Florida Boom Metros See Biggest Drop in Home Prices Since 2011

An area along Florida’s west coast including affluent Sarasota is seeing the worst home price declines since the aftermath of the Great Recession, as the region recovers from hurricanes and faces rising inventory.

While home prices continue to rise across most of the country, metro areas in once-hot Florida and the Southeast dominate the short list of places where they are actually falling from a year ago in data from 226 metro areas compiled by the National Association of Realtors.

No region is seeing greater declines than Southwest Florida, a fast-growing area historically popular with Midwestern retirees. The Punta Gorda metro area had the biggest quarterly decline since 2011, with the median price falling 6.5% over the year to $350,000 in the third quarter, NAR data show. Fifty miles north, prices in the North Port-Sarasota-Bradenton area fell 5.8% over the year to $485,000, also the biggest decline since 2011.

And in the nearby Cape Coral-Fort Myers area, prices fell 3.7%, although it saw a bigger drop earlier this year.

Prices in the Southeast are under pressure from “more inventory, higher insurance costs, and more homebuilding in recent years,” NAR Chief Economist Lawrence Yun said in an email Thursday.

Tony Barrett, president of the Realtor Association of Sarasota and Manatee, chalked up the recent weakness in part to the effects of recent hurricanes, which delayed some sales and hurt buyers’ confidence. Meantime, the supply of homes has been rising, and fewer investors appear to be buying, he said in a September market report. Finally, the region has been coping with a surge in home insurance costs that has scared off some buyers.

Southwest Florida has been ravaged by storms lately, coping with flooding from Hurricane Debby in August and hurricanes Helene and Milton this fall. The latter storm made landfall just outside Sarasota, taking lives and destroying homes across the state.

Other metros seeing year-over-year drops last quarter were San Antonio-New Braunfels, Texas, and Durham-Chapel Hill, North Carolina. Both areas saw huge annual gains of more than 20% two years ago, NAR data show. Like in many other places where prices are easing, housing remains much more expensive than before the Covid pandemic — and unaffordable for the average household.

In a turnabout, some Midwestern areas that had remained relative bargains in recent years are now seeing outsize gains in existing-home prices. The two US metro areas with the fastest pace of growth last quarter were Racine, Wisconsin, where home prices rose 13.7% from a year earlier, and the Youngstown-Warren-Boardman, Ohio area, where prices climbed 13.1%, NAR data show. The median home price in Racine was $310,200 in the third quarter, while in Youngstown it was just $171,100.

Nationwide, the median price for an existing single-family home continued to rise in the third quarter, up 3.1% from a year ago to $418,700. All told, 87% of US metropolitan areas saw prices rise in the quarter, even if the pace of gains has slowed from a 4.9% annual increase in the second quarter.

Top photo: Homes in Sarasota, Florida. (Photographer: Jeff Greenberg/Universal Images Group/Getty Images)