If you've been anywhere near the Florida housing market, you know things have been wild for the last few years. Prices shot up faster than a rocket from Cape Canaveral! But lately, the tune is changing. According to the latest data from Cotality (formerly CoreLogic) for April 2025, while the national housing market is slowing its growth pace, five specific Florida housing markets have been flagged with a very high risk of experiencing a major price decline. These aren't just minor dips; the data suggests a significant vulnerability in Cape Coral, Lakeland, North Port, St. Petersburg, and West Palm Beach.

5 Big Florida Housing Markets Flagged for a Major Price Decline Risk

For a long time, Florida felt like the place everyone wanted to be. People were moving here in droves, fueling incredible demand for homes. Whether it was folks looking for sunshine and retirement, or remote workers fleeing expensive northern cities, the influx was massive. This led to bidding wars, homes selling for well over asking price, and property values climbing at an unsustainable rate.

But real estate markets, just like everything else, go through cycles. What goes up this fast often faces pressure to come down, or at least cool off significantly. Based on the April 2025 data from Cotality, that rapid run-up in Florida seems to be entering a correction phase.

Nationally, home price growth has definitely pumped the brakes. The report highlights that the year-over-year price growth across the U.S. slowed to 2.0% in April 2025. That's a big drop from nearly 3% just two months prior, and it's the slowest pace since Spring 2012! Single-family detached homes are still seeing some growth (around 2.46% annually), but single-family attached homes (think condos and townhouses) actually posted their first annual decline since 2012, dropping by 0.08%.

While some parts of the country, particularly more affordable areas in the Northeast and Midwest, are still seeing solid price gains, states that saw massive booms are now starting to show cracks. The report specifically names Florida, Texas, Hawaii, and Washington D.C. as states reporting negative home price growth in April 2025. Florida's statewide average appreciation dipped to -0.8%.

Dr. Selma Hepp, Cotality's Chief Economist, points out that while the number of markets seeing declines hasn't exploded nationwide (only about 14 of the top 100 largest markets reported annual declines, up slightly from 12), the majority of these are concentrated in just two states: Florida and Texas. This tells me it's not just a random scattering of price drops; there are specific, regional factors at play in these boom states.

And guess what? Florida's median sales price, which had soared, actually dipped below the national median ($395,000) to $390,000 in April 2025. This caused Florida to drop out of the top 20 most expensive markets list. That's a significant shift and tells us the market is clearly reacting to pressures.

Why Florida is Feeling the Heat (or lack thereof)

I've watched the Florida market closely for years. It's always had unique dynamics – tied to tourism, seasonal residents, retirement flows, and more recently, the remote work trend. The speed of the price increases during the peak of the boom felt unsustainable to many of us who understand market cycles. When prices go up 30%, 40%, or even more in just a couple of years in many areas, you build in a significant amount of risk if the underlying demand drivers change or affordability gets stretched too thin.

Here's what I believe is contributing to Florida feeling this correction more acutely than many other places right now:

1. Affordability Breaking Point: Even though Florida's median price dipped, remember that prices are still drastically higher than they were pre-pandemic. Combined with higher interest rates on mortgages (which make monthly payments much larger even if the price is the same), many potential buyers are simply priced out. The data shows that nationally, an income of $87,800 is required to afford the median-priced home. In Florida, even at $390,000, that income requirement is likely similar or higher in many desirable areas.
2. Increased Inventory: As the market slows, homes sit longer. This means more houses are available for buyers to choose from – what we call increased inventory. When there are fewer buyers chasing more homes, sellers lose leverage and often have to lower their prices or offer concessions.
3. Cooling Migration/Demand: While people are still moving to Florida, the frantic pace of the last few years seems to have slowed somewhat. The remote work trend might be stabilizing, and the sheer cost of living, including rapidly rising property taxes and especially skyrocketing homeowner's insurance costs, is making some people reconsider or look elsewhere. Insurance costs, in particular, are a major factor unique to Florida that adds a significant burden to homeownership.
4. Investor Pullback: A significant portion of the Florida market involves investors, whether buying rental properties, flips, or second homes. Higher interest rates and the prospect of prices falling make these investments less attractive, potentially reducing a key source of demand.

These factors create a challenging environment, leading to the statewide negative growth seen in April 2025. But the risk isn't uniform across the state. This brings us to the markets Cotality has specifically flagged.

