Alert about a sharp decline in housing prices and sales in Florida: Causes and immediate outlook

The real estate market in Florida is currently experiencing one of its most critical phases in recent years.

An alarming increase in the inventory of homes for sale, coupled with a decline in sales and pressure from economic and climatic factors, has raised concerns among experts, who warn of a potential new bubble in one of the most dynamic real estate markets in the United States.

According to recent data from the real estate portal Redfin, in January 2025, the number of homes for sale in Florida reached 179,000, reflecting a 23% increase compared to the previous year and the highest level since 2012.

This trend is even affecting traditionally strong markets like Miami, where only 307 properties were sold in February -including houses, apartments, and townhouses- representing a 7% decline compared to 2024.

"Since the 2010 bubble, inventories have not been at these levels," said real estate agent María La Rosa, specialized in Broward County, where sales plummeted by 46.9% in January, in comments reported by Telemundo 51.

Factors that fuel the "perfect storm"

The slowdown in the market is not due to a single cause.

On the contrary, it is a combination of factors that, together, have created what some experts call "the perfect storm."

Mortgage rates, which remain above 6.5% and which the Federal Reserve has no intention of reducing in the short term, are one of the main obstacles.

A high cost of homeowners' insurance has also emerged, which has doubled in the last two years.

According to the Insurance Information Institute, in 2024 the average annual premium exceeded $6,000 in Florida, compared to a national average of $1,700.

By 2025, an additional increase of 20% is already reported.

The increase in insurance is due, among other factors, to the impact of extreme weather events.

Western Florida has been hit by four hurricanes since 2022, the most devastating being Hurricane Ian, which caused damages of $112 billion, according to the National Oceanic and Atmospheric Administration (NOAA).

Post-Surfside regulations and fear among property owners

After the collapse of the Champlain Tower in Surfside in 2021, Florida approved stricter regulations for condominiums. Since then, buildings taller than three stories must undergo structural inspections at 30 years of age, or at 25 if they are near the coast.

Additionally, it is required that condominium associations maintain sufficient financial reserves to cover essential repairs, which has further increased maintenance costs.

These measures have led many owners, particularly of condominiums in South Florida, to try to sell their units before costs become unsustainable.

Tariffs and migration: Increased pressure on the market

The tightening of immigration policy and deportations are also influencing the dynamics of the market.

"Last year, it was observed that 13% of the houses for sale were owned by Canadians. The number, at least in the southern part of the state, has doubled," warned La Rosa.

Canadian buyers account for approximately 13% of the total foreign investment in real estate in the U.S., with Florida attracting 41% of those investments, according to the National Association of Realtors.

This includes the new tariffs imposed by the Trump administration, which affect construction materials from Canada and Mexico.

"Condominium associations are now concerned that these costs will rise as a result of the tariff war," warned agent Jackie Little.

Declining prices in several cities

The market saturation has triggered a wave of price reductions, particularly in the most overvalued cities in recent years.

In Naples, for example, of the 8,043 homes for sale, 2,731 have reduced their prices.

In Fort Lauderdale, 830 out of the 3,249 listed homes have also experienced price reductions, according to data from Zillow.

Bryan Carnaggio, real estate agent at Redfin Premier in Jacksonville, explained that “nowadays, bidding wars are very rare. With so many houses on the market, one must look magazine-worthy and have a fair price to attract multiple offers.”

Is there a real risk of collapse?

While the growth of prices appears to have moderated at the state level, and in some areas even decreased, not all experts believe that a collapse is imminent.

“A larger inventory in Florida is good news for buyers (...). At the same time, demand in Florida remains very strong, primarily driven by population growth, the formation of new households, and high migration to the state,” said Nadia Evangelou, senior economist at the National Association of Realtors, to Newsweek.

However, Evangelou also acknowledges that sellers will need to adjust their expectations.

The value of homes has increased significantly in recent years. For example, over the last decade in the Miami metropolitan area, the typical homeowner has gained approximately $420,000 in net housing value, with around $300,000 of that amount occurring in the last five years.

The immediate future

Although some analysts do not foresee a widespread collapse in prices, the downward trend in many cities is undeniable.

And with an increasing inventory, higher insurance costs, regulatory pressure, restrictive immigration policies, and the constant threat of hurricanes, Florida faces a real estate landscape that is much more volatile than in previous years.

For those looking to buy a home in the Sunshine State, this could be a good time to negotiate.

But for those looking to sell, the landscape demands realism, aggressive pricing strategies, and, above all, patience.

Frequently Asked Questions about the Real Estate Market Crash in Florida