The once-booming Florida housing market is finally weakening as inventory grows and demand dwindles amid stubbornly high mortgage rates and historically elevated home prices. Especially in those markets that became unbearably overvalued over the past few years, prices are now softening and even declining, giving buyers more options and negotiating power even as affordability remains a significant obstacle to homeownership. In an attempt to attract reluctant buyers, sellers are slashing prices in multiple Florida cities where unsold homes are piling up, Zillow data show.
Why It Matters
With mortgage rates still hovering around the 7 percent mark and
expected to remain between 6 and 7 percent for the next two years , an ongoing lack of supply and historically high home prices, the U.S. is in the midst of an affordability crisis. While
Donald Trump has promised to bring down the cost of housing through mass deportations and deregulations of the construction sector, experts fear that some of his policies, including imposing tariffs against Canada,
might actually exacerbate the current affordability crisis. States in the Sun Belt, including Florida, are likely to offer aspiring homebuyers
the best chances of getting on the property ladder this year. What to Know
Housing inventory reached a record high in the Sunshine State in January ,
a recent Redfin report found. The number of homes on the state's market, at 172,209, was 22.7 percent higher compared to a year earlier and it was the highest of any month in records dating back to 2012. Active listings—the number of houses that are currently for sale in the market, no matter how long they have been there—were higher year-over-year in every Florida metropolitan area analyzed by Redfin. In eight out of 31, active listings were at a record high, including in Cape Coral (15,425, up 24.8 percent year-over-year), Deltona-Daytona Beach (7,831, up 17.9 percent), Homosassa Springs (1,974, up 25.8 percent), Lakeland (7,500, up 19.7 percent), North Port-Sarasota (13,542, up 14.6 percent), Ocala (4.947, up 17.8 percent), Port St. Lucie (6,478, up 24.5 percent) and the Villages (1,029, up 26.6 percent). The five cities where inventory grew the most between January 2024 and January 2025 were Palatka (up 34.3 percent with 435 active listings), Wauchula (up 32.8 percent with 77), Naples (up 28.6 percent with 7,932), Fort Lauderdale (up 27.2 percent with 19,440), and The Villages. In all these cities a significant share of sellers have lowered their originally asked price, hoping to encourage buyers. According to Zillow data, there were 288 homes for sale in the Palatka market as of Tuesday morning, 74 of which had a price reduction. In Wauchula, there were 61, of which six had their price slashed by sellers. In Naples, there were 8,043 homes listed for sale, 2,731 of which had a price reduction. In Fort Lauderdale, 3,249 were listed for sale, 830 of which had their originally listed price cut by sellers. In The Villages, 290 homes listed for sale had price cuts, out of a total of 708.
Why Is The Florida Market Cooling Down?
A softening of the Florida housing market throughout 2025, predicted by a majority of housing experts, is the result of a series of dynamics set in motion since the start of the pandemic. The rise of remote work during the health emergency allowed an influx of newcomers to relocate to Florida, bringing up demand for homes and encouraging builders to increase production. But migration to the state has slowed down significantly after the end of the health emergency, and some Floridians are now leaving the state because of the growing risk of natural disasters and rising homeowner insurance premiums and housing costs. While demand slips, a flood of new and existing homes is landing on the market, where it ends up lingering for weeks on end before going under contract. In South Florida, inventory is also growing because an increasing number of condo owners are trying to off-load their properties, fearing rising fees
as a result of new safety-building regulations introduced by Tallahassee lawmakers in the wake of the Surfside tragedy of 2021. What People Are Saying
Bryan Carnaggio, a Redfin Premier real estate agent in Jacksonville, said in a statement: "Bidding wars are very rare these days. With this many houses for sale, a home basically needs to look like it's out of a magazine—and be priced fairly—to get multiple offers."
What's Next
Inventory is still climbing across Florida, but according to real estate analyst Mike Simonsen it has "kind of plateaued" now after years of climbing. A majority of experts expect price growth to soften at the state level in Florida throughout 2025 while declining in some markets, without leading to a crash.