The Florida Housing Markets Flashing Major Price Decline Warnings

What's particularly striking about the Cotality report is their “Markets to Watch” list. Using their analysis of the top 100 largest CBSAs (Core Based Statistical Areas, which are basically major metro areas or combinations of counties), they've identified the five markets with the highest risk of price decline. And every single one of them is in Florida.

Here are the five markets Cotality flagged as having a very high risk of price decline, in order of risk level according to their data:

Let's take a closer look at what the data tells us about these specific areas and why they might be considered high risk.

1. Cape Coral, FL

This market takes the top spot on the risk list, and it's not hard to see why when you look at the other data points. Cape Coral also appears prominently on Cotality's list of “Coolest Markets,” showing a year-over-year price decline of -6.5% in April 2025 based on their top 10 list (though the text mentions a -7% decline). The report specifically notes that prices in Cape Coral are back down to levels seen in the spring of 2022.

Looking at the price trend chart provided by Cotality, the line for Cape Coral shows a steep climb through 2021 and early 2022, peaking around mid-2022 near the $400k mark. Since then, it's shown a noticeable downward trend, fluctuating but consistently lower than its peak. By April 2025, it's hovering around the mid-$300k range.

From my perspective, Cape Coral saw explosive growth fueled by people seeking relative affordability compared to other Florida coastal areas, coupled with migration trends. This kind of rapid appreciation is often the most vulnerable when the market shifts. Add to that potential impacts from things like hurricane damage recovery (depending on the specific timing relative to the data) and soaring insurance, and you have a recipe for price pressure.

2. Lakeland, FL

Lakeland, located roughly between Tampa and Orlando in Central Florida, comes in as the second-highest risk market. The price trend line for Lakeland in the chart shows a steady, less volatile climb than some coastal areas, peaking later, around early 2024, just below the $400k mark. Since then, its line has shown a clear downward slope heading into April 2025, though it's still significantly higher than its starting point in 2021.

Lakeland also benefited greatly from the migration trend, attracting buyers looking for more affordable options within commuting distance (or remote working distance) of major hubs. It's a different profile than the coastal markets, less reliant on seasonal swings or beach appeal, but perhaps more susceptible to shifts in the general Florida economy and affordability constraints for typical homebuyers. A cooling in overall buyer demand hitting a market that saw strong, steady growth makes sense as a high-risk scenario.

3. North Port, FL

Another Southwest Florida market, North Port, ranks third for price decline risk. Like Cape Coral, North Port also appears on the “Coolest Markets” list with a -4.3% year-over-year decline in April 2025.

The price trend line for North Port in the chart shows one of the steepest ascents, particularly through 2021 and 2022, hitting a peak near the $480k mark in early 2023. It then experienced a sharp decline through mid-2023 before stabilizing and even showing a slight recovery attempt, but it still finished April 2025 well off its peak, around the $420k range.

North Port, encompassing areas like Port Charlotte and Venice, experienced tremendous demand and price surges. It's a popular spot for retirees and those seeking a slightly lower price point than Sarasota. Markets that surge this fast and then show volatility, as North Port's chart does, indicate significant price discovery is happening – sellers are having to figure out where the floor is as demand wanes. The fact that it's still considered very high risk despite some stabilization suggests ongoing headwinds.

4. St. Petersburg, FL

Moving over to the Gulf Coast across from Tampa, St. Petersburg is flagged as the fourth highest risk market. The price trend line for St. Petersburg shows a strong, consistent upward trajectory through late 2023, peaking just shy of $450k. Unlike Cape Coral or North Port, its decline appears more gradual and less steep, though still noticeable, settling around the low $400k range by April 2025.

St. Pete has been incredibly popular, transforming significantly over the past decade. Its appeal lies in its vibrant downtown, cultural scene, and proximity to beaches. While it might have a more diverse economy than some of the other flagged markets, it also saw substantial price increases, pushing affordability limits for many. Being a larger metro area, it might be more sensitive to employment trends and shifts in the buyer pool that flocked there during the boom. The risk here could stem from prices having simply gotten too high relative to local incomes and the broader market slowdown finally catching up.

5. West Palm Beach, FL

Rounding out the list at number five is West Palm Beach, on Florida's Atlantic Coast. The price trend line for West Palm Beach is perhaps the most volatile of the five, showing sharp increases, dips, a strong recovery into 2024 (peaking near $480k), and then a noticeable decline into April 2025, finishing near the $420k mark. This kind of up-and-down movement can indicate a market trying to find stable ground.

