According to Linda Fleischer of Coldwell Banker Realty, insurance costs—not property values—now determine whether waterfront deals close in Tampa Bay
The Tampa Bay residential market is undergoing a significant reset, driven not by property values or desirability, but by the rising monthly cost of flood insurance. Linda Fleischer, a licensed real estate agent with Coldwell Banker Realty specializing in Palm Harbor and Pinellas County, says flood insurance requirements have become the primary factor influencing buyers’ decisions for waterfront properties.
“Insurance costs have gone up quite a bit, and if a home is in a flood zone where the lender requires flood insurance, it often deters people from buying,” Fleischer says. “The first question, always out of their mouths, is how much is the flood insurance?”
Fleischer notes that this question now comes before any discussion of price, size, or condition when buyers consider waterfront homes.
Geographic Avoidance of Flood Zones
The surge in insurance costs has created clear geographic patterns in buying behavior. After hurricanes struck the Tampa Bay area in the fall of 2025, Fleischer observed that buyers began avoiding properties west of US Highway 19, a region with higher flood risk.
“Initially, anything in a flood zone, nobody wanted to even look at it,” Fleischer says. “For a while, a lot of people were very spooked by purchasing anything on the west side of US Highway 19.”
While Fleischer says this avoidance has eased somewhat as hurricane season ended without additional storms, the financial impact for sellers in flood zones remains severe. “Now, especially this year, with 2025 passing without any major storm activity, we’re starting to see those homes begin to move again,” she notes.
Longer Marketing Times for Flood Zone Homes
Beyond buyer hesitation, the most noticeable effect has been longer times on the market for homes requiring flood insurance. “It can take a little longer to sell a home that’s in a flood zone,” Fleischer says.
She explains that properties needing flood insurance stay listed longer than comparable homes outside flood zones, even when priced competitively. Fleischer recently closed a deal on a flood zone property but says it required additional time and buyer education compared to similar sales elsewhere.
The result is that the traditional premium for waterfront locations—a major driver of Florida real estate values—is being reduced by insurance costs. Homes that once commanded higher prices based on water access now struggle if the monthly insurance expense exceeds what buyers are willing or able to pay.
Mandatory Lender Requirements
Fleischer emphasizes that flood insurance is not optional for most buyers. “A lender requires it in many cases,” she says, referring to flood insurance mandates for properties in designated flood zones. This requirement makes flood insurance a mandatory part of financing, not a discretionary purchase.
For the majority of buyers who use mortgage financing, flood insurance costs factor directly into debt-to-income ratios and monthly budgets. Fleischer says many buyers, after reviewing these numbers, determine that waterfront homes are unaffordable regardless of asking price.
This trend is shifting the basic equation of waterfront real estate throughout Florida. As insurance costs become the primary reason deals fall through, the longstanding link between desirable locations and higher property values is weakening in coastal communities.
Market Adaptation and Ongoing Challenges
Fleischer observes that the market is slowly adapting to elevated insurance costs. Buyer attitudes have shifted from outright rejection of flood zone properties to a more cautious, numbers-driven approach, with flood insurance now seen as a predictable part of the buying process.
Despite this adjustment, the underlying financial challenge remains. Sellers in flood zones still face longer listing periods and may need to accept lower sale prices to offset buyers’ insurance burdens. Whether this is a temporary adjustment or a lasting change depends on whether insurance costs stabilize or continue to rise in Florida’s coastal markets.
For now, the Tampa Bay waterfront market remains divided: homes outside flood zones sell more quickly and with fewer complications, while those requiring flood insurance face delays and price resistance. As insurance costs continue to dictate buyer behavior, the traditional rules of waterfront real estate are being rewritten throughout the region.
