After a massive boom, various signals are indicating that Florida’s real estate market is entering a downturn. Data from the real estate information site Redfin shows that the median home sale price in the Sunshine State has declined 3.2% to $409,900, and total home sales tumbled 8.8% from last year to 33,667. While these figures do not necessarily indicate a bust in the market, some real estate experts paint a starker picture. Nick Gerli, CEO of the real estate analytics firm Reventure, posted about a listing in Punta Gorda, Florida last fall that took a “big boy price cut” of 42%, originally listing for $525,000 and instead going for $295,000 at the time of his post.
Florida experienced a massive boost to real estate demand in the post-pandemic years, with the more well-known pull-factors to Florida certainly playing a role. People coming from expensive cities like New York or Chicago could easily see the appeal of lower living expenses, the lack of state income tax, and fair weather all year round. Other factors specific to the moment, like a lack of COVID restrictions, as well as policies implemented by certain cities to attract investment–like Miami did with cryptocurrencies–also contributed. The result is that an estimated 1.8 million people moved to Florida between 2020 and 2024, according to the Census Bureau, making it one of the fastest growing states in the country.
The home construction industry, already accustomed to meeting influxes from snowbirds and the like, kicked into high gear, increasing the state’s housing stock by 8%, to the tune of 760,000 new homes between 2020 and 2024, according to Census data. The response to the initial demand, however, overshot expectations of continued interest from new buyers, leading to an excess supply as demand began to wane. Other factors include expensive home insurance, as well as the recent back-to-back hurricanes that ravaged the southwestern coast of the state.
Florida’s reputation for cheaper living costs was also vanishing, and reporting from Business Insider’s James Rodriguez shows that rising prices of everyday goods are, at least anecdotally, pushing Floridians to sell and put down roots in states that still have lower living costs like Pennsylvania. Stubbornly high mortgage rates have not helped either. The same factors, minus the home insurance and natural disasters, led to similar conditions in cities like Austin. That market eventually hit a downturn, and a number of cities in Florida are reaching it as well for the same reasons. “A bunch of people moved in, home prices shot up, and builders responded by putting tons of shovels in the ground. Then interest rates jumped, home loans got more expensive, and buyer demand hit the skids,” writes Rodriguez in summing up the situation. “Cue the price cuts.”
The market in Florida may be correcting from oversupply and other conditions, but there’s another side to the coin. As many buyers in large cities like New York continue to find themselves hopelessly priced out, there is a silver lining to be seen for a place where the market is softening. Some listings during this buying and construction frenzy effectively doubled in price over just a few years, a situation that was never going to be sustainable. High mortgage rates are still a factor as well, according to Gerli. “The cost to buy a house in America is now approaching $2,700/month when including mortgage, tax, insurance, and maintenance. Meanwhile, cost to rent is $1,850,” he posted on X last month. “Biggest gap we’ve ever seen. Something has to break.”
