Home prices have seen a significant drop of up to 12% over the past year in several Florida cities, as well as in Texas and across metropolitan areas in the United States, according to reliable sources in the real estate industry. A report by Realtor.com, cited by Business Insider, highlights this decline as notably sharper compared to the rest of the nation, where the median property price decreased by only 1% year-over-year as of last September.
Leading the list of U.S. cities with the steepest declines in home prices are three from Florida: Miami, Fort Lauderdale, and Pompano Beach, all experiencing a median price of $525,000, marking a 12.4% decrease compared to 2023. Jacksonville stands alone in sixth place with a median of $399,000 and a 6.1% drop; Orlando, Kissimmee, and Sanford share the eighth spot at $429,950, down 5.6%; while Tampa, St. Petersburg, and Clearwater are ninth at $414,948, seeing a 5.5% reduction.
Factors Contributing to the Decline
The demand in cities that boomed during the COVID-19 pandemic has waned over the past year, particularly in Florida and Texas. Rising living costs, severe weather events, and an increasingly tense political climate have caused dissatisfaction among some residents, as reported by Business Insider. In these areas, a surplus of housing inventory now exceeds buyer demand, further exacerbated by hurricanes and adverse weather conditions.
Impact of Natural Disasters
This year alone, Florida has endured three powerful hurricanes within just two months: Debby in August, Helene in September, and Milton more recently, each leaving devastating impacts. "Florida's once-booming real estate market has cooled, stranding many homeowners," notes an article from the New York Post, referencing The Wall Street Journal. Across the state, home sales have slowed, with inventory soaring by more than 50% in major cities like Tampa, Orlando, and along the Space Coast, while demand has fallen by at least 10%, according to Parcl Labs.
Insurance Costs Add to Homeowner Woes
The New York Post also reports that over half of Tampa's homes on the market have experienced price cuts, marking it as one of the country's hardest-hit metro areas. In 2024, hurricanes have become a tipping point for many Florida homeowners already burdened by skyrocketing insurance premiums. Insurance costs in Florida have surged by up to 400% in recent years, largely due to frequent cyclones. Property owners in Florida face higher insurance premiums than almost anywhere else in the U.S.
According to a study by Insurify, in 2023, Florida homeowners paid an average of $10,996 for home insurance, a staggering 421% above the national average, as reported by EFE. Despite these challenges, Florida remains the third most populous state in the U.S. and was the second most popular destination for new residents in 2023, trailing only Texas, based on national census data.