Palm Beach County is known for being relatively expensive, but West Palm Beach proper and surrounding areas saw increased interest from buyers seeking alternatives to even pricier locations further south in Broward and Miami-Dade. Like St. Pete, its appeal is broad, but the price surge was significant. The volatility in its price chart suggests a market where buyers and sellers have very different ideas about value right now, increasing the likelihood of prices having to adjust downward to meet the current reality of reduced demand and higher costs of ownership (mortgage, insurance, taxes).

Connecting the Dots: Why THESE Florida Markets?

While the Cotality report flags these five specifically, it doesn't detail why each one made the list beyond the data showing their price trends and risk factors. But based on my understanding of the Florida market and general real estate principles, it makes sense that areas which experienced the most rapid, perhaps speculative, price appreciation are now the most vulnerable.

Think of it like stretching a rubber band. The further you stretch it, the more force is pulling it back. These markets likely saw that rubber band stretched further than others. Factors like:

• An exceptionally high influx of out-of-state buyers or investors.
• Prices reaching levels that are far beyond what typical local wages can support.
• Increased inventory hitting the market as demand cools.
• Unique local pressures, such as insurance costs in coastal areas, becoming prohibitive.

These combined factors create a situation where sellers who need to sell are forced to lower prices significantly to find a buyer, dragging down the overall market value in that area.

It's important to remember that a “very high risk” of price decline doesn't guarantee a crash, but it certainly means conditions are ripe for prices to fall noticeably from their peaks. It indicates significant headwinds for price stability in these specific locations.

What Does This Mean for You?

If you are a buyer, seller, or homeowner in one of these five markets (or even just in Florida), this data is crucial.

• For Buyers: This could present opportunities, but caution is key. Don't assume prices will simply drop to pre-pandemic levels overnight. Do your homework on specific neighborhoods, understand local inventory, and factor in the total cost of ownership (including those high insurance premiums!). Being patient and negotiating is likely smart strategy.
• For Sellers: If you're in one of these high-risk markets, you absolutely must price your home correctly from the start based on current market conditions, not based on what your neighbor's house sold for a year or two ago. Be prepared for fewer offers, longer time on the market, and potentially needing to negotiate on price or offer concessions. The days of putting a sign in the yard and picking among multiple cash offers seem to be firmly in the rearview mirror in these areas.
• For Homeowners (not selling): This data highlights a potential decrease in your home's market value from its peak. This is often called a “paper loss” if you don't plan to sell, but it's still something to be aware of, especially if you have a variable-rate mortgage or HELOC tied to your home's value. It also reinforces the point about needing to budget for rising expenses like insurance and taxes, which can make staying in your home more expensive even if its market value softens.

It's worth noting that Cotality's national forecast for the year ahead (April 2025 – April 2026) actually projects a 4.3% increase in home prices nationally. This might seem contradictory to the Florida risk, but it reinforces the idea that real estate is incredibly local. The national average is boosted by markets that didn't see the same kind of extreme run-up as Florida, or where supply/demand dynamics are different. These five Florida markets are outliers facing unique challenges.

Dr. Hepp's comment about potentially improved optimism nationally due to factors like tariffs, recession fears lessening, and more supply is a positive sign overall, but it doesn't erase the specific vulnerabilities created by the rapid boom-and-cool cycle happening in parts of Florida.

Looking Ahead

The path forward for these five Florida markets will depend on a mix of factors. Will migration continue at a pace that absorbs the available inventory? Will insurance costs stabilize or continue to rise? What happens with interest rates? Will local job markets remain strong?

My personal take is that a period of price correction, or at least stagnation, is likely necessary and even healthy for markets that appreciated so dramatically. It helps bring prices back closer to alignment with what local residents can afford over the long term. The key is whether these corrections are gradual adjustments or more rapid declines. Cotality flagging these markets as “very high risk” suggests they lean towards the latter possibility.

Keeping an eye on future data releases from sources like Cotality will be essential to see how these markets perform in the coming months. For now, the warning flags are up, pointing squarely at Cape Coral, Lakeland, North Port, St. Petersburg, and West Palm Beach as areas facing significant headwinds in the Florida housing market.

Thinking of buying a slice of paradise in Florida? While the Sunshine State has been a magnet for new residents and investors, pushing home prices to dizzying heights, the music might be slowing down in some popular spots. If you've been watching the Florida property scene, you might be wondering if the party's over for some areas.

