From boom to correction: 5 reasons Florida’s housing market has weakened

Want more housing market stories from Lance Lambert’s ResiClub in your inbox? Subscribe to the ResiClub newsletter.

On a nationally aggregated basis, U.S. single-family home prices, as measured by the Zillow Home Value Index, are up 2.8% year-over-year, while U.S. condo prices have risen 0.4% over the same period. In much of the Midwest, Northeast, and Southern California, regional home prices have seen even stronger gains.

However, some areas—particularly around the Gulf—are experiencing greater softness, with a few even undergoing home price corrections.

Look no further than Florida. Among the 26 major Florida condo markets that ResiClub tracks, condo prices are falling on a year-over-year basis in 24 metro area markets. In other words, condo prices are falling in 92% of Florida’s markets.

The biggest year-over-year condo price declines are in these Florida markets:

1. Punta Gorda, FL: -11.4% 
2. North Port, FL: -8.9% 
3. The Villages, FL: -8.4% 
4. Panama City, FL: -8.4% 
5. Cape Coral, FL: -8.2% 
6. Tampa, FL: -7.9% 
7. Sebastian, FL: -7.7% 
8. Port St. Lucie, FL: -7.3% 
9. Naples, FL: -7.2% 
10. Deltona, FL: -6.6%

Condo prices are also down in Florida’s three largest metros: Miami (-3.4%); Tampa (-7.9%), and Orlando (-4.7%).

When it comes to home prices, Florida single-family prices are holding up better than condo prices, however, there’s weakness there too.

Among the 29 major Florida single-family markets that ResiClub tracks, single-family home prices are falling on a year-over-year basis in 19 metro area markets. In other words, single-family prices are falling in 66% of Florida’s housing markets.

The biggest year-over-year single-family home price declines are in these Florida markets:

1. Punta Gorda, FL: -7.3%
2. Cape Coral, FL: -5.3% 
3. North Port, FL: -5.0% 
4. Naples, FL: -2.7% 
5. Palm Bay, FL: -1.6% 
6. Sebastian, FL: -1.5% 
7. Key West, FL: -1.5% 
8. Panama City, FL: -1.4
9. Crestview, FL: -1.4% 
10. Deltona, FL: -1.3%

And here's how home prices have fared in Florida’s three largest metros: Miami (+3.2%); Tampa (-1.2%), and Orlando (+0.4%).

Florida's particularly intense overheating during the pandemic housing boom is the key reason for its pricing vulnerability. While U.S. home prices rose +41% between March 2020 and June 2022, Florida home prices surged +51% over the same period. It just takes a big enough shift in the supply-demand equilibrium for that vulnerability to manifest into falling prices.

Why has the supply-demand equilibrium shifted in Florida markets? It’s a combination of five factors, and some vary across Florida.

1. The pandemic housing boom’s migration surge to Florida has fizzled out. Indeed, Florida saw net domestic migration of about 64,000 people in 2024, compared to about 314,000 in 2022. Without that higher influx of deep pocketed buyers from up North, Florida home prices have had to rely more on local incomes.
2. Surfside condo fallout. Following the Surfside condo collapse in June 2021, which killed 98 people, Florida passed new structural safety rules, requiring more inspections and additional funds for repairs to be set aside by the end of 2024. That has led to Florida HOAs issuing sky-high special assessments and monthly HOA fee increases to cover these costs. This has had a greater impact on older coastal Florida condo buildings.
3. Hurricane Ian spurred a greater SWFL softening. Markets like Cape Coral and Punta Gorda, which were hard-hit by Hurricane Ian in September 2022, saw thousands of damaged homes, and the subsequent need for renovations. According to the National Oceanic and Atmospheric Administration, Hurricane Ian caused an estimated $112.9 billion worth of total damage, making Ian the third-costliest U.S. hurricane on record. This combination of increased housing supply for sale (i.e., the damaged homes), coupled with strained demand—the result of spiked home prices, spiked mortgage rates, higher insurance premiums, and higher HOAs—has translated into market softening across much of Southwest Florida.
4. Supply elasticity. Unlike many housing markets in the Northeast and Midwest, Florida has a higher level of homebuilding and multifamily construction. As new supply enters the market in this affordability-strained environment, builders are using bigger affordability adjustments—such as mortgage rate buydowns—where needed. This has helped cool the resale market by drawing in some buyers who might have otherwise purchased existing homes. As a result, inventory of existing homes is building up, making Florida one of the few housing markets where active listings now exceed pre-pandemic 2019 levels.
5. Home insurance shocks. Over the past three years, the median annual U.S. home insurance premium has jumped 33%, but Florida homeowners have been hit even harder. (You can find ResiClub's latest county-level home insurance report here.) The surge in Florida home insurance rates is partly driven by rising replacement costs—home prices and construction costs soared during the boom—and partly by increased hurricane risks and insurance payouts. Florida's sharp rise in insurance costs, combined with one of the biggest home price increases during the Pandemic Housing Boom, has led to one of the biggest housing affordability deteriorations.

View the full article