The Florida real estate market has long been considered a haven for retirees, snowbirds, and investors. However, the area is showing signs of unease as climate-related issues damage infrastructure. Insurance costs and extreme weather events are rising. Shifting investor sentiments have sparked concerns about the sustainability of Florida’s formerly booming $180 billion residential property market.
Recent data shows a slowdown in home sales across the state, with industry experts warning that recurring hurricanes, record-high temperatures, and inflation could erode Florida’s appeal as a desirable place to live and invest.
Investor House Purchases Decline as Market Shifts
The Seattle-based real estate brokerage RedFin has reported a decline in investment activity in Florida’s housing market. Investor purchases in major urban areas such as Fort Lauderdale and Miami have dropped by 23.8% and 19.4%, respectively.
Overall, the state saw a 10.2% decrease in home purchases from October 2023 to October 2024. Additionally, the average number of days homes remained on the market increased from 44 days in October 2023 to a whopping 67 days just a year later.
The Federal Reserve Bank of St. Louis has also reported a steady rise in the number of unsold homes in Florida, which reached a peak of 153,052 properties in December 2024. These drastic figures suggest growing hesitancy among buyers, especially in areas vulnerable to hurricanes and flooding.
Climate Change Pushing Relocation
Concerns over affordability and safety have led some homeowners to seek living arrangements outside of Florida. Sergio Blandón, a former Florida resident, has returned to his home country in Nicaragua after three years in the state. He claims that high insurance rates and mortgage costs were key factors in his decision.
Similarly, moving companies have noticed an uptick in residents leaving the state to more affordable locations. Lenin García, the owner of The Perfect Moving, has noticed that the company has relocated over 50 households, especially to states like Connecticut, Georgia, Pennsylvania, and Texas. Homeowners blame rising rental costs and worries about hurricanes as the primary reasons for their relocation.
Coastal Cities Face an Uncertain Future
While South Florida’s urban areas are feeling the effects of shifting market trends, even the smaller coastal communities like Cedar Key have also been impacted.
The 2024 hurricane season, which saw devastating property damage and financial loss from Hurricane Helene, has made residents rethink their location. According to CoreLogic, a real estate analytics firm, the total insured wind losses from Helene alone could reach $1.43 billion. Broader wind and flood damage estimates range from $30.5 billion to $47.5 billion across multiple states.
Local real estate agents in Cedar Key, such as Romelia Pina, an agent with Delux Royal Real Estate, have noted that many homeowners affected by recent storms are choosing to move to inland cities such as Sarasota and other central Florida cities. In the last months of 2024, six out of seven properties Pina sold belonged to homeowners who had chosen to relocate.
A Divided Market: Choosing to Leave or Stay
While some residents are fleeing, others remain deeply connected to Florida’s coastal lifestyle. Chad Osteen, a fourth-generation Cedar Key fisherman, said that despite damages inflicted by Hurricane Helene, his family has no intentions of leaving. His mother, who is 78 years old, has plans to rebuild her flooded house rather than relocate.
Osteen himself has adapted to the post-hurricane conditions by working on debris removal in Cedar Key Beach. As Florida continues to face an uptick of natural disasters, some communities have chosen to stay and rebuild.
Uncertain Future for Florida Real Estate
The impact of climate change on Florida’s housing market is multifaceted. On the one hand, some buyers are still drawn to the state’s warm climate and cultural appeal. On the other hand, economic pressures, extreme weather, and rising insurance costs may push others out.
Experts are unsure whether Florida’s real estate market can ultimately adapt to the harsh conditions or will experience a long-term decline. Can the state’s housing market withstand the growing impact of climate change, or is its reputation as a real estate hotspot bound to fade away?
