Florida’s Housing Market Cools Amid New Construction Boom and Rising Insurance Costs, While Rochester and Buffalo Thrive
Florida’s West Coast Housing Market Cools as New Construction Surges Amid Rising Insurance Costs
As Florida’s west coast grapples with the dual challenges of natural disasters and soaring insurance costs, the housing market is experiencing a significant shift. A recent analysis by Redfin reveals that new construction is driving listings to pre-pandemic levels, cooling competition in a region once characterized by frenzied homebuying activity.
The data indicates that the housing markets in North Port, Tampa, and Cape Coral are cooling faster than any other areas in the country. North Port, in particular, has emerged as the nation’s fastest-cooling market, with a staggering 68% increase in the supply of homes for sale year-over-year. Meanwhile, the median price per square foot has dipped by 1.2%, and nearly 43% of sellers are reducing their asking prices—up from 36% a year earlier.
This cooling trend is largely attributed to the increasing frequency and intensity of natural disasters in Florida. Hurricanes and floods have not only destroyed homes but have also instilled fear in potential buyers. The aftermath of Hurricane Ian, which devastated the Cape Coral area in 2022, serves as a stark reminder of the risks associated with homeownership in the region.
In addition to the impact of natural disasters, Florida is witnessing a surge in new construction. The state is currently leading the nation in new home builds, a response to both the demand for housing and the need to replace homes lost to climate-related events. However, this influx of new inventory is contributing to a cooling of competition, as high prices and rising mortgage rates continue to dampen homebuying demand.
Insurance costs are another significant factor weighing on the minds of prospective buyers. Many Florida homeowners have reported dramatic increases in their insurance premiums, with a recent survey indicating that 70% have seen their costs rise. This financial strain is further discouraging potential buyers, particularly older Americans who have traditionally flocked to the Sunshine State for retirement.
“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. “While this is disappointing for sellers, it presents an opportunity for buyers who are facing a housing affordability crisis.”
In stark contrast to the cooling markets of Florida, cities like Rochester and Buffalo in western New York are experiencing a housing boom. With median home prices around $250,000—significantly lower than the national average of $440,000—these markets are attracting buyers seeking affordability. Rochester, in particular, has seen a 15.5% increase in the median price per square foot over the past year, with homes selling faster than ever.
As the housing landscape continues to evolve, the dynamics between supply and demand are shifting dramatically. For buyers in Florida, the surge in new construction and increased inventory may provide a much-needed respite from the high costs that have characterized the market in recent years. Meanwhile, regions like Rochester and Buffalo are proving that affordability can still drive competition in the housing market, even as other areas cool off.