What’s New for Florida Real Estate in 2025 and 2026
In this article I will try to keep it simple, avoiding real estate jargon and quotations from experts who tend to use obscure real estate lingo in order to make the article more palatable for average folks. So, when I make broad statements, it will be from a consensus of experts, but not using their real estate industry terms, which many readers do not fully understand.
The Florida housing market has always been a topic of interest for experts, buyers, and sellers. Its beautiful beaches, tourist spots, and climate have led to significant population growth over the years. But is this rapid growth sustainable or is a downturn inevitable?
The consensus of experts is that while sales may slow due to rising interest and home insurance rates, Florida continues to lead the nation in new arrivals.
A look at the recent past is often a good lens to the future. The state has experienced an 80% rise in home values during the past five years. And this upward trajectory is predicted to persist (although perhaps at a slower rate for the coming two years for the reasons mentioned above).
Why? After all, high tax and high crime states will continue to lose population, and Florida’s climate is not likely to change (I’m referring to the meteorological and the low tax climate).
In the last quarter of 2024, the median price of a single-family home rose only 0.2% to $410,000. This indicates a slowdown, but not a reversal of home values. So, while mortgage rates may be weighing prices down, the limited inventory and demand balanced out the high mortgage rates.
Florida Realtors Chief Economist Dr. Brian O’Connor said that while Hurricane Helene threw a wrench into the works and did cause some serious issues for the industry, its impact was far less than was feared.
I think that speaking of the hurricane also speaks to a wider issue. It highlighted Florida’s resilience and its citizen’s ability to overcome natural disasters and whatever else the state may encounter. In short, after the initial shock, the real estate market recovered quickly.
Although mortgage rates are again at about 7%, the consensus of experts is that rates will fall in the year ahead.
One positive trend is the increase in home inventory in the Sunshine State. In the third quarter of 2024 Florida saw a year-over-year rise in the number of homes available for purchase. This, of course, is good news for buyers as it will offer greater choice and a better price. Single family homes had a 4.6-month supply in the third quarter – up 43.8% year-over-year. During the same period, condos and townhomes had a 7.4 month supply up an amazing 80.5% year-over-year.
What is the Bottom Line?
Economic trends (inflation and high mortgage rates) are counterbalanced by demographic trends (in-migration from other states. The population of the state has grown for the past 12 years in a row (an average of 1.4% a year). But in 2022 the population rose by 12.9%.
Looking ahead to 2025 and 2026, there should be a period of stabilization and gradual growth. But a significant number of experts predict that 2025 and 2026 will see rises in housing prices of between 3 and 5 percent.