West Florida Housing Markets Cooling Fastest in US

Housing markets in western Florida are cooling faster than anywhere else in the country as natural disasters intensify, new construction soars and the pandemic-era homebuying demand boom continues to face, according to Redfin. It reports that North Port’s housing market is cooling fastest, followed by Tampa and Cape Coral. There are three other Florida metros on the list of 10 housing markets cooling quickest: Orlando, FL comes next, followed by Denver, Houston, Minneapolis, Jacksonville, FL, Lakeland, FL and Dallas.

Redfin analyzed and ranked the 100 most populous US metros based on how quickly measures of homebuying demand and competition cooled from April 2023 to April 2024. The measures are year-over-year changes in home prices, price drops, inventory, sale-to-list price ratio and the share of homes that sell within two weeks.

In North Port, the supply of homes for sale is up 68% year over year, the second-biggest increase of the metros in Redfin’s analysis. Meanwhile, the median price per square foot is down 1.2%, making North Port one of just four metros where price per square foot declined (the others are Cape Coral, San Antonio and Austin, TX), and 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.

There are several reasons housing markets on the west coast of Florida are cooling quickly, most of them tied to the growing prevalence of natural disasters in the area, Redfin says. In the Cape Coral metro alone, 2022’s Hurricane Ian destroyed 5,000 homes and damaged nearly 30,000 more. Natural disasters are not only destroying homes—which is one contributor to a surge in new construction, as builders replace homes that have been lost—but they’re scaring away some prospective homebuyers from the area. Natural disasters have also pushed up Florida’s home insurance costs. Many homeowners are reporting their insurance jumping by thousands of dollars, and a recent Redfin survey found that 70% of Florida homeowners have seen home insurance costs rise recently.

At the same time Florida is building more new homes than any other state in the country (aside from Texas, which is also home to two of the nation’s 10 fastest-cooling housing markets). This building boom is happening amid high prices and mortgage rates that are dampening homebuying demand. The oversupply of inventory is cooling competition.

Furthermore, although prices in some parts of Florida have started declining in recent months, homes are much costlier than before the pandemic homebuying boom, when 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%.