Florida's housing market had a meteoric rise in the past few years, as its affordable prices and sunny weather attracted tons of homebuyers during the pandemic-era housing boom. But much has changed since then with natural disasters intensifying, new construction soaring, and buyer demand fading as time passes. According to a new Redfin analysis of data collected between April 2023 to April 2024, markets along Florida's western coast are cooling faster than anywhere else in the country.
North Port's housing market is cooling down the fastest, followed by Tampa and Cape Coral. There are three other Florida metros on the list of the 10 U.S. housing markets cooling quickest. Orlando places fourth, followed by Denver, Houston, Minneapolis, Jacksonville, and Lakeland, FL, along with Dallas.
Homebuying demand and competition were quick to fall off in Florida, as evident through the surge in listings and price drops. North Point, for example, saw its supply of homes for sale increase 68% from last year, the second-biggest increase among Redfin’s analysis of metros. The median price per square foot is down 1.2%, making North Port one of just four metros where price per square foot declined. Plus, 42.6% of sellers are dropping their asking price — up from 36% a year earlier. In Cape Coral, inventory is up 64%, median price per square foot is down 2.9%, and 37.5% of sellers are dropping their price, up from 32.9% a year earlier.
Redfin listed several reasons why Florida’s west coast housing markets are cooling the quickest with most of them tied to the growing prevalence of natural disasters in the area.
Due to the rising intensity of natural disasters, such as hurricanes, floods, and other severe weather events, have become more frequent and intense in Florida. Destruction from climate disasters cost Florida more money than any other state. In the Cape Coral metro alone, 2022’s Hurricane Ian destroyed 5,000 homes and damaged nearly 30,000 more.
Florida is building more new homes than any other state in the country, aside from Texas, at a time when high prices and mortgage rates are dampening homebuyer demand. The oversupply of inventory is cooling competition.
Sky-high insurance costs due to natural disasters have also impacted homeowners and buyers. A recent Redfin survey found that 70% of Florida homeowners have seen home insurance costs rise recently.
Although some parts of Florida have seen home prices decline, homes are still much more expensive than before the pandemic-era homebuying boom, because many affluent remote workers moved in and pushed up prices. North Port prices are up about 60% since 2019, and Tampa prices are up nearly 70% — much bigger than the national increase of about 40%.