Well, recent data by Cotality suggests that at least 2 Florida Housing markets are bracing for a high risk of a price crash: Winter Haven and Tampa. These aren't just minor dips we're talking about, but significant warning signs that potential buyers and current homeowners need to understand.

Now, when I say “price crash,” I know it sounds dramatic. But the information we're looking at, including a report from Cotality with data insights looking at trends through March 2025, points to some serious vulnerabilities. So, let's dive into what's going on.

2 Florida Housing Markets Flagged for a Major Price Decline Risk

The Bigger Picture: What's Happening with US Home Prices?

Before we zoom into Florida, it's helpful to get a feel for the national housing scene. It’s been a bit of a rollercoaster, right? We saw a brief spark of hope in spring (around March of the previous year from the report's perspective, so March 2024) when lower mortgage rates led to a jump in pending sales – about 12% more than the year before. But that burst of energy didn't last long.

According to the latest figures (up to March 2025), year-over-year national home price growth has cooled a bit, down to 2.5%. That's a slowdown from 2.9% the month before. The national median home price is still a hefty $389,000, and you'd need an income of around $86,500 to comfortably afford it. So, affordability is still a big hurdle for many folks across the country.

Interestingly, while some areas are cooling, others are still hot. The Northeast, for example, is seeing strong price growth in places like Rhode Island, Connecticut, and New Jersey (all up 7% or more year-over-year). This, as Cotality's Chief Economist Selma Hepp points out, is partly due to a severe lack of homes for sale in those regions, which helps keep prices up, especially since homes there are often more affordable to begin with, around $230,000.

However, the national forecast does predict a 4.9% increase in home prices from March 2025 to March 2026. This tells me that while the overall market might still grow, some specific areas, particularly those that saw massive run-ups, could be in for a rude awakening. And Florida seems to be one of those places.

Why Florida? The Sunshine State's Shaky Ground

Florida has been the golden child of the housing market for a few years. People flocked there for the sun, the lifestyle, and, during the pandemic, for more space and fewer restrictions. This demand sent prices soaring. The Cotality report highlights that cumulative price increases in Florida (and Texas) since the pandemic have averaged a staggering 70% to 90%!

Think about that for a second. If a house was $300,000 before the pandemic, it could have shot up to $510,000 or even $570,000. That kind of rapid growth is often unsustainable. And now, we're seeing the consequences:

• Affordability Crisis: With the median home price in Florida at $395,000 (making it the 12th most expensive state), many everyday Floridians and potential newcomers are simply priced out.
• Rising Inventory: The report mentions “rapidly rising inventories” in Florida. When there are more homes for sale than buyers, prices tend to drop. This is a classic supply and demand situation.
• Negative Price Changes: Florida as a whole actually saw a slight price decrease of -0.3% in March 2025. Even more telling, eight out of eleven major markets in Florida recorded negative annual price changes. This isn't just a blip; it's a trend.
• Insurance Woes: While not detailed in this specific dataset, as someone who follows the Florida market closely, I can tell you that the escalating cost of homeowners insurance (and in some cases, the inability to get it at all) is a massive factor. This adds a huge, unpredictable cost to owning a home, making Florida less attractive for some.

It seems the very things that made Florida hot – its popularity and rapid growth – might be the seeds of its current correction.

Zooming In: Winter Haven, FL – A Closer Look at the Risk

The Cotality report specifically flags Winter Haven, FL as one of the top five most at-risk markets in the country for price declines. Located in Central Florida between Tampa and Orlando, Winter Haven was attractive for its relative affordability compared to the bigger cities. But it seems prices there got ahead of themselves.

Looking at the “High-risk market home price trends” graph provided in the report (which tracks prices up to March 2025), Winter Haven's price journey has been bumpy:

• It saw a peak around $330,000 in mid-2022.
• Then, prices fell back to around $300,000.
• There was another, smaller peak near $320,000 in mid-2023.
• Since then, the trend has been mostly downwards, with prices hovering around $310,000 by March 2025.

What this tells me is that after the initial boom, Winter Haven's market has struggled to maintain those peak prices and is showing signs of weakening. While a $310,000 median price might still seem reasonable to some, if it represents a significant overvaluation based on local incomes and fundamentals, further drops are likely. The risk here is that those who bought at the peak could find themselves owing more than their home is worth if prices continue to fall sharply.

