ST. PETERSBURG — Frank and Shirley Davis are desperate.
The Shore Acres homeowners, in their late 70s and in failing health, are eager to move to Philadelphia and into their daughter's care.
But just weeks after they listed their quaint brick rancher for $175,000, dramatic flood-insurance changes kicked in. Anyone who bought the home would have to pay nearly $4,000 in annual premiums, if not more.
Interested buyers who had toured the house suddenly disappeared.
"The market dried up. It died," Shirley Davis said, sitting in the front room of the home she has lived in for more than three decades. "Now, they call and the first question is, 'Is it in a flood zone?' We just want to sell, and we're stuck."
For months, homeowners worried about the damage spiking flood-insurance rates could wreak on their neighborhoods. Now, we have the sales numbers since the Biggert-Waters Flood Insurance Reform Act rate hikes took effect Oct. 1 — and they're not good.
Sales in flood-zone neighborhoods like Shore Acres, the Pinellas beaches and inland St. Petersburg have plunged to the slowest pace in years, according to Realtor data analyzed by the Tampa Bay Times.
"We're getting nailed big time," said Re/Max managing broker Bonnie Davis. "The real estate market here had come back so strong. … Now, sales have almost come to a complete standstill."
In Shore Acres, only seven single-family homes were bought with mortgages in October and November, the slowest two months since local home prices hit bottom two years ago.
And across Pinellas County's southern beaches, 12 homes sold in October and 21 in November. Since 2011, that area from Redington Shores to St. Pete Beach has averaged 34 home sales a month.
Higher-priced flood-zone neighborhoods, like in South Tampa and Davis Islands, appear better insulated, with still-robust sales likely driven by buyers who can afford the swing in rates.
But sales in some middle-class neighborhoods, where shifts in rates are that much more pronounced, have crumbled.
Across St. Petersburg neighborhoods Holiday Park, Disston Heights and Garden Manor, only one home sold in all of November, down from an average this year of about eight homes a month.
"Nobody's willing to buy because they don't know what's going on," said Cliff Roe, who runs Roe Realty in Seminole. "I don't see it getting any better any time soon."
Crafted to help pay the National Flood Insurance Program's $24 billion debt, Biggert-Waters changes axed subsidies on millions of older American homes, most of them built at least 30 years ago. Those changes are hitting particularly hard in Pinellas County, and in Florida, both of which lead the nation in the number of subsidized policies.
Many homeowners' insurance rates, weaned off the subsidy, could jump by about 20 percent a year. But buyers looking at flood-zone homes would face an even steeper climb. Their subsidies would be removed all at once, meaning their rates could multiply, with premiums in the $2,000 range rocketing past $10,000 or more.
The sticker shock of steep insurance quotes has sent eager buyers running, and many Realtors now regard flood-zone neighborhoods as toxic. Once-active searchers interested in making the jump to a new home have downgraded to casual searchers, watching and waiting from afar.
"There's so much uncertainty floating around, and misinformation, and it's affecting people's thought processes," Re/Max agent Brandon Rimes said. "When people start getting scared, they go into stalemate."
It's still too early to tell whether the collapse in sales will last, or if the flood-insurance hikes are solely to blame. Growing mortgage rates, backpedaling investors and the winter doldrums might have also played a role in the recent slowdown in Tampa Bay sales.
But agents say it's clear the insurance panic has already devastated some neighborhood sales. Many buyers flat-out refuse to look at "flood homes" in neighborhoods they feel are at risk, opting instead to tour only homes with the badge of honor: "No flood-insurance required!"
That has further shrunk an already-low inventory of homes for sale, which agents say has helped boost the prices for non-flood homes. One home not needing flood insurance, and just blocks away from the Davises in Shore Acres, had seven showings scheduled in a day, Smith & Associates agent Liane Jamason said.
Agents needing leads on flood homes have turned to an unconventional mix of investors and international buyers, most of whom are looking for rentals, fixer-uppers or homes they can quickly flip, and who are eager to capitalize on discounted homes. Because they pay with cash, they can "self-insure," avoiding high insurance rates.
Agents have begun packaging flood homes to sell in bulk to investors. In some cases, agents have agreed to sell a coveted non-flood home only if the investor agrees to buy a home in a flood zone, too.
"We're saying, 'I'll give you one flood for one non-flood,' because the non-flood get gobbled up so quick," said Kelly Lee McFrederick, the Re/Max agent listing the Davises' home.
Some homeowners worry the shift could inject absentee owners and renters into traditionally owner-occupied neighborhoods. Sellers stuck without buyers, including many who are elderly or on fixed incomes, have moved and are struggling to sell the homes or manage the properties from another state.
After a year in which the local housing market seemed to have finally begun recovering, some agents said they have whiplash from the sudden worries over a new real estate crisis. Some are expecting the worst, predicting homeowners who can't sell or afford their insurance payments could fall into foreclosure and lose their homes.
Others expect it could have a ripple effect through the ranks of the real estate industry. Roe, the Seminole real estate broker, said, "You're going to see an awful lot of people get out of the business who just got into it."
Some agents are optimistic a late change by lawmakers could smooth over insurance woes before the market gets any worse. Though Congress adjourned for the year without addressing a proposed four-year pause in the rate hikes, votes scheduled for next year could delay some of the reforms. Florida state senators this month filed a bill that would encourage private insurers to join the Florida market in hopes they'd offer lower rates.
Agents say they've found early success with private insurers, who can offer similar coverage without the federal rate hikes. But not all banks accept their coverage, and insurers have their own rules that could serve as new obstacles for buyers and sellers.
Back in Shore Acres, Frank and Shirley Davis have done all they can think of to make their home ready to sell. They've advertised that it has "never had a drop of water" from flooding, and slashed $5,000 off the price. To ensure it's move-in ready, they piled boxes of their things along every wall in the garage.
Now, four months in waiting, they're beginning to worry their home's flood-zone scarlet letter could sink them for good. The phone has stopped ringing; no one has shown interest in weeks. Their boxes have been in the garage so long they barely remember what they put in them.
If they're not out by February, they plan to leave the keys for the three-bedroom home with their agent and leave town.
Shirley Davis said she knows "miracles still happen," because some homes in her neighborhood have sold. But the more she thinks about the onslaught of spiking insurance rates, the more she begins to worry the damage has already been done.
"I know what this house was constructed of. It's a good house. I thought I'd be out in two months," she said. "Now, I don't know what to think. I feel like our lives are a cartoon."
Times staff writer Jeff Harrington contributed to this report. Drew Harwell can be reached at (727) 893-8252 or firstname.lastname@example.org.