Florida Home Sellers Slashing Prices as Market Cools

A few sellers in Southwest Florida are dropping prices to lows not experienced in over a decade, says Florida Gulf Coast University professor of real estate Shelton Weeks. He compared the times to the aftermath of the 2008 financial crisis, when house prices were discounted deeply.

During the pandemic, Florida’s housing market boomed as people from other states moved there for good weather, lower taxes, and lower-priced homes. Florida built more houses than any state to satisfy demand, but now that working from home is declining and the pandemic is no longer ongoing, fewer people are moving, and houses are now in surplus.

In contrast, many Florida residents are also shouldering added costs, including homeowners association (HOA) charges, insurance premiums, and the heightened risk of hurricanes and other natural catastrophes. Therefore, supply for sale of houses has seen record highs. According to Redfin, there were 222,927 houses available for purchase in February—a little more than 18% greater than previous year. But with mortgage rates still in the 6% to 7% range, buyers are waiting, and home sales are slowing.

The trend is especially noticeable in Southwest Florida, where sellers are lowering prices to attract buyers.

Tampa: 32.3% of homes saw price cuts in February, though the median home price still rose 5.4% to $450,500.

Cape Coral: Almost half (44.9%) of homes saw price cuts, with the median price dropping 2.5% to $390,000.

Fort Myers: Home sales fell by nearly 25%, and 41.5% of listings cut prices. The median price fell to $382,500.

Naples: While the sales fell by 7.8% and 38.7% of listings cut prices, the median home price increased 43% to $1.2 million.

Punta Gorda: Home sales improved by just 1.7%, but prices fell significantly—by 35.7% to $360,000.

With so much inventory on the market, Florida is presently a buyer’s market, and buyers are able to take the upper hand in negotiations. Nevertheless, tight mortgage rates and high house prices still keep many consumers on the sidelines, forcing sellers to reduce their asking prices.

To entice purchasers, several Florida builders are currently providing unique incentives. Real estate expert Nick Gerli even cautioned that the market is beginning to look like 2008, at least for builders who are having a hard time selling their inventory.

By Editor-in-Chief, Timothy Gocklin, MBA, MSF