Florida's housing market was once red-hot. Now it's one of the coldest in the country

Florida’s once “red-hot” housing market has cooled sharply, weighed down by surging insurance costs, repeated natural disasters, and a surge in available inventory, which has shifted bargaining power toward buyers in many parts of the state. Cities such as Cape Coral–Fort Myers and Tampa illustrate the trend most clearly, with significant price declines and a wave of canceled contracts as buyers confront the dual challenge of elevated home prices and skyrocketing insurance premiums, compounded by environmental risks.

The cost side of ownership is a major factor. Florida homeowners are grappling with steeply rising insurance premiums and higher HOA fees, particularly in areas vulnerable to hurricanes. These growing expenses make properties less affordable and have added an extra layer of hesitation for potential buyers. Meanwhile, the increasing frequency and severity of natural disasters has amplified these concerns, with some prospective homeowners backing away at the last minute.

At the same time, the number of homes on the market has climbed meaningfully, giving buyers far more choice than in recent years. That shift in supply has led to a cooling in demand, especially from investors who once fueled the boom but are now stepping back in the face of higher costs and thinner margins. The result has been visible price cuts in several regions, with Cape Coral–Fort Myers seeing some of the steepest year-over-year drops in median list prices.

In Tampa and other cities, canceled contracts have hit record levels, a reflection of both affordability pressures and buyer uncertainty. Overall, Florida’s market is moving away from the frenzied pace of recent years toward a slower environment where buyers hold more leverage, sellers face growing competition, and affordability challenges continue to weigh heavily on demand.