Uncommon Knowledge
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Florida
Florida insurance crisis spells mortgage disaster
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.”
Why Do Many Floridians Risk ‘Going Bare’?
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.
What Could Be the Impact on Florida’s Housing Market?
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.
Florida
South Florida shark diving operators push back against Florida Safe Seas Act: “There’s a huge double standard here”
Shark diving operators in South Florida are raising concerns that a bill currently moving through Congress could wipe out their industry.
The Florida Safe Seas Act, which passed the U.S. House of Representatives earlier this month, is now headed to the Senate for consideration. If enacted, the legislation would prohibit the use of bait to attract sharks in federal waters off the Florida coast, though it would include an exception for shark fishing.
Supporters argue the bill will improve safety for swimmers, beachgoers, and anglers. Opponents, however, contend the measure would effectively dismantle the multimillion-dollar shark diving tourism industry in South Florida.
“This industry has created a natural guardianship for sharks; it is showing people that sharks are worth more alive than dead; it’s showing people the importance of sharks, really,” said Tanner Mansell, who operates Tanner Underwater Charters out of Jupiter.
Mansell argues that banning bait would leave operators with no viable alternative. “It would completely eliminate the industry because if we could go out there and swim with sharks without using bait, I would, I would be more than happy to do that,” he said.
He noted that his charters typically operate 3 to 4 miles offshore, well away from beachgoers, and argued that shark fishing from the beach presents a greater safety risk.
“So they’re taking the same chum that we use to attract sharks offshore, but you can put it on a hook and throw it at the beach and lure sharks in if you want to catch them right next to beachgoers, so there’s a huge double standard here,” Mansell said. He also disputed claims that dive charters are responsible for drawing sharks closer to shore, pointing to the high volume of recreational fishing boats in the area.
Conversely, the Bonefish & Tarpon Trust supports the legislation, citing the need to address shark depredation—a situation where sharks target hooked fish or fish being released back into the water.
“I think anything we can do to address the shark depredation issue is going to pay dividends in the long run,” said Kellie Ralston, the organization’s vice president for conservation and public policy.
Ralston highlighted research indicating that more than 40% of breeding permit fish, a key recreational fishery in the state, were being lost to sharks during the catch-and-release process. “I think couched in kind of this larger focus on shark depredation, I think we’re poised to see some really positive results out of this that’ll benefit our anglers, our boaters, our waters and our fisheries to be sustainable for the long term,” she added.
The bill is sponsored by Rep. Daniel Webster, R-Clermont. A spokesperson for Webster’s office stated that the legislation mirrors existing Florida state law prohibiting shark feeding off the coast.
“The bill would extend these protections to federal waters, aligning with existing federal law surrounding Hawaii and Pacific territories,” the spokesperson said. “With the bill passing the U.S. House of Representatives on June 2, it now goes to the Senate for consideration.”
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Sen. Rick Scott continued his crusade against Kanye West’s upcoming Tampa concerts with a fiery press conference at the Florida Holocaust Museum on Monday morning.
Joined by Holocaust survivors, Jewish leaders, fellow Sen. Ashley Moody, and former Republican governor turned Democratic St. Petersburg mayoral candidate Charlie Crist, Scott stood behind a lectern bearing the slogan “Don’t. Fund. Antisemitism.” He gestured to the boxcar on his right, which once transported humans to death camps during the Holocaust.
“Many suffocated in boxcars like these before they even made it,” Scott said. “It all started with questions like the one before us today: Are we going to tolerate this?”
Kanye West’s schedule in Florida
West, who now goes by Ye, has Raymond James Stadium concerts scheduled on June 26 and 28, prompting an outcry from the Tampa Jewish Federation and the Florida chapter of the National Organization for Women. Last week, the Florida Holocaust Museum announced it would offer free admission that weekend.
On June 4, Scott wrote a scathing open letter to the Tampa Sports Authority, which operates Raymond James Stadium. He argued that taxpayer money shouldn’t be used to fund events for West, who sold swastika merchandise and posted a song titled “Heil Hitler” last year.