Zooming In: Tampa, FL – Big City, Big Concerns?

Next up on the high-risk list is Tampa, FL. This one might surprise some folks, as Tampa has been a very popular destination, known for its job growth, vibrant culture, and beautiful Gulf Coast beaches. It's currently ranked as the #4 most at-risk market by Cotality.

Let's look at Tampa's price trend from the same graph:

• Tampa's prices peaked higher than Winter Haven, hitting around $385,000 in mid-2022.
• It then saw a noticeable dip to about $345,000 in early 2023.
• Prices did recover, climbing back up to $380,000 by mid-2023.
• After that, there was a general softening, with prices around $360,000 in early 2024.
• The data leading up to March 2025 shows a slight uptick, with Tampa's median price around $371,000.

Now, that slight uptick at the very end of the graph for Tampa might make you wonder why it's on the “high-risk” list. This is where I believe we need to look beyond just the line on the graph. The Cotality report's risk assessment likely includes other critical factors like:

• Pace of inventory increase: Is supply rapidly outpacing demand in Tampa?
• Valuation metrics: How do current prices compare to historical norms or local incomes? It could be severely overvalued despite the recent small bump.
• Affordability stress: Even at $371,000, if wages haven't kept pace, the market is on thin ice.

Tampa's story is a reminder that even a slight price increase in one month doesn't negate underlying risks, especially after such a massive run-up (remember that 70-90% statewide figure!). The concern is that the foundations supporting these prices might be weaker than they appear.

What's Driving the Risk in These Florida Markets?

So, we have Winter Haven and Tampa in the spotlight, but other Florida markets are also cooling. The “Top 10 Coolest Markets” list from the report includes:

• Fort Myers, FL: Down -5.3%
• Punta Gorda, FL: Down -4.1%
• Sarasota, FL: Down -3.6%

These are not insignificant drops. It shows a broader trend of softening in parts of Florida. The key drivers, in my opinion, boil down to a few things:

1. The Affordability Squeeze: This is the big one. When home prices rise much faster than wages, something has to give. Florida’s median home price of $395,000 is a tough pill to swallow for many.
2. Mortgage Rates: While rates dipped briefly, they've remained relatively high. This directly impacts how much house someone can afford. The report notes that consumer concerns about finances are putting a damper on things.
3. Skyrocketing Ownership Costs: It's not just the mortgage. As I mentioned, insurance costs in Florida have become a huge burden. Add property taxes and HOA fees, and the total cost of owning a home can be eye-watering.
4. Inventory Rebound: For a long time, there just weren't enough homes for sale. That's changing. “Rapidly rising inventories,” as the report states, mean buyers have more choices and less pressure to bid prices up. Sellers might have to compete more on price.
5. The “Good Times” Rolled Back: The unique conditions of the pandemic (remote work, stimulus money, a desire for more space) fueled a buying frenzy. As life returns to a new normal, that artificial boost is fading. The 70-90% price gains were an anomaly, not a new standard.

My Take: Is It a Crash or a Correction? And What Does It Mean?

As someone who's been watching housing markets for years, I tend to be cautious with the word “crash.” It implies a sudden, catastrophic drop like we saw in 2008. What I believe is more likely for markets like Winter Haven and Tampa is a significant price correction. This means prices could fall noticeably, perhaps by 10%, 15%, or even more in some localized pockets, to better align with local incomes and historical trends.

Here’s what I think this means:

• For Buyers: If you're looking to buy in these areas, this could be good news in the medium term. Lower prices and more inventory could bring opportunities. However, don't try to catch a falling knife. Be patient, do your homework, and make sure the numbers truly work for your budget, factoring in all costs. A pre-approval for a mortgage is a must.
• For Sellers: If you're thinking of selling in Winter Haven or Tampa, you need to be realistic. The days of naming your price and getting multiple offers in a weekend are likely over. Price your home competitively from the start, make sure it’s in top condition, and be prepared for it to sit on the market longer.
• For Homeowners: If you bought recently at a peak price and don't plan to move, the best advice is usually to ride it out. Markets are cyclical. As long as you can afford your payments, a drop in paper value isn't ideal, but it's not a realized loss unless you sell.
• For Investors: Speculators who bought hoping for quick appreciation might get burned. Long-term investors who focus on cash flow might still find opportunities, but due diligence is more critical than ever.

