Jessica Wong
5 min read
Florida might still be basking in sunshine, but its once-sizzling housing market has simmered down.
The momentum that fueled pricing spikes during the pandemic has taken a sharp turn. For the first time in years, buyers are regaining leverage.
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Sellers, squeezed by skyrocketing insurance premiums, softening demand and growing inventory, are cutting prices, covering closing costs and easing up on contingencies just to seal the deal.
But is this shift a buyer’s paradise? According to real estate experts, the Florida housing story is more complicated than simply buyer-friendly.
During the COVID-19 era, a wave of remote workers, sun-seeking transplants and looser restrictions turned Florida into ground zero for red-hot real estate. Builders raced to meet demand. Now that demand has cooled.
Then came two hurricanes, a spiraling insurance crisis and record-breaking homeownership costs. Panic-inducing headlines are drawing comparisons to the 2008 crash, but experts urge caution before sounding the alarm.
“It’s nowhere near that,” real estate expert Vincent Arcuri said recently on Full Circle Florida. “Interest rates are at 6.5 %, if you saw interest rates go anywhere in the 5s, you would see the market shift overnight, properties would start to skyrocket again, so it does have a lot to do with how much I'm putting down and how much is my payment? And that's what really drives the economics of people buying homes.”
Some homeowners who bought at the peak may be feeling the pinch.
“You have people that came from the pandemic that overpaid, now it’s time to pay the fiddler,” Arcuri said. “I think those people that came in and paid $50,000, $100,000 over market, they’re seeing a reduction now in value, plus they overpaid when they bought, which is offsetting some of the equity in those homes.”
So are the issues local or regional? According to Arcuri, Florida’s housing market isn’t uniform.
Inventory is rising in parts of Florida like Tampa Bay, St. Petersburg and Clearwater, but much of that is due to condos, not single-family homes. The surge is being driven by region-specific factors: new milestone inspection rules, skyrocketing HOA fees and soaring insurance premiums — all of which are dragging down condo sales.
