As Florida’s housing market finds its footing, sellers still face pricing realities

Florida’s housing market is settling into a period of measured stability, with pending sales on the rise and inventory levels flattening. Sellers who cling to pandemic-era pricing continue to face resistance from buyers navigating high mortgage rates and affordability constraints.

As of May 23, HousingWire Data shows the median list price of homes in Florida at $495,000, with the median price of new listings at $450,000. Forty-four percent of listings have seen a price cut — a signal that pricing discipline remains a dominant theme.

“We’ve been up year over year for closed sales for eight straight months after a two- to three- year period — basically since rates went up — where we saw a decline in sales, and that halted about halfway through last year,” Brad O’Connor, chief economist for Florida Realtors, told HousingWire.

“That does tell me there’s additional demand. Even a half a point of interest rate [change] has been good for us, and just that much has allowed our market to stabilize and there’s been some growth there.”

O’Connor said Florida Realtors measured the time on market for single-family homes that closed in April at 44 days.

“It’s elevated compared to that pre-pandemic period, but it’s not out of the sphere,” he said. “Condos and townhouses are around 60 days right now, and they’ve been as high as the mid-70s for us in recent months.”

Condo market response to new regulation

Longer times on market for condominiums partially stem from new regulations that followed the 2021 Surfside condominium collapse.

Despite these changes, condo sales have risen year over year for eight consecutive months, O’Connor said. Condos, he said, sit at roughly nine months of supply, tilting into buyer’s market territory.

“The story about Florida last year and the year before was how fast our inventory was increasing, especially since sales were falling during that period,” O’Connor said. “What we’ve seen over the last eight months is the inventory has really flattened out — and in some areas it’s declining. This is where it really depends where in Florida you’re looking.

“Parts of our state that have built a lot of single-family homes — southwest Florida and parts of central Florida — have seen the biggest price weakness and largest inventory growth. Other parts that are building constrained, like South Florida, have maintained their prices fairly well.”

Affordability, insurance and uncertainty

HousingWire Data shows that statewide pending sales for the most recent week totaled 6,208 — a 9.8% increase over the same time last year. This suggests buyer demand is slowly returning despite a higher-rate environment.

But 7% of properties have been relisted after being previously removed. O’Connor said that figure actually feels low, given the number of sellers who delisted last year.

“No one’s being forced to sell right now,” he said. “There are people who are trying to capitalize on what they thought was a high property value, but they’re not getting what they want. They can walk away. Some of those people might just be staying put and they’ve resigned themselves to wait until prices start moving again, which could be a while.”

Looking ahead, O’Connor said migration remains a dominant driver of Florida’s real estate market.

While in-migration has cooled from its post-pandemic peak, people continue moving to Florida from the West Coast and the Northeast.

“If interest rates were a little more favorable — they don’t have to be down at 3% like they were during the pandemic, but even like 5% — I think we would be seeing a lot more migration than we used to pre-pandemic into Florida,” O’Connor said. “Interest rates are key, of course, but the insurance rates were another driver of the lessening of affordability in Florida.

“Their growth rate has slowed down a lot. Legislation has dramatically increased competition and close to 20 insurance companies have come back into the state. That price competition is keeping our rates from growing a lot faster, like they were two or three years ago.”

The coming months, he said, will be crucial in determining how well Florida’s market weathers recent interest rate increases tied to geopolitical turmoil and economic uncertainty.

“I think we just wait to see what happens with the Iran war and the oil prices, which are a big driver behind the resurgence of mortgage rates as of late,” O’Connor said. “As an economist, I don’t have a model that can predict when those kinds of thing will will pass, so we all just need to stay on our toes.”