Florida Retirement: Navigating Rising Costs & Climate Risks

By Rod Khlief

For decades, Florida has been viewed as a retirement paradise, making it an ideal market for warm weather, tax-friendly incentives and active lifestyles. This sentiment has resulted in a boom of snowbirds and retirees, and it has ultimately led to an abundance of senior-friendly communities. In recent years, the real estate market has shifted and is presenting new challenges for retirees or those looking to relocate to the Sunshine State.

Individuals must be smart about where to retire. With rising insurance costs, climate risks and housing market shifts, retirees now more than ever need to be careful when weighing their options before settling down.

A Changing Market: Weighing the Risks and Rewards

During the pandemic, the property market in Florida experienced a remarkable boom. House prices increased 51% between March 2020 and June 2022—an impressive increase compared with the average price increase of 41% across the country. This created an affordability gap that is now affecting the market’s potential.

In 2024, Florida’s property market started to struggle due to higher mortgage rates, increasing property insurance costs, severe weather and slow job growth. As a result, more homes are going unsold, leading analysts to predict a buyer’s market in 2025. This shift may seem to benefit retirees by giving them more bargaining power and flexibility with prices, but it’s crucial to remember that lower home prices don’t automatically mean lower living costs.

For retirees on a fixed income, affordability is critical. For current homeowners, investments have appreciated. However, those entering the market now must contend with higher mortgage rates and home insurance premiums that are doubling, or tripling, in some markets.

The Impact of Climate Risks and Insurance Costs

Florida’s vulnerability to hurricanes, flooding and extreme heat makes climate resilience a top concern for real estate. In recent years, powerful storms like Hurricanes Helene, Milton and Debby have altered parts of the state. As a result, homeowners—especially those in coastal areas—are facing rising insurance premiums, with some policies costing over $6,000 per year.

The ongoing threat of severe weather is pushing insurance providers to pull out of the market, which is limiting resources for property owners and renters. For any retirees, this is a significant financial hurdle that can impact long-term affordability and should play into the overall decision-making process of where to live. While coastal areas may be more prone to hurricanes and flooding, inland areas can offer lower costs because of the reduced exposure to weather threats.

It is important to research whether or not the property is in a flood zone, the area’s history of storms and when the property was built. Single or multi-family properties built after 2002 are known to have stronger structures that can resist hurricanes, which can help lower insurance costs.

Finding the Right Community: Lifestyle and Practicality

Florida is a large state measuring approximately 450 miles long and 360 miles wide. Choosing the right region in Florida depends on a retiree’s personal preferences and financial comfort. The state’s vast geography offers distinct climates, cost structures and community cultures:

Northern Florida: Jacksonville, Pensacola

For those who prefer milder weather, northern Florida provides a more comfortable climate. The winters are cooler with average winter temperatures between 50-67 degrees Fahrenheit, making it an attractive option for retirees seeking to escape south Florida’s intense heat and humidity. Housing is generally more affordable in the area, and the lower hurricane risk helps keep insurance costs down. Locally, commercial real estate remains on the rise with rising populations and low unemployment resulting in strong local investments.

Central Florida: Orlando, Tampa

Central Florida offers a mix of suburban and city living. The region’s winter temperatures, ranging from 55-74 degrees, provide a more moderate climate than southern areas. This, combined with easy access to major attractions and entertainment centers, makes it an appealing option. However, cities like Tampa are at risk of hurricanes, so considering storm resilience when choosing a property is a must. Orlando continues to be an economic bellwether nationally, with a 5.9% GDP growth in 2022 (compared to 2.1% national average).

South Florida: Miami, Naples, West Palm Beach

South Florida is famous for its year-round warm climate and luxury amenities, but it comes with a higher cost of living. Winter temperatures usually stay above the mid-60s, which draws retirees who love the sun and want easy beach access. This region also faces some of the highest insurance costs in the state, alongside rising HOA fees in many communities. Economically, Miami-Dade was ninth nationally (first in Florida) in GDP growth caused by growth of existing businesses, building permitting and infrastructure investment.

