The real estate market in Florida reaches troubling milestone

Single-family houses inventory in Florida has reached its highest level for a decade and it is “still climbing,” said President and founder of Altos Research Mike Simonsen. According to the latest data from Altos, the single-family inventory increased by 37.6 percent-what compared to 2024 this year. In comparison, the inventory has grown by 29 percent at the national level.

According to several housing estates, this growth changes that the Sunshine is shifting in favor of buyers and that real estate prices can finally slow down and even decrease after years of boom.

Why is it important

The real estate market in Florida exploded in the years after the outbreak of Covid-19 pandemic, when the increase in remote work led to an influx of new residents into the sunny state. The state reacted to its population growth by building up more new houses than almost every other state, but now these new lists have difficulty finding willing buyers because prices are still historically high and the mortgage interest still have around 7 percent mark.

According to housing statements, sellers in the Sunshine State increasingly have to hit buyers where they are, and reduce their prices to make their properties more attractive in a less competitive market.

What to know?

The inventory in the Sunshine State has grown since late spring 2023 due to Florida's unprecedented efforts to build new houses with the exception of Texas. In January, according to Redfin data, the number of houses in the state 213,166 for sale was 19.8 percent higher than a previous year. The number of newly listed houses with 54,335 was 8.1 percent higher. According to the real estate agent, the Florida market had eight months offering two months earlier.

According to Altos data, Florida only belongs to eight countries that have now had a higher stock than in 2019 (+8.6 percent), including Texas (+29.3 percent), Idaho (about +8 percent), colorado (+8, 9 percent), Oklahoma (+12.7 percent), Arkansas (+20.3 percent), Tennessee (+1.2 percent) and Georgia (+2.7 Percent).

It is not just new buildings that fit into the state growth of the state. A new regulation of the construction security, according to which the agents of the state are regularly subjected to inspections, and homeowners' associations have enough funds to carry out the necessary repairs and maintenance, has led to an explosion of the lists in South Florida in recent months, since the owners fear the fees for increasing the fees. However, these properties do not attract the interest of many buyers.

At the same time, the premiums strain the demand in the state-prone state of the Sunshine state and the difficulty of finding affordable coverage.

Despite the addition of a new inventory in Florida, property prices are still increasing at the state level, even if the pace of this growth has slowed down significantly. In January, the middle sales price of a house in the Sunshine State was $ 410,500 according to Redfin data, which had an increase of 1.4 percent compared to the previous year.

However, a large part of this new inventory accumulates on the Florida market, as the sellers have difficulty finding willing buyers, while the continuing affordability in the USA and many lower their prices to lure themselves up in bidders. The number of houses sold in Florida in January had decreased by 0.41 percent compared to the previous year, a total of 22,148 per redfin data. An average home in the state spent an average of 73 days on the market before it went under contract more than a year earlier.

According to Lance Lambert, analysts of real estate, “if” active lists with the increase in houses continues to increase for longer periods, this can indicate a potential future price weakness “.

What people say

Tracey Ryniec, Value Stock Strategist at Zacks, wrote about X and mentioned the case of Florida's villages: “You have evaluated from the market. The prices have to drop.”

Hannah Jones, Senior Economic Research -Analyst of Realor.com, said in a December report on Florida: “Warm markets, especially in Florida, have stacked more than typically on the inventory and slowed down the market pace than typical. In general, the south last year has slowed up the inventory and the market pace.”

What's next

While Texas and Florida have been leading inventory growth across the country in recent months, Simonsen recently said in an update that these two states have now “plateauging”, with the greatest shift of the inventory moving to the west coast.

Simonsen expects the inventory to increase by a further 15 percent at national level during 2025, which means that buyers have more options and probably more negotiation power. The real estate analyst runs out of it and 7 percent for the next few years.