the knee, he had a little hamstring flareup, obviously the oblique, and then he’s coming back from that, and now there’s a wrist that’s popped up.
“So, just dealing with different things. Having not played in a while, things have popped up. So we’ll keep an eye on him, and once he’s able to, keep progressing as we can.”
Connelly Early’s second opinion, also this week, will be with Dr. Keith Meister in Arlington, Texas, the team said. Meister is a leading orthopedic and sports medicine surgeon who specializes in elbow problems.
Following his early exit Tuesday, Early got an MRI and was diagnosed with posterior elbow inflammation but no structural damage, the Red Sox said Wednesday.
Anthony Seigler batted leadoff for the fourth time in five games. Tracy called him “a logical choice for it” because of his ability to swing at strikes, not swing at balls, and work lengthy at-bats. “He puts the bat on the ball,” Tracy said, “and help hopefully get the game started off right for us” … Masataka Yoshida was the DH, just his second start in a stretch of seven games (amid a run of the Sox facing more lefthanded starters than usual) … The Sox’ next rotation decision is Thursday. They could go with Sonny Gray (on turn), Patrick Sandoval (for his long-awaited team debut), or somebody else against the White Sox.
Tim Healey can be reached at timothy.healey@globe.com. Follow him @timbhealey.
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