Florida’s real estate market has boomed in recent years, but while home prices across the U.S. are expected to rise modestly nationwide this year, at least three cities in the state are forecasted to experience a decline.
Tampa, Winter Haven, and West Palm Beach have a 70% chance or are at “very high risk” of seeing prices fall, according to a new report by real estate analytics company Cotality (formerly CoreLogic).
“For years, Florida has been the darling of the U.S. real estate market. But as someone who’s been watching the housing market closely for a while now, I can tell you that what goes up must sometimes adjust, and Florida seems to be hitting that point in certain areas,” writes real estate investor Marco Santarelli at Norada.
The Sunshine State’s median list price peaked in June 2022, at $439,500, after a sharp run-up following the COVID-19 pandemic. At that point, prices were up 49.5% from their pre-pandemic level in June 2019, Realtor.com data shows.
But the state is now experiencing an insurance and affordability crisis. Prices have softened statewide, with the median list price up only 33.9% year over year, compared with February 2019.
“Prices have softened as for-sale inventory has piled up in Florida and homes take longer on the market than they did in the post-pandemic buying frenzy,” says Realtor.com® senior economist Joel Berner.
“This isn’t yet a concern, just the market adjusting to a new pace. Some of the change in listing price is due to smaller homes being on the market as well. We see much less of a retreat in median listing price per square foot since 2022 than we do in the overall median, which is a good sign that the market is remaining on track.”
(Realtor.com)
Florida real estate market is cooling
The Sunshine State has five of the 10 coolest markets in America, according to the Cotality report.
The three metros with the biggest chance of seeing declines in the year ahead were ranked Nos. 1, 3, and 5 in terms of markets with a 70% chance or higher of seeing home prices sag.
While reasons vary, the looming declines are generally tied to soaring insurance rates, overdevelopment, affordability (the rapid run-up in prices from the pandemic onward are beginning to be too expensive for many), and a correction after extreme growth.
“Florida has definitely experienced a slowdown in market dynamics in many areas. Tampa, Winter Haven, and West Palm Beach are no exception,” local real estate agent Cara Ameer tells Realtor.com. “Rising home prices and insurance rates and climate risks have contributed to this.”
The insurance crisis in the state has also become a flashpoint in local politics, with gubernatorial candidate Rep. Byron Daniels listing it as No. 1 on his three-point agenda when announcing his candidacy last week.
“There is an insurance crisis in the state of Florida that is running unchecked under the current governor, Ron DeSantis,” Brenda Christensen, CEO of Stellar Public Relations, who has lived for a decade in the state, tells Realtor.com.
“I’ve personally noticed a slowing of the market here in Southwest Florida, especially in Cape Coral, which had been previously designated a top location in best places to live by the media, as well as a former ‘hot’ real estate market.”
HOA fees, too, climbed in the wake of the Surfside condo collapse, which killed 98 people, rising 60% since 2019. However, there are now eight bills in the state looking to ease the financial burden on condo owners, according to the Tallahassee Democrat.
Then, there is climate change risk.
“While not always explicitly stated, concerns about sea-level rise, hurricanes, and other climate-related risks could be starting to factor into buyers’ long-term decisions about investing in coastal Florida properties,” says Santarelli.
Two of the three metros, Winter Haven and West Palm Beach, still have a median list price less than the national, at $412,000 for February.
1. Tampa
Median list price: $463,000
Tampa is ranked as the No. 1 market in Florida with a “very high” risk of price decline with a year-over-year home price change that is down 0.9%, and an even bigger 1.6% decline from October 2024 to January 2025.
According to Santarelli, who did a deep dive into the data, the main reasons for this shift are overdevelopment and a supply surplus; affordability; a shift in demand; and skyrocketing insurance costs.
“Florida’s insurance crisis is no joke,” he writes. “Homeowners insurance premiums have skyrocketed, making it much more expensive to own a home, especially near the coast. This hits places like Tampa hard and can dampen buyer enthusiasm. Who wants to move to paradise if it costs a fortune just to insure your house?”
(Realtor.com)
2. Winter Haven
Median list price: $305,000
Winter Haven is nestled inland, making it much less vulnerable to extreme weather events, but it has still seen a 0.9% price decline year over year and a 1.2% drop from October 2024 to January 2025.
“Winter Haven saw huge price jumps during the pandemic boom,” writes Santarelli. “This kind of rapid appreciation is often unsustainable and sets the stage for a potential correction. What goes up fast can sometimes come down fast.”
(Realtor.com)
3. West Palm Beach
Median home list price: $369,500
This beach enclave adjacent to the extremely posh Palm Beach, which is home to President Donald Trump‘s Mar-a-Lago, has recently seen development money flowing in.
The Grand and The Spruce are large multifamily buildings with more than 200 rental apartments each that recently went up in the area.
Luxury condo buildings such as The Bristol and The Berkeley are popping up along the waterfront, and GL Homes is planning a 10-block development of townhomes.
Billionaire real estate developer Stephen Ross is spending $10 billion to add more than 6 million square feet of office space, 1.4 million square feet of condos, 700,000 square feet of retail and restaurant space, and 870 hotel rooms across 70 acres of land in West Palm Beach.
It’s this very surge in development that is part of the issue, says Cotality’s report. The data shows West Palm Beach experienced a 0.5% price decrease year over year and a 1.2% dip from October 2024 to January 2025.
“Luxury market sensitivity” is contributing to the price flux because it can be more “volatile than the broader market”, explains Santarelli.
“High-end buyers are often more sensitive to economic fluctuations and market sentiment. If there’s a perception of risk or economic uncertainty, they might pull back faster than other buyers.”
Additionally, luxury buyers have more options, so they can pull up stakes and reject an area if they start to get skittish.
And it can be difficult for existing-home sellers competing with the incentive-heavy new developments.
“Builders are aggressively offering all kinds of incentives from interest rate buydowns, money to use off the price toward options and upgrades, waiving lot premiums, and even offering homes at their corporate employee discount,” says Ameer.
(Realtor.com)
Is now the time to sell?
Santarelli strongly hints that it might be—at least for these three metros.
“If you’re a homeowner in Tampa, Winter Haven, or West Palm Beach, this report should be a wake-up call,” he writes. “It doesn’t mean your home value is guaranteed to plummet, but it does suggest a higher probability of price decline.
“If you’re thinking of selling in the next year or two, it might be wise to consider your timing and pricing strategy carefully.”
Some residents in Florida are also looking to move to states with more temperate climates, like Tennessee, Alabama, Georgia, and North Carolina, says Ameer. These states are affordable, too.
“This is the fallout after the real estate binge party of 2020–22. Some people who hastily ran down to Florida to take advantage of a warm-weather lifestyle and lower cost of living are finding out that it isn’t much lower anymore.
“Their insurance has dramatically gone up as has their taxes. If they were able to work remotely, many of those arrangements have ended.”
