Florida Housing Market Update: 5 Cities Where Home Prices Are Dropping and Opportunities Are Rising

Florida Housing Market Shifts: Prices Drop Amidst High Interest Rates

As the Federal Open Market Committee signals that interest rates—and consequently mortgage rates—are likely to remain elevated for the foreseeable future, a surprising trend is emerging in Florida’s housing market: home prices are beginning to fall. This shift comes as pandemic-related supply chain issues and soaring construction costs stabilize, leading to an influx of new homes in the Sunshine State.

According to a recent report from Redfin, the once-booming homebuying frenzy in Florida has slowed significantly. Many potential buyers, who previously flocked to the state for its perceived value, are now looking elsewhere, with North Carolina and Tennessee becoming increasingly attractive alternatives. "Out-of-town homebuyers no longer see Florida as a place to get amazing value," noted Eric Auciello, a local Redfin sales manager. "Now they’re moving to North Carolina or Tennessee to get a good deal."

The current market dynamics are forcing sellers to reevaluate their pricing strategies. Auciello advises, "My advice to sellers is to price your home fairly; the comps from six months ago don’t exist now. And if you’re a buyer, know that the odds of getting an offer accepted below market value are pretty high."

In North Port-Sarasota, a staggering 48% of real estate listings have seen price cuts, the highest rate in the nation. The area has experienced a 51% year-over-year increase in home inventory, contributing to a 4.6% drop in median sale prices since March 2023. This smaller town, with a population of approximately 85,000, is becoming increasingly appealing due to its affordability and rapid growth, having been named the second-fastest-growing city in the U.S. by Quicken Loans.

Tampa, another West Coast gem, is also witnessing a significant shift. Reports indicate that 44% of home listings have experienced price drops, alongside a 29% increase in inventory year-over-year. With its proximity to stunning beaches and vibrant nightlife, Tampa is becoming an even more desirable destination for homebuyers.

Cape Coral, located on Florida’s southwest coast, is experiencing a similar trend, with 41% of homes listed showing price cuts in March. The city has seen a remarkable 51% surge in available homes compared to the previous year, making it an attractive option for those seeking a blend of urban amenities and a small-town atmosphere.

Orlando, known for its tourist attractions like Walt Disney World and Universal Studios, is also seeing a decline in home prices, with 35% of listings reflecting reduced prices and a 23% increase in inventory. This drop comes alongside record job growth in the area, further enhancing its appeal.

Lastly, Jacksonville, situated near the Georgia border, has reported a significant 33% decrease in home prices. The city is also experiencing job growth, with the labor force expanding by 1.5% and the private sector adding 11,300 jobs.

As Florida’s housing market continues to evolve, potential homebuyers may find themselves in a favorable position to secure a deal in these once-overheated markets. With prices dropping and inventory rising, the Sunshine State may still hold opportunities for those looking to make a move.