It's crucial to remember that real estate is hyper-local. Even within Tampa or Winter Haven, some neighborhoods might hold up better than others. That's why getting advice from a trusted, local real estate professional who understands the specific dynamics of your target area is invaluable.

Navigating a High-Risk Market: What Can You Do?

If you're in one of these potentially risky Florida markets, or considering entering one, here's my straightforward advice:

• Buyers, Be Cautious:
  • Don't rush: The fear of missing out (FOMO) is a dangerous motivator. Take your time.
  • Research, research, research: Understand local price trends, inventory levels, and average days on market.
  • Get pre-approved: Know exactly what you can afford before you start looking.
  • Negotiate: With more inventory, sellers might be more willing to negotiate on price or offer concessions.
  • Think long-term: If you're not planning to stay in the home for at least 5-7 years, buying in a correcting market could be risky.
• Sellers, Be Realistic:
  • Price it right: Overpricing your home in a cooling market is a recipe for frustration. Look at recent comparable sales (comps).
  • Presentation matters: Make your home shine. First impressions are critical when buyers have more choices.
  • Be patient and flexible: Sales might take longer, and you might not get your dream price.

The Sun May Still Shine, But with a Few More Clouds

Florida's allure isn't going away. People will still want to live and retire there. However, the housing market, particularly in places like Winter Haven and Tampa, appears to be entering a necessary correction phase after years of unsustainable growth. The risk of a significant price decline in these 2 Florida Housing markets is real, according to the latest analyses.

This isn't a reason to panic, but it is a reason to be informed, cautious, and strategic. Whether you're buying, selling, or just watching from the sidelines, understanding these dynamics is key to making smart decisions in a changing market.

Florida's red-hot housing market might finally be cooling down after years of breakneck speed. If you've been watching from the sidelines, wondering if things will ever change, listen closely. Recent forecasts suggest that 24 housing markets in Florida will see price declines by early 2026.

That's right, actual price decreases are on the horizon for specific areas, signaling a potentially significant turn from the frenzied buying we've gotten used to. This isn't just wishful thinking; it's backed by data showing a broader market “normalization” across the Sunshine State, with more homes for sale and a gentle easing of those sky-high prices.

24 Florida Housing Markets Could See Home Prices Drop by Early 2026

The Sunshine State's Housing Market: Catching Its Breath

For what feels like an eternity, “Florida real estate” and “soaring prices” have gone hand-in-hand. But things are starting to change. According to the latest data from Florida Realtors® for March and the first quarter of 2025, the market is showing clear signs of normalization.

What does “normalization” mean for you? Think of it like this: after a wild party, things are finally settling down. 2025 Florida Realtors President Tim Weisheyer put it perfectly: “After years of incredibly low inventory and ever-increasing home prices across Florida, we are experiencing a normalization of the real estate market in our state.” He added, “This is great news for homebuyers that have been sitting on the sidelines as increased for-sale inventory and the easing of median prices brings more opportunities.”

Let's look at some numbers from early 2025 to see this shift in action:

• More Homes on the Market: New listings for single-family homes in March 2025 were up a healthy 10.8% compared to March 2024. For condos and townhouses, new listings rose 5.8%. This trend continued throughout the first quarter of 2025.
• Inventory Growing: With more homes being listed, the total number of homes for sale (active inventory) is also up. For single-family homes, there was a 5.5-months’ supply in March 2025. For condos and townhouses, it was even higher at a 10.1-months’ supply. A balanced market is typically considered to have 5-6 months of supply, so condos are definitely tilting towards a buyer's market.
• Prices Easing (Slightly):
  • The statewide median sales price for single-family homes in March 2025 was $412,500, down 1.9% from the previous year.
  • For condos and townhouses, the median price was $315,000, a more noticeable drop of 4.5% year-over-year.
  • Looking at the whole first quarter of 2025, single-family home prices were pretty flat (down just 0.1% year-over-year), while condo/townhouse prices were down 3.2%.

In my view, this isn't a market crash, but a much-needed deep breath. For years, buyers faced intense competition and a feeling of desperation. Now, the playing field is starting to level out.

Why the Cooldown? Peeling Back the Layers

So, what's causing this shift from a seller's paradise to a more balanced (and in some places, buyer-friendly) environment? It's not just one thing, but a combination of factors.

