Florida Housing Market Cooling Amid Home Price Declines

While home prices are rising nationwide, an intriguing trend is emerging in various Florida metropolitan areas where buying a home is becoming more affordable. As inventory increases and demand wanes, several local markets in the Sunshine State are seeing price drops, according to the latest data.

Key Findings from the National Association of Realtors

• Nationwide Trends: In the first quarter of 2025, 83% of U.S. metro areas experienced price increases.
• Florida Exceptions: In stark contrast, 10 Florida metros reported home price declines, with one area showing no change at all.

Understanding the Shift in Florida’s Housing Market

During the pandemic, Florida’s housing market became one of the hottest in the country, fueled by an influx of out-of-state buyers taking advantage of remote work. This surge in demand drove home values up significantly, prompting a wave of new construction projects.

However, the tide has turned:

• Slower In-Migration: As the post-pandemic era unfolds, the pace of relocation to Florida has slowed.
• High Mortgage Rates: Aspiring homebuyers are facing historically high mortgage rates, which have dampened demand significantly.

Impact of Unsold Inventory

Many Florida cities that once thrived are now dealing with an increasing amount of unsold inventory, contributing to the cooling of the housing market.

Significant Price Declines in Florida

Among the metros in Florida experiencing price drops, the following areas saw notable changes:

• Sebastian: Home prices decreased by 8.2%, with the median now at $400,000.
• Punta Gorda: Prices fell 6.8%, reaching a median of $353,800.
• Cape Coral: A decrease of 3.6% brought prices to $400,000.
• North Port-Sarasota-Bradenton: Prices dropped 3.3%, now at $493,000.

Smaller declines were registered in:

• Lakeland-Winter Haven: Down 2.5% to $325,000.
• Deltona-Daytona Beach-Ormond Beach: Fell 2.2% to $352,000.
• Gainesville: A decrease of 1.4% brought prices to $349,400.

Ongoing Challenges for Homebuyers

Despite these price corrections, several challenges persist:

• High Property Insurance Rates: Florida continues to have the highest property insurance premiums in the country, with rates expected to rise further.
• Rising HOA Fees: Many homeowners, especially condo owners in South Florida, face escalating HOA fees, complicating affordability.

Expert Insights

Lawrence Yun, chief economist of the National Association of Realtors, commented:

“Most metro markets continue to set new record highs for home prices. Despite stronger job additions, the South is lagging with declining sales and virtually no price appreciation.”

He also noted that while some markets currently experiencing price declines could rebound, areas like Austin, San Antonio, and various Florida metros could see renewed price growth fueled by solid job growth.

Future Outlook for Florida’s Housing Market

Looking ahead, the situation remains complex:

• Mortgage Rates: Currently around 7%, they are likely to stay above 6% through 2025 and 2026.
• Affordability Concerns: Many potential homebuyers may still find it difficult to enter the market, even with price corrections in some areas.

While the landscape is changing, challenges like rising HOA fees and property insurance remain roadblocks for many aspiring homeowners in Florida.