Florida’s pandemic-era housing boom is finally starting to fade.
For-sale inventory in the state has reached the highest levels on record, and homes are staying on the market longer even as peak homebuying season kicks off. In many parts of the state, prices are starting to fall.
The turning market comes as migration to the Sunshine State slows, and a combination of hurricane fears, rising insurance and tax bills, and a steady supply of new construction has given buyers more leverage. While the state’s condo market has been in correction ever since new building laws took effect in the aftermath of the 2021 condo collapse in Surfside, Fla., the market for single-family homes is also starting to soften.
“Inventory and time on market has been dramatically increasing,” said Ben Grieco, a real estate agent in the southwestern city of Port Charlotte. “It’s not like buyers have left by any means, but there’s just so much to choose from that it’s really pushing prices down.”
Listings across the state usurped pre-pandemic levels in January, according to Realtor.com. As of last month, there were more than 168,000 homes active on the market. Residences in Florida spent an average of 75 days on the market, up 13 days from a year earlier, according to Redfin.
As of January, single-family home prices were falling the fastest in a cluster of cities on the southern Gulf Coast. Prices in Punta Gorda are down nearly 8% since January 2024, according to Zillow data. Thirty miles south, in Cape Coral, home prices have dropped 5.6% year over year.
Prices in North Port and the high-end, golf-focused city of Naples have also fallen by more than 3% in the last year.
‘People are worried’
Memories of Hurricane Ian, which devastated a number of southwest Florida communities in 2022 and was the costliest storm in the state’s history, still loom large with today’s buyers and sellers, said Rick Harrison, a Fort Myers-based real estate agent. Buyers are asking detailed questions about homes’ flooding history, while sellers are motivated to complete transactions before the next hurricane season starts in June.
“Everybody at this point has been educated enough to know that hurricanes had a huge impact on our area,” Harrison said. “On both sides, people are worried.”
An aerial view of the damaged homes from Hurricane Ian seen in the vicinity of Fort Myers in September 2022. (Al Diaz/Miami Herald/Tribune News Service via Getty Images) ·Miami Herald via Getty Images
Yet even as prices fall, many buyers are struggling to afford what’s available for sale. The median listing price in the state is $435,000. It’s been drifting lower since mid-2022 but is still 32% higher than at the end of 2019. The prices, coupled with mortgage rates above 6%, have left many would-be buyers shut out of the market entirely, contributing to the inventory glut.
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But buyers who can afford it are finding themselves with plenty of leverage. In cooler markets, agents say that offers $20,000 below asking price will often be accepted, and sellers are willing to make any repairs that come up during inspection. Contingencies that were frequently waived during the boom years, like the buyer successfully selling their current home, are also back.
There are deals to be found in new construction too, after several years of aggressive development have left many builders sitting on unsold homes. Builders are often willing to buy down mortgage rates to below 5%, cover closing costs, and offer credits toward upgrades. Some are cutting prices on homes entirely, something they typically avoid doing because it hurts existing owners in their communities.
Buyer incentives abound
Harrison said he’s pointing many buyers toward new construction for the incentives, and the fact that the newest buildings are subject to stricter building codes to guard against hurricane damage.
Olivia Wadden and her husband had long dreamed of relocating from Iowa to Florida, where they both have family.
“I do not want to be in Iowa, looking at cornfields every day,” said Wadden, 27. “I want the warm weather and the beach, and there’s a lot more opportunity down here.”
After spending two years casually scoping out the market around Bradenton, about 50 miles south of Tampa, they jumped in earlier this year when they noticed prices beginning to fall.
Their below-list price offer of $289,000 on a three-bedroom new construction townhome was accepted, and they received a slew of other incentives, including a mortgage rate buy-down, a closing cost credit, and upgraded storm windows.
Learn more: Closing costs: How they work and how much you’ll pay
“Obviously, the market has been so crazy high, but lately it’s been dropping” Wadden said. “We just had our eyes open and were looking with a Realtor. We finally found the one that fit our family.”
Florida is still among the top relocation destinations nationwide, but the number of people moving each year has been trending down. The Sunshine State added a net 64,000 people from elsewhere in the country last year, down from more than 100,000 who moved in 2023 and over 300,000 in 2022, according to Census Bureau data.
In some cities, home prices are still rising. Statewide, homes are selling for about 1% more than they were a year ago, with metro areas including Miami, Tallahassee, and Gainesville seeing gains.
In the Tampa Bay area, real estate agent Sam Brown Perez says she’s noticed buyers picking up some power in recent months, but competition for well-priced homes, especially those closer to city centers, can still be stiff.
“The market is now correcting,” Brown Perez said. “We’re not seeing an overcorrection, but it’s starting to level out again.”
Claire Boston is a Senior Reporter for Yahoo Finance covering housing, mortgages, and home insurance.
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