• Inventory Bounce-Back: As mentioned, there are simply more homes to choose from. When buyers have options, they don't feel pressured to bid way over asking price. This increased supply is probably the biggest single factor. For a while there, it felt like you had to make an offer on a house sight unseen within minutes of it listing! Thankfully, those days seem to be fading.
• Mortgage Rate Mayhem: Remember those super-low mortgage rates during the pandemic? They fueled a lot of buying power. As Florida Realtors Chief Economist Dr. Brad O’Connor pointed out, March 2025 saw a slight uptick in single-family homes going under contract (up 0.5% YoY) when rates briefly dipped to around 6.75%. But he also warned this boost would be “short-lived” as rates have since climbed back towards 7%. Higher rates mean higher monthly payments, and that simply prices some buyers out or makes them pause.
• The Affordability Wall: Let's be honest, prices in many parts of Florida got really high, really fast. Wages haven't kept pace. Eventually, you hit a point where fewer people can afford to buy, even if they want to. This affordability crunch naturally cools demand.
• The Elephant in the Room: Insurance Costs: This is a uniquely Floridian headache, and it's a big one. Skyrocketing property insurance premiums, and in some cases, the inability to get coverage at all, are a massive deterrent for buyers. I've spoken to many potential buyers who were shocked when they got insurance quotes, and it completely changed their budget or even their decision to buy in certain areas. This isn't just a small extra cost; it can add hundreds, sometimes thousands, to monthly housing expenses. This factor, in my opinion, is significantly impacting the condo market, where association fees often include insurance, and those fees have been climbing steeply. The 10.1-month supply for condos is a testament to this challenge.
• Buyer Fatigue: After years of bidding wars, rejected offers, and watching prices climb, many buyers are simply tired. They're less willing to jump through hoops or pay any price.
• A Gentle Dip in Sales: Closed sales for existing single-family homes in March 2025 were down 1.3% year-over-year, and condo-townhouse sales saw a bigger dip of 9.8%. While not a dramatic plunge, it shows demand isn't as ferocious as it once was.

Spotlight on the 24: Which Florida Markets Might See Prices Dip by Early 2026?

Now for the part you've been waiting for. Zillow, a major player in real estate data, has put out a forecast looking ahead to early 2026. They've identified 24 Metropolitan Statistical Areas (MSAs) in Florida where they predict home values could decline.

It's crucial to remember: these are forecasts, not guarantees. The real estate world is complex. However, Zillow has a lot of data and sophisticated models, so their predictions are definitely worth paying attention to.

Here's a look at the 24 markets and Zillow's projected percentage change in home values by March 31, 2026 (from a base date of March 31, 2025):

(Data Source: Zillow Forecast, Base Date March 31, 2025)

What Jumps Out From This List?

• Southwest Florida Leads the Dip: Punta Gorda (-2.9%) is at the top, along with The Villages. Areas like North Port (-2.3%) and Cape Coral (-2.0%) are also predicted to see some of the more significant (though still relatively modest) declines. These regions saw explosive price growth during the pandemic, so a slight pullback isn't entirely surprising to me. Some of this might be a natural correction after such a rapid run-up.
• Larger Metro Areas Included: It's not just smaller towns. Jacksonville (-2.1%), Orlando (-1.9%), and Tampa (-1.3%) are on the list. Even Miami (-0.9%) and Naples (-0.8%) are projected for small decreases, though these are some of the most resilient markets.
• The Panhandle Too: Crestview (-2.2%), Panama City (-2.2%), and Pensacola (-1.4%) are also expected to see prices soften.
• Modest Declines Overall: It’s important to keep perspective. The largest predicted decline is -2.9%. This isn't a catastrophic crash. For a home valued at $400,000, a 2.9% decline is $11,600. While not insignificant, it's a far cry from the major corrections seen in past downturns.

Why these specific markets? It's likely a mix of reasons. Some may have seen prices get particularly ahead of local incomes. Others might be experiencing a slowdown in retiree demand or an increase in new construction finally catching up. Markets heavily reliant on tourism or second-home buyers can also be more sensitive to economic shifts. I also suspect that areas hit hardest by insurance premium hikes might be feeling more pressure.

Is It a Crash or a Correction? Understanding the “Decline”

When people hear “price declines,” the mind often jumps to 2008. Let me be clear: what Zillow is forecasting, and what the broader Florida Realtors data suggests, is not a 2008-style crash.

