Florida‘s housing markets on the West Coast are showing signs of cooling more rapidly compared to other parts of the nation. A recent Redfin report noted a significant decline in prices, with North Port leading the way with a 6.6 percentage point drop from April 2023 to April 2024.
The report highlighted a decrease in homebuying competition and demand in Florida, while prices and listings are on the rise. In North Port, the median price per square foot for a house in April was $271.42, down by 1.2 percent from the previous year. Tampa and Cape Coral also experienced price declines of 8% and 4.6% respectively.
Tampa recorded a median home price of $229.88 per square foot in April, up by 3.7% from a year ago. Conversely, Cape Coral saw a 2.9% price decrease to $243.70. Orlando ranked fourth in cooling rates with a 4.6 percentage point drop during the same period.
Rapid drops in prices on Florida’s west coast are attributed to a new construction boom, leading to increased inventory but declining demand due to high mortgage rates and unaffordable housing costs. The looming hurricane season could further exacerbate the situation by increasing already high home insurance rates.
The construction boom in Cape Coral is a response to natural disasters like Hurricane Ian in 2022, spurring the need for new home replacements. Heightened climate change effects are also pressuring insurers to hike homeowners’ premiums, creating further demand deterrents.
Redfin’s Senior economist highlighted that natural disasters are influencing the market by increasing supply and reducing demand in the West Coast of Florida. Despite the challenging scenario, the price drop is expected to benefit home buyers in the long term.
This cooling trend, though unfavorable for sellers, presents a silver lining for buyers with increased options. More supply can help lower prices and address the current housing affordability crisis. North Port’s home prices are now 60% higher than in 2019, while Tampa’s have surged by 70%. The national average price also sits at a 40% increase from pre-pandemic levels.