Florida’s housing market has moved decisively from scorching-hot to increasingly fragile. After experiencing some of the nation’s steepest home price appreciation during the Pandemic Housing Boom, Florida is now leading on the way down — particularly in its condo sector. In 92 percent of tracked Florida metro areas, condo prices are falling, and two-thirds of its single-family markets are posting year-over-year declines. While the national housing market remains resilient — with single-family prices up 2.8 percent and condo prices eking out a 0.4 percent gain — Florida is unmistakably in correction mode.
What explains this divergence? A perfect storm of economic, regulatory, and demographic shifts has upended the once-overheated supply-demand dynamics that propelled Florida real estate to record heights. From migration reversals and insurance shocks to tighter financing conditions and overbuilt inventory, Florida’s housing market is facing pressure on multiple fronts.
Post-Pandemic Migration Reversal
The extraordinary surge of migration into Florida during the pandemic was central to its housing boom. Between March 2020 and June 2022, home prices in the state soared 51 percent, compared to 41 percent nationally, fueled by an influx of remote workers and retirees fleeing higher-cost states. But that inflow has slowed sharply. Net domestic migration to Florida dropped to just 64,000 in 2024 — down more than 75 percent from the 314,000 peak in 2022.
That reversal has fundamentally weakened demand for housing of all sorts. Without the steady inflow of higher-income, out-of-state buyers, Florida’s housing markets are increasingly reliant on local purchasing power. And with wage growth failing to keep pace with rising costs of ownership — particularly for insurance and association fees — affordability constraints are biting hard.
Regulatory Fallout
The 2021 collapse of the Champlain Towers South in Surfside, which killed 98 people, has led to sweeping changes in Florida’s building safety regulations. These rules now mandate structural inspections and higher reserve funding for repairs, particularly in older condo buildings near the coast. While well-intentioned, the financial and logistical burdens have been severe. Homeowners associations have levied significant special assessments and hiked monthly dues — sometimes on an order of hundreds of dollars per month.
This regulatory shock has hit condos particularly hard, both by raising carrying costs and by chilling demand in older buildings seen as liabilities. As a result, Florida’s condo market has softened more acutely than its single-family segment. In Punta Gorda, condo prices have fallen 11.4 percent over the past year. In Tampa and North Port, declines are near or above 8 percent.
Hurricane Ian’s Lingering Effects
Natural disasters often have unpredictable consequences for housing markets, and Hurricane Ian was no exception. The 2022 storm caused nearly $115 billion in damage, flooding homes and destabilizing infrastructure in Southwest Florida communities like Cape Coral and Punta Gorda. The result has been a flood of damaged inventory entering the market alongside rising rebuilding costs, strained insurance capacity, and reduced buyer interest.
In these areas, the result is clear: year-over-year price drops of 5 to 7 percent for single-family homes, with even steeper losses in the condo segment. The shadow of future storm risk — and rising insurance costs — continues to depress valuations.
A Surge in New Supply
Unlike many urban markets constrained by zoning or geography, Florida boasts a relatively elastic housing supply. It’s a mixed blessing. During the boom, developers ramped up aggressively, particularly in exurban and suburban markets. Now, those homes are coming online just as demand wanes. New construction incentives — especially mortgage rate buydowns — have made builder homes more attractive relative to existing inventory, putting further pressure on resale values.
In fact, Florida is one of the few states where active listings now exceed pre-pandemic levels. While housing inventory remains tight nationally, Florida is seeing a relative glut — especially in areas where price appreciation outpaced fundamentals.
Punta Gorda, Florida is a clear example of a market where home prices outran true value, condo prices falling 11.4 percent and single-family home prices declining 7.3 percent year-over-year as of early 2025. This correction reflects how pandemic-era price surges, rising insurance costs, and new regulatory pressures have exposed underlying weaknesses in overheated Florida markets.
The Insurance Affordability Crisis
Perhaps no factor looms larger in Florida’s current housing woes than the state’s mounting home insurance crisis. While the median US premium has risen 33 percent over the past three years, Florida homeowners have faced significantly larger increases due to outsized hurricane exposure, rising replacement costs, and a volatile reinsurance market. In some parts of the state, annual premiums now exceed $10,000.
These spikes are exacerbating affordability issues. Homebuyers not only face elevated purchase prices (relative to pre-pandemic levels), but also steeper monthly carrying costs. Combined with higher HOA dues, mortgage rates still near two-decade highs, and broader inflationary pressures, the overall cost of owning a Florida home has become unsustainable for many prospective buyers.
Soft Landing, or a Harder Fall?
Florida’s housing correction is not (yet) a collapse, but it marks a clear inflection point. After years of rapid growth powered by unique pandemic-era tailwinds, the state now faces a reckoning. The market’s sensitivity to shifts in migration, insurance, and regulation — amplified by its highly cyclical nature — suggests that further downside is possible in vulnerable regions, particularly those with aging condo stock or recent storm damage.
While Miami and Orlando have so far bucked the broader trend — with modest price gains over the past year — these gains are narrowing, and headwinds are strengthening. Without another wave of inbound buyers or a meaningful retreat in borrowing and insurance costs, Florida’s real estate market may remain under pressure well into 2025.
In short, what went up fastest is now coming down hardest. For investors and policymakers alike, Florida’s unfolding housing correction offers a cautionary tale in boom-bust dynamics — and a reminder that fundamentals, not just momentum, ultimately anchor real estate markets.