“People say, ‘Oh, it’s just a concert. Oh, the Tampa Bay Sports Authority is going to make some money, let people have their fun,’” he said. “Some of the worst sins in human history begin with the words, ‘I was just’: ‘I was just going to a concert with my friends,’ ‘I was just trying to make money,’ ‘I was just following orders.’ No, you can’t do that. None of us should be let off the hook for hatred and antisemitism.”
In a new statement following Monday’s press conference, the Tampa Sports Authority pushed back against Scott’s claims.
“We condemn antisemitism from any source. However, we also respect free speech rights guaranteed under the US Constitution, even when we disagree with that speech,” it said. “In addition, no taxpayer money is being used for staging the Ye concerts. To suggest otherwise is false.”
Ye has a long history of antisemitism
This spring, Ye published an apology for his antisemitism in the Wall Street Journal, attributing his behavior to his bipolar disorder and brain damage caused by a car accident. Despite this, his behavior prompted European officials to block him from entering the UK, effectively canceling some concerts there.
“Why is it that other countries can tell him no, and we don’t do that? We’ve accepted him,” said Toni Rinde, an 85-year-old Holocaust survivor who traveled from Clearwater to speak at the press conference. “Why? Why is this person being so hateful, trying to destroy people?”
Janet Hammer, a volunteer at the Jewish Federation of Florida’s Gulf Coast, spoke out against the concerts at last week’s Tampa City Council meeting and sent letters to her elected officials.
“There are people who have not been educated to understand what Nazis represent. He is glamorizing hatred,” she said. “We should have a ticket buyback program. Because to me, it’s not just the profit that’s going to be made. It’s how many individuals are going to be hearing this person, and who knows what the messaging is that he’s going to share?”
After the press conference, Hammer said she is still looking for ways to fight back against the concert.
“It’s like a done deal. That’s unacceptable in my eyes,” she said. “I left there asking, ’What more can I do?’”
🏆 Residential: The top home sale to hit records in South Florida was in Miami, where the 4,400-square-foot at 733 Belle Meade Boulevard changed hands for $9.2 million. The seller was an LLC tied to entrepreneur Andrew Sieja and his wife, philanthropist Jessica Sieja. The buyer was Joshua Keller. The waterfront property has five bedrooms and five and a half bathrooms. It last sold in 2021 for $8.3 million. It went on the market in January for $10 million. Miltiadis Kastanis with Compass had the listing, and Dan Hechtkopf, also with Compass, brought the buyer.
🏆 Commercial: The priciest commercial deal was in Hollywood, where the hotel known as the Rooftop Resort at 1215 North Ocean Drive sold for $6.9 million. Built in the 1970s, the property spans 16,500 square feet and has 34 rooms. The seller was an LLC tied to Pamela Riccio and the buyer was an LLC managed by Michael Delouya, Thierry Cohen and Daniel Benhamou. The Rotella Group had the listing.
📊 Residential: In Miami Beach, a 4,500-square-foot condo at 1011 West 48th Street sold for $8 million or roughly $1,800 per square foot. The seller was a company managed by Ansir Junaid, founder of the Junaid Group, which operates business across a range of industries from real estate to healthcare, and the buyer was an entity led by Robert Curran. The unit, which has four bedrooms and four and a half bathrooms, previously sold in 2023 for $8.3 million. Its most recent asking price was $9.5 million. One Sotheby’s International Realty’s Chelsea Werner had the listing, and Ximetta Mires with Global Luxury Realty represented the buyer.
By the Numbers: Number of underwater homes in the US reached 2M
The number of underwater homes in the U.S. is rapidly growing.
For the first time since 2021, the number of homes where loan balances sit at least 25 percent higher than a property’s estimated market value passed the 2 million mark. The figure represents a 15 percent year-over-year increase, according to a new report from real estate analytics firm Attom.
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