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By Giulia Carbonaro
Senior Reporter
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The Sunshine State is experiencing some of the steepest price drops in the country as inventory surges while buyers are kept to the sidelines by historically high mortgage rates, rising homeowners association (HOA) fees and growing home insurance premiums.
The median sale price of a typical Florida single-family home was $415,000 in May, down 2.7 percent from a year earlier, the latest data released by Florida Realtors showed. Prices were still rising in the rest of the country, even if at a much slower pace than in previous years.
But even across Florida, not every market is behaving in the same way. Some are seeing much steeper drops than others, while some cities—like Miami—are actually continuing to report price increases even as the state experiences a general downturn.
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Where Home Prices Are Falling the Most
Looking at the single-family market, the Naples metropolitan statistical area (MSA)—which includes Immokalee and Marco Island—reported the biggest plunge in median sale prices between May 2024 and May 2025, according to Florida Realtors.
A home in Naples cost $767,800 in May, down 19.2 percent from a year earlier—despite being a lot higher than the statewide median. It was followed by Punta Gorda ($325,000, -14.5 percent), The Villages ($347,000, -11.3 percent), Sebastian-Vero Beach ($386,190, -10.2 percent), North Port-Sarasota-Bradenton ($475,000, -9.9 percent) and Cape Coral-Fort Myers ($375,000, -9.6 percent).
"There is a clear divergence from last year's price levels starting to emerge," Florida Realtors Chief Economist Dr. Brad O'Connor said. "Still, prices remain in the neighborhood of where they've been since early 2022 and are 54 percent above where they were at this time in 2020."
In nine out of 22 MSAs analyzed by Florida Realtors, prices were rising or unchanged between May 2024 and May 2025. The highest year-over-year price increase was reported by Gainesville (+6.6 percent to $376,000), Sebring (+3.6 percent to $285,000) and Ocala (+1.8 percent to $295,000).
Why Home Prices Are Falling in These Cities
Prices are falling the most in Florida markets that became particularly overheated during the pandemic homebuying frenzy and are now seeing a significant surge in inventory. At the state level, inventory is now above pre-pandemic level, with 225,020 active listings in June, according to the latest Redfin data.
This inventory growth has been driven in part by Florida's construction boom over the past few years—spurred by the boom the state was experiencing during the pandemic—and in part by the fact that fewer homes are selling due to long-standing affordability issues. In June, according to Redfin, 31,847 homes were sold in Florida, down 4.1 percent from a year earlier, and 31.6 percent of listings had price drops, up 0.3 percent year-over-year.
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Essentially, there are more homes on the Florida market than there are willing buyers—and this is putting pressure on prices to come down.
"Florida's single-family home market is adjusting to a new normal. Elevated mortgage rates have made some buyers more cautious, and the surge of domestic in-migration we saw during the pandemic is leveling off," Tim Weisheyer, 2025 Florida Realtors President and broker-owner of Dream Builders Realty and dbrCommercial Real Estate Services, told Newsweek.
"Back in 2021, homes were flying off the market in under 10 days, often closing before the end of the month and never even showing up in monthly inventory reports. Today, many are taking 40 days or more to go under contract, which means they're being counted in one or even two months of inventory data," he said. "So, while it may look like inventory is rising sharply, it's more about slower turnover than a flood of new listings."
This change, Weisheyer said, is giving buyers something they haven't had in a while: time—"Time to compare options, negotiate, and make informed decisions without the pressure of bidding wars. It's a healthier dynamic for the long term," he said. "Sellers are adjusting too, especially in areas where new construction is offering strong competition. It's a more balanced market than we've seen in recent years."
In Southwest Florida, where many of the biggest price drops are concentrated, "sellers of existing homes aren't just competing with one another, they're also up against builders who are motivated to move inventory and often have the flexibility to offer competitive prices and incentives like interest rate buy-downs," Weisheyer said. "That creates a more competitive environment and, in some cases, has contributed to downward pressure on resale prices."
Some of the cities experiencing the biggest price drops are facing these same statewide challenges plus some of their own. In Naples, the tourism industry took a significant hit after Hurricane Ian, which in turn caused job losses and impacted the metro's real estate market.
The city—like much of Southwest Florida—is also struggling to adjust to new safety regulations that have thrown the condo market into chaos, spurring a surge in for-sale inventory at a time when buyers are withdrawing to the sidelines due to the higher risk of natural disasters and rising fees and home insurance premiums.
Similar dynamics—higher insurance premiums due to the increased hurricane risk and higher replacement costs—have also contributed to bringing prices down in Punta Gorda, which, like Naples, is still recovering from Hurricane Ian.
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