• A crash is a rapid, steep, and often unexpected drop in prices, usually across the board, driven by panic and severe economic issues (like the subprime mortgage crisis).
• A correction is a more moderate decline in asset prices, often after a period of strong gains. Think of it as the market letting off a bit of steam or returning to more sustainable levels. The declines Zillow projects – mostly in the 1% to 3% range over about a year – fit the description of a correction much more closely.

From my perspective, a slight cooling and these modest predicted declines in certain areas could actually be a healthy thing for the Florida market in the long run. It can help improve affordability, allow wages to catch up a bit, and bring more balance. The hyper-inflated price growth we saw was unsustainable.

What This Changing Market Means for You

Whether you're looking to buy, sell, or invest in Florida, this evolving market has implications.

For Buyers:

• More Choices, Less Frenzy: This is your moment! Increased inventory means you can be a bit more selective. The days of having to make an offer in 5 minutes with no inspections are hopefully behind us in most areas.
• Potential for Negotiation: With sellers not holding all the cards, there might be more room to negotiate on price, repairs, or closing costs. Don't be afraid to make a reasonable offer.
• Stay Vigilant on Rates and Insurance: While prices might soften, mortgage rates are still a key factor in your monthly payment. And absolutely get those insurance quotes early in the process! It can make or break a deal.
• My advice: Get pre-approved for a mortgage so you know your budget. Work with a local Realtor® who truly understands the micro-trends in the specific neighborhoods you're considering.

For Sellers:

• Price Realistically: The strategy of “list it high and see what happens” might not work anymore. Overpriced homes will likely sit on the market. Look at recent comparable sales very carefully.
• Presentation Matters More Than Ever: With more competition, your home needs to shine. Invest in staging, good photography, and address any deferred maintenance.
• Patience May Be Key: Homes might take a bit longer to sell than they did a year or two ago. Be prepared for that.
• My advice: This is where a savvy real estate agent earns their keep. They can help you price correctly, market effectively, and navigate offers in a more balanced market.

For Investors:

• Opportunities May Emerge: A correcting market can present buying opportunities for long-term investors. However, the “buy anything and it'll go up” days are over.
• Focus on Fundamentals: Look for properties with strong cash flow potential, in desirable locations with good long-term growth prospects.
• Due Diligence is Crucial: Analyze deals carefully, factoring in higher interest rates, insurance costs, and potentially flatter short-term appreciation.
• My advice: Florida's long-term appeal (population growth, tourism, business-friendly environment) remains, but speculative short-term flips are much riskier now.

My Take on Florida's Real Estate Future

I've been watching and analyzing the Florida real estate market for years, and while these forecasts for price declines in 24 markets are newsworthy, they don't spell doom for the Sunshine State. Far from it.

Here’s what I believe:

1. Normalization is Healthy: The “fever” of the past few years needed to break. A return to a more balanced market is good for everyone in the long run. It allows for more sustainable growth.
2. Florida's Core Appeal Endures: People will continue to move to Florida for the weather, beaches, lifestyle, and no state income tax. Businesses are still relocating and expanding here. This underlying demand will support the market.
3. Local, Local, Local: Real estate is incredibly localized. While Zillow predicts a 2.1% dip for Jacksonville MSA, one specific neighborhood within Jacksonville might hold its value, while another sees a slightly larger drop. This is why, as Tim Weisheyer from Florida Realtors® mentioned, the “expert guidance” of a local Realtor® is so vital. They understand the “nuances of local market dynamics.”
4. The Insurance Challenge is Real: This is the biggest wildcard, in my opinion. If Florida can find solutions to stabilize the insurance market, it will remove a major headwind. If not, it will continue to put pressure on affordability and demand, especially in coastal and older properties.

This isn't a time to panic, but it is a time to be informed and strategic. The market is shifting, and understanding these changes can help you make smart decisions.

Riding the Florida Real Estate Waves

So, yes, the headlines about 24 housing markets in Florida potentially seeing price declines by early 2026 are attention-grabbing, and based on Zillow's data, they reflect a real possibility. However, the broader context is a market that's normalizing after an unprecedented boom. We're seeing more homes for sale, a slight easing in prices overall, and a shift away from the extreme seller's market of the recent past.

For many, especially buyers who felt priced out, this change could be a welcome development. It’s a move towards a more sustainable and, dare I say, sensible housing market in Florida. Whether you're buying, selling, or just watching, stay informed, consult with local pros, and remember that real estate is a long game. The Sunshine State's story is far from over.