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By Giulia Carbonaro
Senior Reporter
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Housing markets on Florida's west coast are cooling down faster than anywhere else in the country, according to a recent Redfin report, with North Port leading this trend and reporting price drops of 6.6 percentage points between April 2023 and April 2024.
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"Measures of homebuying demand and competition are dropping off quickly in Florida, and listings and price drops are surging," said the report.
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The median price per square foot of a home in North Port, the fastest-cooling housing market in the entire country, was $271.42 in April, down 1.2 percent compared to a year earlier. It was followed by Tampa, which experienced price drops of 8.0 percentage points year-over-year, and Cape Coral, which reported price drops of 4.6 percentage points from April 2023.
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While in Tampa the median price per square foot of a home was $229.88 in April, up 3.7 percent compared to a year earlier, Cape Coral experienced a drop, with the price sliding by 2.9 percent year-over-year to $243.70 in the same month. Orlando, Florida, was the fourth-fastest cooling metro in the country, with price drops of 4.6 percentage points between April 2023 and April 2024.
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Prices are cooling so fast in Florida's west coast because of a new-construction boom which is increasing inventory in the state, a drop in demand linked to unaffordable prices and high mortgage rates, and the beginning of a potentially devastating hurricane season which could send already-high home insurance premiums skyrocketing.
Natural disasters like Hurricane Ian in 2022, which destroyed approximately 5,000 homes and damaged nearly 30,000 others in Cape Coral alone, are a leading contributor to a surge in new construction in the region, as builders work to replace homes that have been lost.
These same natural disasters, and their expected increase in frequency and severity due to climate change, are leading private insurers to hike homeowners' premiums—another factor discouraging demand in these markets.
"Inventory is back up to pre-pandemic levels along the west coast of Florida as natural disasters continue to shape the region's housing market by leading to more supply and less demand," said Redfin Senior Economist Elijah de la Campa in a news release.
"Construction is booming in the wake of recent climate disasters, and there's less demand to buy new homes as the region braces for another intense hurricane season," he continued, adding that the drop in prices is likely to be welcome news for aspiring homebuyers in the long term.
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"While that's disappointing for sellers, who may have to part with their home for less money than they would like, a bigger pool of listings to choose from is good news for the region's homebuyers. More supply is the best way to bring down prices and combat the housing affordability crisis buyers are facing today—and that's exactly what's happening in parts of Florida."
Newsweek contacted Redfin for comment on the report's findings by email on Wednesday morning.
Despite the fact that these markets are quickly cooling down, they remain unaffordable for many. Home prices in North Port are up 60 percent since 2019, according to Redfin, while in Tampa they are now 70 percent higher. At the national level, prices are 40 percent higher than they used to be before the pandemic.
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