Photo-illustration by Newsweek/Getty/Florida’s Housing Market ‘Turning Down Fast’
By Giulia Carbonaro
Senior Reporter
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The Florida housing market is "turning down fast," according to real estate analyst Nick Gerli, as sellers are increasingly offering reluctant buyers dramatic price cuts to convince them to close a purchase.
Gerli, founder and CEO of real estate platform Reventure, shared on X, formerly Twitter, late last month, a Zillow listing of a home in Saint Petersburg, Florida, which was bought by an investor in 2022—the peak of the COVID-19 pandemic homebuying frenzy—for a staggering $550,000 and sold again in late March for a much more reasonable $391,000.
"Twenty-eight percent loss in three years," Gerli wrote in his post.
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Why It Matters
The Sunshine State's housing market exploded during the pandemic, when the rise of remote work enabled many out-of-state movers to relocate to more affordable parts of the country offering a better quality of life than the country's busiest metropolises.
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The newcomers rapidly increased demand as well as prices across Florida, investors flocked to the state chasing what at the time seemed like sure-fire opportunities, and builders received authorization for building thousands of new homes to keep up with buyers.
But Florida's once red-hot housing market started showing signs of a significant cooldown over the past year, as domestic migration shrank compared to the pandemic boom, housing costs rose sharply and the threat of more frequent, more severe natural disasters and higher home insurance premiums swayed some buyers away from the state.
The result is that prices have started to drop across much of the state, as historically high mortgage rates are still putting a significant damper on demand, despite growing inventory giving buyers more options. The median sale price of a home in Florida in April, according to Redfin, was $409,900, down 3.2 percent from a year earlier. Home sales were down 8.8 percent from April 2024, at 33,667.
"The Florida housing market was thrown off balance during the pandemic, as inventory levels fell far short of the surge in housing demand from incoming buyers. Today, for-sale inventory has surpassed pre-pandemic levels, driven by a wave of completed new construction and existing homes hitting the market, but buyer demand has cooled," Hannah Jones, senior economic research analyst at Realtor.com, told Newsweek.
What To Know
Gerli pointed at a home listing in Saint Petersburg as a glaring example of the dynamics unfolding in the state. The property, a three-bedroom home built in 1960 and sitting on 1,703 square feet of land, is estimated by Zillow to be worth about $386,800, having risen in value by 157 percent in the past 10 years.
According to the property's price history, the home was sold in July 1999 for $93,000 and then again in December 2021 for $255,000. At the peak of the pandemic homebuying frenzy, in March 2022, it was listed for sale for $499,900, but the listing was later removed.
The property was listed and sold again in April 2022 for an even higher price tag—$550,000—to a Blackstone-owned entity, according to Gerli. The new owner then listed it for sale again in February 2024 for a lower price, $529,000 and then offered four different price cuts in the following months.
The listing was removed and reposted several times, until the home was sold on March 21, 2025 for $391,000—a drop of nearly $160,000 from the amount it fetched in 2022.
"The house sat on the market for a year, and they incrementally lowered the price until finally it sold," Gerli said. According to the analyst, there was no clear issue with the property. "This does not appear to be a hurricane-damaged property, as they had already cut the price down to $431K (22-percent loss from purchase) before the hurricanes hit," he wrote on X.
"After the hurricane hit, the price went down another $40K (7 percent)."
For Gerli, the fate of this home in Saint Petersburg shows what can happen when investors get involved in a market, contributing to its overheating and then its downturn.
"Investors had a huge impact in driving the Florida real estate bubble during the pandemic boom years of 2020 and 2021," he told Newsweek.
Gerli added: "In markets like Jacksonville and Orlando, investor purchases nearly doubled from the pre-pandemic norm. Since then, they have collapsed by 50-60 percent from peak, leaving a gaping hole in the market. Many investors are now also electing to sell, particularly big Wall Street Investors, because the economics of owning real estate in Florida no longer make sense due to stagnating rents and skyrocketing insurance costs."
On X, he wrote: "Imagine being a neighbor on this street, and getting excited about how much the value of your neighborhood was increasing. Only to now look at the new sales comp, and realize that the marginal buyer is now paying 28 percent less than three years ago. This is what investors do. Make the boom bigger on the way up, but the crash bigger on the way down."
According to Gerli, investors are backing out of Florida for three main reasons—including high interest rates, rising housing costs and falling rents.
"Higher interest rates significantly increased the cost of capital for investors, who almost always use debt to finance their acquisitions. Higher debt costs mean it's difficult to earn cash flow, making owning real estate a less attractive option," he said.
"Second are the costs of holding real estate in Florida. Both property tax and insurance rates have skyrocketed in Florida over the last three years, further hurting investor margins and lowering the incentive to buy," he added.
Gerli continued: "Third is the rental market. Rents in many areas of Florida are now dropping on a year-over-year basis, which makes the whole thesis of owning cash-flow driven real estate hard to justify, especially in market that is in a bubble like Florida. Many investors see this as their last chance to sell out before the prices and rents drop further."
But according to Jones, what is happening in Florida has little to do with investors. "In the pandemic-era frenzy, investors comprised less than 15 percent of all purchases in the largest Florida metros," she said.
"Though the investor share in some Florida markets was higher than the national share, housing demand from buyers flocking to relatively affordable Florida locales likely had as much, or more, of an impact on home prices and competition."
What Happens Next
According to Gerli and most housing experts who talked with Newsweek, what is happening in Florida is the natural correction that you would expect to follow years of overheating. Many locals in the Sunshine State have been priced out of the market in recent years, and without investors buying up properties, demand has naturally come down.
Investors backing off the market could exacerbate these dynamics, accelerating downward pressure on prices and forcing other sellers to slash prices to sell their homes.
"Investors rushing to the exits is already destabilizing the market in Florida and making the downturn worse," Gerli told Newsweek. "In some neighborhoods around Tampa and St. Petersburg, there are examples of investors selling houses at 20-25 percent losses from their purchase price in 2022. These sales are now entering the comps and significantly lowering the values of homes in the surrounding area."
Jones, however, thinks that less competition on the Florida market might spur more investment in the state. "In fact, investors may find opportunities for investment in the state as they face less competition from other buyers and negotiate with more flexible sellers," she said.
Overall, whether prices will continue falling in the Sunshine State—and by how much—will depend "on the larger economic context and mortgage rates, which both impact buyer demand," Jones said.
"Currently, many buyers are on the sidelines because still-high prices and mortgage rates have priced them out of the market. Affordability could improve via some combination of lower home prices and lower mortgage rates," she added.
Until buyer demand improves, however, "it is likely that sellers in Florida will continue to reduce asking prices, hoping to spur some buyer attention," Jones said.
Update 6/3/25, 7:46 a.m. ET: This article was updated with comment from Hannah Jones.
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