Meanwhile, housing markets in Rochester and
Buffalo are heating up, with homebuyers attracted to relatively low
prices
(NASDAQ: RDFN) — 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 fades further into the rearview mirror. That’s
according to a new report from Redfin (redfin.com), the
technology-powered real estate brokerage.
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.
This is according to a Redfin analysis that ranks the 100 most
populous U.S. metros for which full data is available, 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.
Measures of homebuying demand and competition are dropping off
quickly in Florida, and listings and price drops are surging. Take
North Port, the nation’s fastest cooling market, as an example: 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:
- Increasing intensity of natural disasters: 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 (tied with Texas and
Louisiana). 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.
- A surge in new construction: 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), a building boom coming at a time when high prices
and mortgage rates are dampening homebuying demand. The oversupply
of inventory is cooling competition.
- Sky-high insurance costs: Natural disasters have 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.
- Soaring home prices: 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%. Elevated
prices and insurance costs, combined with today’s high mortgage
rates, are pricing out many locals. They’re also discouraging some
older Americans from moving into a state that has traditionally
been popular with retirees.
“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. “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. 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.”
Housing-market data for the nation’s
fastest-cooling metros
April 2023 to April 2024
Metro area
Median price per square foot
Median price per square foot, YoY
change
Price drops
Price drops, YoY change (in percentage
points)
Off market in 2 weeks
Off market in 2 weeks, YoY change (in
percentage points)
Average sale-to-list price
ratio
Average sale-to-list price ratio, YoY
change (in percentage points)
Inventory, YoY change
North Port, FL
$271.42
-1.2%
42.6%
6.6
31.1%
-12
96.5%
-0.7
68.2%
Tampa, FL
$229.88
3.7%
43.1%
8
39.2%
-11.8
97.3%
-0.5
62.9%
Cape Coral, FL
$243.70
-2.9%
37.5%
4.6
26.1%
-11.7
96.3%
-1
64.1%
“Despite prices softening and the influx of listings, today’s
local buyers face challenges with elevated mortgage rates, special
assessments and the complexities of securing affordable flood
insurance,” said Isabel Arias-Squires, a Redfin Premier agent in
the Cape Coral area. “Many buyers are discovering that
new-construction homes offer a compelling solution. These
properties are not only abundant in our area, but builders like
Lennar and DR Horton offer attractive incentives, such as
contributions towards closing costs and competitive mortgage rates
through in-house financing options. Those incentives can alleviate
the financial strain caused by high interest rates.”
Western New York is heating up
Housing markets in western New York and the Midwest are holding
up best: Rochester takes the number-one spot, followed by Lake
County, IL and Buffalo. Compared to last year, inventory in those
metros is down, price per square foot is up by double digits and
more homes are selling within two weeks.
Homebuying demand and competition is heating up in Rochester and
Buffalo because although prices are increasing, homes are still
much more affordable than they are in most of the country. The
typical home sells for roughly $250,000 in both Rochester and
Buffalo, compared to $440,000 in the U.S. as a whole and $750,000
in the New York City metro, where many remote workers who move to
upstate New York come from.
Housing-market data for the metros
holding up best
April 2023 to April 2024
Metro area
Median price per square foot
Median price per square foot, YoY
change
Price drops
Price drops, YoY change (in percentage
points)
Off market in 2 weeks
Off market in 2 weeks, YoY change (in
percentage points)
Average sale-to-list price
ratio
Average sale-to-list price ratio, YoY
change (in percentage points)
Inventory, YoY change
Rochester, NY
$157.69
11.5%
15.5%
1.2
84%
4
113.2%
2.7
-15.5%
Lake County, IL
$197.96
13%
11.3%
1.1
17.7%
2.6
101.2%
0.9
-11.3%
Buffalo, NY
$169.42
15.2%
22.2%
1.3
73.7%
3.4
104.4%
1.5
-4.2%
Rounding out the top 10 housing markets holding up best are
several metros in the greater New York City area, along with a few
other places. Nassau County, NY comes in fourth, followed by New
Brunswick, NJ and Chicago. Next come Anaheim, CA, New York, Newark,
NJ and Seattle.
To view the full report, including graphics and metro-level
data, please visit:
https://www.redfin.com/news/housing-markets-cooling-fast-florida
About Redfin
Redfin (www.redfin.com) is a technology-powered real estate
company. We help people find a place to live with brokerage,
rentals, lending, title insurance, and renovations services. We run
the country's #1 real estate brokerage site. Our customers can save
thousands in fees while working with a top agent. Our home-buying
customers see homes first with on-demand tours, and our lending and
title services help them close quickly. Customers selling a home
can have our renovations crew fix it up to sell for top dollar. Our
rentals business empowers millions nationwide to find apartments
and houses for rent. Since launching in 2006, we've saved customers
more than $1.6 billion in commissions. We serve more than 100
markets across the U.S. and Canada and employ over 4,000
people.
Redfin’s subsidiaries and affiliated brands include: Bay Equity
Home Loans®, Rent.™, Apartment Guide®, Title Forward® and
WalkScore®.
For more information or to contact a local Redfin real estate
agent, visit www.redfin.com. To learn about housing market trends
and download data, visit the Redfin Data Center. To be added to
Redfin's press release distribution list, email press@redfin.com.
To view Redfin's press center, click here.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240611951502/en/
Redfin Journalist Services: Angela Cherry press@redfin.com
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