The Florida housing market has always been a focal point for buyers, sellers, and investors, thanks to its sunny climate, vibrant cities and thriving tourism industry. Over the years, the state has seen a significant boom in population and housing demand. However, with such rapid growth, questions about the market's sustainability and potential challenges naturally arise.
While some believe the market might face obstacles due to uncertainty around a new administration, experts largely agree that major shifts like a market crash are unlikely in the next few years. Instead, a slower growth pace could stabilize the market, benefiting both buyers and sellers.
To understand what could lie ahead for the sunshine state, in this blog we’ve examined the key housing market trends of 2024 and explore predictions for 2025.
2024 trends
While we don’t have a crystal ball to accurately predict what the future will look like for Florida’s housing market, it’s worth taking a look back on what’s happened in 2024 to identify some key trends that could indicate what’s to come in the next year.
First, to grasp Florida's housing market, it's essential to consider the national landscape. Nationwide, home prices continue to rise, although at a slower rate. CoreLogic predicts a modest 2.2% annual increase (from July 2024 to July 2025).
This slower growth reflects the impact of high mortgage rates and affordability challenges. However, Florida's unique mix of local economic factors, demographic shifts, and climate concerns makes its housing market more complex than national trends might suggest.
Let’s take a closer look at the main trends we saw across Florida in 2024.
Rising inventory levels, prices easing
The housing inventory in Florida has seen a significant increase. According to Redfin, the number of homes for sale in Florida rose by 23.3% year-over-year in October 2024. Single-family homes had a 4.6-month supply, up 43.8% year-over-year, and condos and townhouses had a 7.4-month supply, up 80.5%.
This increase in inventory is providing more options for buyers, reducing the urgency and competition that characterized the market in previous years. With more homes available, buyers have more leverage to negotiate better terms and prices.
Speaking of prices, according to the Florida Realtors Research Department, heading into Q4, the state also saw house prices easing. Sales of single-family homes dropped by 12.3% annually (from September 2023 to September 2024), while condo and townhouse sales fell by 20.7%.
Despite these declines, median prices for single-family homes remained steady at $410,000, and condo and townhouse prices slightly decreased to $314,000. These figures indicate that while fewer homes are selling, their value is holding relatively well.
Regional market behaviours
Market behaviours varied significantly across the state. For example, while Tampa experienced a 7% drop in home sales, Miami had a strong year-over-year price growth of 9.1% as of July 2024. Below we take a look at some of the potential reasons behind these variations.
Impact of natural disasters
2024 was another rough year for natural disasters - ranging from back to back hurricanes to historic flooding events - Florida just couldn’t catch a break. While Hurricane Helene and Milton caused slight disruptions in sales, there has been a bigger impact caused by the frequency of these catastrophic events.
For example, according to the new report by Redfin, pending home sales in Fort Lauderdale dropped by 15.2% year over year and during the four weeks ending November 10th - the largest decline among U.S. metropolitan areas. Areas like West Palm (-13.8%) and Jacksonville (-9.5%) also saw drops, while pending sales rose 4.7% across the country during the same time period.
While these areas grappled with frequent natural disasters this year, they also were dealt another blow thanks to the frequency of these events.
Insurance and HOA fees increase
Insurance rates in Florida have surged, largely driven by climate-related risks. Nationally, Florida homeowners pay the most for their home insurance, with an average rate of over $11,000 annually in 2024 - a 7% increase year on year, according to Insurify.
Six of the 10 most expensive cities for homeowners insurance are on the South Florida coast, including Miami, Fort Lauderdale and West Palm. Five of the six Florida cities have a “Very High” risk of natural hazards, according to FEMA’s National Risk Index.
The state is also seeing HOA fees jump due to the increase in insurance costs. For example, HOA fees are up more than 15% year on year in Tampa, Orlando and Fort Lauderdale, according to Redfin.
Condo sales have been hit especially hard by HOA fee increases caused by increased insurance rate rises and new safety requirements in the wake of the Surfside condo collapse. As we mentioned before, condo and townhome sales dropped 20% year on year.
These increases add another financial burden to buyers, potentially dissuading prospective buyers and contributing to price corrections, especially in the southern end of the state.
The Miami anomaly
While many of the southern cities in Florida were impacted by both natural disasters and insurance-related and HOA fee increases, Miami remained strong with annual price growth of 9.1%.
While other cities like Tampa, Orlando and West Palm Beach saw increases of up to 17% in median monthly HOA fees and saw declines of up to 5% in the YoY change in median condo sale prices, Miami remained relatively unscathed. Miami only saw a 5% increase in HOA fees and a 2.2% decrease in median condo sales prices.
This growth is likely driven by unique economic factors, ongoing population growth and in-migration, as well as international investor appeal. But the question remains on the sustainability of Miami’s market, one that is already strained by affordability and environmental threats.
More on this topic when we look ahead to 2025.
High mortgage rates
Finally, for most of 2024, mortgage rates remained elevated, hovering around 6-7%. This has made borrowing much more expensive and has, in turn, slowed down sales activity. However, there is an expectation now that rates will gradually continue to decline as inflation pressures ease - potentially making home buying more accessible in the coming months and new year.
2025 predictions
Now that we’ve had a look back over the year, it’s time to look forward and understand what experts are expecting to see as we head into 2025.
Increasing inventory
The continued rise in inventory is expected to provide more options for buyers, moderating price growth. This increased supply will help balance the market, making it less competitive and offering buyers more choices.
Mortgage rates slowly declining
Despite the recent interest rate cuts by the Fed, mortgage rates are projected to remain slightly elevated in the near term. However, it’s expected the long-run trend in rates to continue downward as inflation pressures continue to ease.
Improved affordability and increased demand will see a positive impact on the high inventory predicted across the state, potentially opening up new opportunities for construction and development projects.
Could Miami's bubble burst?
As we stated earlier, Miami again saw promising growth throughout 2024 despite new market challenges. However, some experts say Miami faces significant crash risk. In 2024, the city was named as the most overvalued housing market globally, according to USB’s Global Estate Bubble Index, with home prices in Miami having increased 50% since 2019, despite recent cooling trends across the state.
While Miami’s growth is often driven by foreign investors and wealthy buyers looking for luxury properties, some investors are flagging Miami’s imbalance of housing price and income growth as a signal to a precarious situation, suggesting potential for significant market correction in the next year.
Increased housing supply, rising insurance costs and environmental concerns also top the list of factors that could pose implications for current homeowners, sellers and potential buyers.
Looking forward...
Florida’s housing market in 2024 has been a year of contrasts, marked by rising inventory, regional variations, and external challenges like natural disasters and surging insurance costs. While some areas like Miami thrived, others struggled to cope with evolving market pressures.
But, when we look ahead to Florida’s housing market in 2025, it seems poised for stabilization. The continued interplay of economic, environmental, and demographic factors will shape its future - bringing with it greater opportunities for house builders and brokers in the Sunshine State.
Staying informed and adaptable will be essential for buyers, sellers and investors who are looking to thrive in Florida's ever-evolving real estate market. If you’re ready to stay ahead of the competition in 2025, click below to speak to one of our experts to see how LandTech can help.
