Inventory has surged by over 50% in key Florida cities like Tampa, Orlando, and the Space Coast, while demand has dropped by at least 10%, according to real estate data from Parcl Labs.
In Tampa, more than half of the homes on the market have experienced price reductions, making it one of the hardest-hit metro areas in the U.S.
A combination of sky-high mortgage rates, rising insurance premiums, and the increasing threat of hurricanes are the primary factors driving this trend.
Florida's insurance costs have skyrocketed by as much as 400% in recent years, partly due to the growing frequency of hurricanes. Homeowners in the state are paying some of the highest insurance premiums in the country, and many, like Holmes, have even had their policies canceled by insurers.
The condo market, once a symbol of Florida’s real estate boom, is also feeling the strain. Following the tragic condo collapse in Surfside in 2021, which claimed 98 lives, Florida introduced new laws mandating expensive structural assessments and repairs for condo buildings.
In older buildings, these costs are being passed on to owners through hefty special assessments, sometimes amounting to hundreds of thousands of dollars per unit. For condo owners facing major repairs, the market has already cooled significantly.
Some older units are selling for nearly 20% less than they did last year, as mortgage lenders grow hesitant to finance high-risk properties. At the Cricket Club condominium in North Miami, two-bedroom units that used to fetch $450,000 are now being sold for as little as $200,000 after residents were hit with a $134,000 assessment to cover repair costs.
Even institutional investors, long significant players in Florida’s real estate market, are beginning to pull back.
