Florida Housing Market Faces Significant Price Declines

Many homes in Florida are currently for sale as the housing market experiences a downturn.

News Summary

Florida’s housing market is experiencing a downturn, with major price declines reported in five key areas according to Cotality’s analysis. The median home prices in regions like Cape Coral, Lakeland, North Port, St. Petersburg, and West Palm Beach are struggling, highlighting a broader trend of instability in Florida’s real estate market. As prices decrease and demand fluctuates, the state is losing its ranking among the top 20 most expensive housing markets in the country, reflecting challenges posed by external economic factors.

Florida – Florida’s housing market is undergoing a significant downturn, with a new report highlighting major price declines in five key areas. According to Cotality’s July 2025 analysis, the statewide average home price appreciation has dipped to -0.8% as of April 2025, mirroring a broader slowdown in the national housing market.

The five Florida markets identified as having a very high risk of price declines include Cape Coral, Lakeland, North Port, St. Petersburg, and West Palm Beach. Cape Coral tops the list with a year-over-year price decline of -6.5%, bringing the median home price down to approximately $300,000. Following closely is Lakeland, which has seen a notable downward trend after reaching nearly $400,000 in early 2024. Currently, home prices in Lakeland are struggling to maintain stability as the market corrects itself.

North Port ranks third, facing a -4.3% year-over-year price decline, pushing current home prices around $420,000, down from earlier peaks of nearly $480,000 in early 2023. St. Petersburg follows with a gradual price decline, with homes now settling in the low $400,000 range after previous peaks just shy of $450,000. West Palm Beach, despite exhibiting significant volatility, has seen prices drop to about $420,000. These changes reflect a broader trend impacting Florida’s housing market.

In April 2025, the median sales price for homes in Florida fell below the national median of $395,000, now sitting at $390,000. This decrease has led Florida to lose its position amongst the top 20 most expensive housing markets in the nation. The prior increase in home prices during the past boom has been deemed unsustainable, prompting a necessary correction as economic pressures mount.

Several external factors contribute to the housing market’s instability. A shift in buyer demand, rising insurance costs, and fluctuating interest rates are significant influences on the current conditions. Nationally, home price growth has moderated, showing a slowdown to 2.0%, the slowest pace recorded since Spring 2012. While some regions continue to report price increases, it is evident that areas such as Florida, Texas, Hawaii, and Washington D.C. are currently facing negative growth.

Looking ahead, the national forecast for home prices from April 2025 to April 2026 predicts a 4.3% increase nationwide, standing in stark contrast to Florida’s localized struggles. Rising mortgage costs are compounding the affordability challenges faced by buyers. Palm Beach County is particularly impacted, showcasing the largest active home inventory of over 13,000 listings—more than double that of neighboring counties.

As the market continues to adjust, many sellers, including a couple from Hutchinson Island, are experiencing prolonged selling times. Increased market saturation and shifts in buyer demand are contributing factors. Real estate professionals highlight rising interest rates as a crucial element affecting sales and pricing trends. Mortgage payments have dramatically escalated due to interest rates spiking from 3% to 7%, further impacting prospective buyers’ ability to purchase homes.

In summary, Florida’s housing market is facing considerable price declines in key regions, with various factors contributing to its volatility. As the market undergoes these corrections, it remains crucial for both buyers and sellers to stay informed about the evolving conditions.