Climate Change Is Causing The FL Real Estate Market To Tumble

I remember after the 2004 Hurricanes Jeanne and Francis how the FL real estate fell apart. A friend then said we could buy low, but we wouldn’t live long enough to see our investment flourish. Of course, she was wrong, and the FL real estate market not only rebounded but created nest eggs for a lot of middle class folks.

Then the Champlain Towers South condominium collapsed in Surfside, FL in 2021, killing 98 people and becoming one of the deadliest structural failures in US history. Florida significantly revised its building safety regulations a year later through the enactment of Senate Bill 4-D. The legislation established rigorous requirements for mandatory structural “Milestone” Inspections for aging coastal condominiums that are 25 years or older and three stories or more in height.

As if the resulting costs to bring buildings up to current building standards weren’t enough, then Hurricanes Ian (2022), Helene (2024), and Milton (2024) hit. People in Florida now experience increased risks from heat, precipitation, and floods due to climate change.

What’s the Connection between a Warming Climate and Hurricanes?

A warming climate means stronger winds, higher storm surges, and record rainfalls during hurricane season — which is also why hurricanes are becoming more destructive and costly.

NOAA explains that hurricanes start with the evaporation of warm seawater, which pumps water into the lower atmosphere. This humid air is then dragged aloft when converging winds collide and turn upwards. At higher altitudes, water vapor starts to condense into clouds and rain, releasing heat that warms the surrounding air, causing it to rise as well. As the air far above the sea rushes upward, even more warm moist air spirals in from along the surface to replace it.

The link between ocean surface temperatures and tropical storm intensity exists because warmer waters fuel more energetic and often deadly storms.

Colorado State University hurricane researchers are predicting an above-average Atlantic hurricane season in their initial 2025 forecast. CSU’s Tropical Cyclones, Radar, Atmospheric Modeling, and Software (TC-RAMS) Team within the Department of Atmospheric Science cites above-average subtropical eastern Atlantic Ocean and Caribbean Sea surface temperatures as a primary factor for their prediction of nine total hurricanes this year.

When waters in the eastern subtropical Atlantic are much warmer than normal in the spring, they explain, it tends to force a weaker subtropical high and associated weaker winds blowing across the tropical Atlantic. These conditions will likely lead to a continuation of above-average water temperatures across most of the tropical Atlantic for the peak of the 2025 hurricane season.

Hurricanes Compound the Cost of Owning FL Real Estate

While still recovering from Hurricane Ian, Lee County, FL experienced significant impacts from major Hurricanes Helene and Milton. The human cost was significant: millions of residents were displaced, faced severe property damage, and experienced the loss of irreplaceable belongings.

In March 2025, the county held a public input meeting regarding the 2024 Disasters Draft Action Plan required to distribute the $1 billion allocated to the county post-Hurricanes Helene and Milton. Awarded by the US Department of Housing and Urban Development, the Community Development Block Grant Disaster Recovery (CDGB-DR) Funds support long‐term recovery efforts in Lee County. Preliminary storm impact data indicated that public infrastructure restoration and single-family home rehabilitation were the largest remaining unmet needs in the community following the storms.

Florida’s homeowners were already dealing with steeply rising insurance premiums before Helene and Milton hit. In the years 2021-2024, Floridians experienced the greatest premium hikes in absolute dollars of any US state: $2118 annually. Insurance companies including Farmers and Progressive Corp. dropped home policies. Many homeowners had no choice but to use the state-backed insurer of last resort, Citizens Property Insurance Corp.

In 2025, for condo complexes that haven’t completed required work as delineated in their Milestone Surveys, the overwhelming losses have triggered surging reinsurance rates for many individuals and homeowner associations.

Climate change has created what many are calling a perfect storm: the costs of HOA insurance rate hikes, triggered by extreme weather events and compounded by special assessments to pay for the required Milestone work, have priced many condo owners out of the FL real estate market. While having a warm and sunny vacation home is great, what’s becoming known as a “climate cost burden” has changed the equation of what it means to own in Florida.

Ten new insurance companies have entered the state, but with the additional company options come average premiums with larger deductibles.

Meanwhile, climate change is complicating the insurance dilemma. A higher water table and more frequent, damaging storms can drive saltwater into sub-basements and rust rebar in the buildings’ concrete. That will force more Milestone concrete work, among other major construction projects.

With reports of Florida’s median home price dropping 3.1% in April from a year earlier, owners are stressed out. For the first quarter overall, single-family home sales dropped 1.9% year-over-year to 56,209 transactions, while condo-townhouse sales fell 9.2% to 20,704 transactions.

Inventory in Miami-Dade County, which includes one of the most expensive metro markets in Florida and the country, rose by over 43% in April compared to the same month a year earlier. A total of 2,133 homes went under contract in Miami-Dade in April, down by 19.1% compared to a year earlier. Those homes spent an average of 81 days on the market before being sold, up 15 days from the previous year. The region’s condo market is still being affected by new building safety legislation, increased HOA fees for owners, and threat of hurricane damage, prompting many homeowners to put their properties on the market despite a lack of buyers.

The New York Times describes this week how foreign buyers can no longer be counted on to prop up South Florida’s condo market. Many foreign investors are looking elsewhere “because of high interest rates, expensive prices, and, more recently, restrictive immigration policies.”

The Miami Association of Realtors reports that home sales to foreign buyers dropped to 10% of all transactions in the region from August 2023 to July 2024, the lowest level since 2015 and a stark drop from 50% in 2018.

Final Thoughts

What will happen if another devastating storm hits and the Federal Emergency Management Agency (FEMA) is so weakly funded that it can’t offer adequate assistance?

Funds are needed to address sea level rise, water management, and flooding — all of which are major threats. As Bloomberg reports, the Trump administration has proposed shutting down FEMA, saying states, cities, and individuals ought to be responsible for emergency preparedness.

FEMA has already cancelled nearly $300 million in BRIC community resilience grants to Florida, used for preventive projects like raising low-lying roads and building better storm sewers. The FL real estate market can’t take much more.