Flood zone designation now acts as a deal-breaker rather than a negotiation point, creating clear geographic divides in Florida’s coastal markets.

Recent hurricane damage in Florida has changed the way buyers approach property purchases, according to Reeny Kaney, a top 3% producing realtor with RE/MAX Alliance Group in Sarasota. Kaney says location risk now weighs as heavily as price or condition in buyer decision-making, especially after a series of destructive storms.

Buyers have become more focused on property risk than on negotiating price, Kaney says. “They’re very conscientious of where they’re buying properties,” she explains, describing a noticeable change in market behavior. Instead of seeking modest price reductions for homes in risky locations, buyers are now avoiding high-risk flood zones altogether, regardless of how much the price is discounted. “In an area where they see that it is a high-risk flood zone,” Kaney says, buyers are simply walking away rather than adjusting their expectations.

Flood Zone Status: From Negotiation Point to Deal-Breaker

Flood zone designation has shifted from being a point of negotiation to a clear-cut deciding factor for many buyers. Kaney notes that visible hurricane damage and the ongoing risk of future flooding have elevated flood risk to a primary concern. “The fact that some people had their homes destroyed and the risk of flooding in the future,” she says, is driving this new level of caution.

This shift means that properties in high-risk flood zones now face a fundamentally different market environment. Instead of merely accepting a lower price, these homes attract fewer buyers and spend longer on the market. Kaney explains that when asked whether buyers are willing to pay more for homes outside high-risk zones, “the market is leveled out” based on “supply and demand and location.” In other words, the pool of buyers for risky properties has shrunk, while safer locations see steadier demand and activity.

Geographic Segmentation Within the Same Market

Kaney reports that this risk-driven approach is splitting coastal markets into distinct segments. Properties that once competed primarily on size, amenities, or condition now experience dramatically different levels of demand based solely on flood risk. The result is not just a price gap, but a separation into different markets within the same geographic area.

This segmentation is not simply about high-risk properties trading at a discount. Instead, some homes are being bypassed entirely, regardless of price adjustments. “Supply and demand and location, yes,” Kaney says, are the dominant forces now, with location – specifically flood risk – acting as a filter that many buyers use before even considering other factors.

Hurricane Impact on Sales Volume

Kaney identifies hurricane effects as one of three main factors driving down sales in Sarasota, alongside higher interest rates and a decline in Canadian buyers. Unlike the other two, which affect affordability or buyer demographics, hurricane damage changes the fundamental appeal of certain properties. “Some people had their homes destroyed,” Kaney notes, and this visible evidence of risk has a lasting impact on buyer psychology.

Buyers are not just reacting to past damage, Kaney says, but are now factoring in the likelihood of future flooding. This means they are using both historical evidence and forward-looking risk assessment in their decisions, making them “very conscientious” about location.

Market Leveling and Pricing Adjustments

When asked if safer locations are seeing price premiums, Kaney describes the market as “leveled out.” She suggests that prices have already adjusted to reflect buyers’ increased focus on risk, so homes in preferred zones do not necessarily command outsized premiums. Instead, “supply and demand and location” are producing relatively efficient pricing.

This apparent leveling, however, may mask deeper issues. If high-risk properties attract little interest, the resulting drop in transaction volume could make the market appear stable, even as liquidity dries up in certain segments. Fewer sales in high-risk zones may create the illusion of price stability while actually signaling a lack of active buyers.

Development and Future Buyer Patterns

Kaney’s observations raise important questions for future development along Florida’s coast. If buyers consistently avoid high-risk flood zones, new construction may shift to safer areas, and existing inventory in vulnerable locations could struggle to sell.

Kaney emphasizes that maintaining steady sales is now the primary challenge, rather than chasing price appreciation. “Just continued sales. Really, just continued sales,” she says, highlighting transaction volume as the main indicator of market health. She also stresses the need for properties to be “show-ready with no surprises for any buyers,” reflecting heightened buyer sensitivity to any issues that could amplify concerns about location or risk.

Looking Ahead

Kaney does not foresee additional challenges beyond hurricanes, interest rates, and declining Canadian buyer activity. “I don’t think there are any other challenges,” she says. “I think it’s just consistency” in managing these factors.

However, the shift from price-driven negotiation to risk-based screening may have lasting effects on Florida’s coastal markets. If flood zone status continues to act as a deal-breaker, as Kaney observes, the divide between high- and low-risk areas could persist, regardless of broader economic trends. This could lead to ongoing differences in property values, sales velocity, and long-term development patterns.

Whether other Florida coastal markets are seeing the same changes depends on their recent storm history, insurance landscape, and buyer mix. But Kaney’s experience in Sarasota suggests that hurricane impacts are not just causing temporary slowdowns. Instead, they may be permanently changing how buyers assess and value risk in coastal real estate, with flood zone status becoming a central criterion in property selection.

As buyers become more informed and cautious, the traditional approach of adjusting price to account for risk is giving way to a new reality: in many cases, location risk now determines whether a property is considered at all. This shift is redefining coastal real estate markets in Florida, and it may continue to shape buying patterns and development decisions well beyond the current cycle of storms and market fluctuations.