Summer is hot no matter where you live in Florida, so if you prefer cooler climates, this may not be the right place to retire. Humidity is also a consideration—Miami has an average of 248 muggy days a year compared with 159 in Jacksonville. Weather can be a blessing and a challenge. So, picking the right place is key for a comfortable retirement that fits your personality and health priorities.

Renting Before Buying: A Practical Step for Retirees

More and more retirees are choosing to rent before buying a home. This approach lets them get a sense of different communities and see how they are at different times of the year. City brochures often paint a very different picture than what you experience in person, so renting gives you time to get a feel for the area before committing to a long-term investment.

Renting provides flexibility in evaluating:

Traffic patterns and accessibility to essential services.
Community atmosphere and neighborhood dynamics.
Property insurance and HOA fees, which can vary significantly across locations.

Some retirees are initially drawn to popular locations like West Palm Beach, only to discover other areas that offer a more relaxed environment with lower costs. By renting before committing, retirees can test the waters and ensure their chosen location meets their long-term goals.

Condo Living and HOA Considerations: Understanding the Fine Print

The condominium crisis is a major issue in Florida’s housing market. After the tragic Surfside condo collapse in 2021, Florida put in place stricter building inspection rules, which have led to unexpected financial burdens for condo owners. Many older buildings now need thorough structural checks, resulting in inspection costs that can run from tens of thousands to hundreds of thousands of dollars. On top of that, rising HOA (home owner association) fees and insurance premiums across the state are making condo living more costly than many retirees had expected.

Before purchasing a condo, retirees should:

Review the latest structural inspection reports to identify potential liabilities.
Examine HOA financial statements to ensure reserves are adequate.
Ask about pending assessments that could impact costs in the near future.

Navigating HOA Communities: Pros and Cons

Compared to other states, an overwhelming majority of retirement-friendly communities in Florida have HOAs that provide structure, security and amenities. However, these HOAs also come with different levels of restrictions and costs.

Advantages of HOA communities:

Well-maintained common areas and community facilities.
Security features such as gated access and private patrols.
A sense of neighborhood continuity and property valuation protection.

Challenges of HOA communities:

Monthly HOA fees can range from $300 to $600, with the potential for increases.
Rules and restrictions on home modifications, pet ownership and exterior aesthetics.
Limited flexibility for retirees who prefer less oversight and regulation.

For those seeking a more independent living arrangement, non-HOA communities provide greater autonomy but may lack the structured maintenance and amenities of their HOA counterparts.

Key Considerations for Retirees Moving to Florida

Retirees should approach Florida’s housing market with careful planning. Before purchasing a home, it is crucial to:

Rent before buying to explore different regions and cost variations.
Assess total homeownership expenses, including taxes, insurance and HOA fees.
Prioritize climate resistance, ensuring homes are equipped to handle extreme weather events.
Opt for newer construction where it is possible to benefit from improved building standards and lower maintenance costs.
Investigate condo financials thoroughly to avoid unexpected assessments or fee hikes.

Finding The Right Path for You

Florida will always remain a top U.S. retirement destination, but recent market and environmental forces are starting to make some retirees second guess where they snowbird in their golden years. Rising costs of insurance and climate-related risks are requiring retirees to do an extra layer of consideration beyond just the traditional haggling over the best closing price for a property.

Retirees need to take a more thoughtful approach to make sure their dream property meets their needs and provides financial peace of mind. It doesn’t matter if you’re looking at a coastal retreat, a city condo or a quiet suburban neighborhood, there are new rules of the road for Florida retirement. However, with proper planning and a deeper understanding of local market dynamics, the Sunshine State can still be home for retirees and investors looking for their next real estate investment.

About the author: Rod Khleif

Rod Khleif, is one of the country’s top real estate investors and trainers, and he has personally owned and managed over 2,000 properties. He is also the podcast host of Lifetime CashFlow through Real Estate Investing.