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Florida Real Estate Wire - Real Estate News > Broward County Florida > Florida’s Housing Market Cools: Inventory Surges, Prices Decline

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Florida’s Housing Market Cools: Inventory Surges, Prices Decline

Empty houses, declining real estate, Florida.

Florida’s once-booming housing market is experiencing a significant cool-down, with inventory levels surging and prices declining in many areas. This shift marks a departure from the rapid appreciation seen in recent years, driven by factors such as affordability challenges, rising insurance costs, and a decrease in buyer demand.

Florida’s Housing Market Takes a Breather

Florida’s housing market, a national leader in price growth post-pandemic, is now seeing a notable reversal. A recent analysis by Realtor.com reveals that Florida dominates the list of markets with the most price reductions, with seven of the top ten cities nationwide located in the Sunshine State. This indicates a significant shift from a seller’s to a buyer’s market.

Key Takeaways

  • Price Reductions: Cities like North Port (30%), Tampa (29.3%), Cape Coral (28.2%), and Jacksonville (27.6%) are experiencing substantial price cuts on listed homes.
  • Surging Inventory: Active listings across Florida increased by 32% year-over-year in May, reaching 181,822 listings. Major metropolitan areas like Tampa, Orlando, Cape Coral-Fort Myers, North Port-Sarasota, Jacksonville, and Lakeland-Winter Haven have seen inventory levels rise significantly, in some cases by over 40% compared to 2019.
  • Demand Destruction: The primary reason for the inventory pile-up is a sharp decline in sales, attributed to prices that became unsustainable during the pandemic-era boom.

Markets at High Risk of Price Decline

According to Cotality (formerly CoreLogic) data from April 2025, several Florida markets are at a "very high risk" of experiencing major price declines. These areas, which saw explosive growth, are now facing significant headwinds.

  • Top 5 High-Risk Markets:
    1. Cape Coral, FL
    2. Lakeland, FL
    3. North Port, FL
    4. St. Petersburg, FL
    5. West Palm Beach, FL

Cape Coral, for instance, has already seen a year-over-year price decline of 6.5% in April 2025, with prices returning to early 2022 levels. Other areas like Winter Haven and Tampa are also flagged for potential significant corrections.

Factors Contributing to the Downturn

Several factors are contributing to Florida’s cooling housing market:

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  • Affordability Crisis: Despite recent dips, home prices remain significantly higher than pre-pandemic levels, making homeownership unattainable for many, especially with elevated mortgage rates.
  • Skyrocketing Insurance Costs: Florida’s average annual home insurance premiums are approximately $11,000, nearly four times the national average, adding a substantial burden to homeowners.
  • Increased Inventory: The market is seeing a surge in available homes, giving buyers more options and reducing the urgency that drove bidding wars.
  • Cooling Migration and Investor Pullback: The frantic pace of new residents moving to Florida has slowed, and higher interest rates are making real estate investments less attractive, leading to a reduction in demand from these key buyer segments.

Implications for Buyers and Sellers

For prospective buyers, the current market presents potential opportunities, but caution is advised. Due diligence, including understanding HOA fees, property taxes, and insurance costs, is crucial. For sellers, realistic pricing based on current market conditions is essential, as the days of rapid sales and multiple offers are largely over. The market correction, while challenging for some, is seen by many as a necessary adjustment to bring prices back in line with economic fundamentals.

Sources

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