The Florida real estate market has undergone a dramatic shift since the pandemic-fueled boom of 2020–2022.
Back then, it seemed like everyone was heading south, driving up demand – and prices – with lightning speed. But this year, a different picture is emerging. What changed? A complex combination of factors is flipping the script, softening demand, boosting inventory, and bringing the Florida real estate market closer to balance. In some regions it’s even tipping it in favor of buyers.
One of the biggest changes is the slowdown in migration. During the pandemic, Florida became one of the top destinations for people relocating from other parts of the U.S., especially high earners from the Northeast and West Coast. But that surge has since fizzled.
In 2022, Florida saw net domestic migration of over 300,000 people. In 2024, that number dropped to around 64,000. With fewer deep-pocketed newcomers bidding up home prices, local incomes are now playing a bigger role in setting market dynamics – and that has put a lid on how high prices can go.
The Florida Real Estate Market and Surfside
Then there’s the aftermath of the tragic Surfside condo collapse in 2021. In response to the disaster, Florida passed new laws requiring stricter structural inspections and an increase in reserve funding for repairs. As a result, many older coastal condo buildings – especially in the South Florida real estate market – are now facing huge HOA special assessments and steep monthly fee hikes. This has made many units more expensive to own, dampening demand and putting pressure on prices in the condo sector.
In the Southwest Florida real estate market, the long shadow of Hurricane Ian still looms large. The storm devastated areas like Cape Coral and Punta Gorda in 2022, damaging thousands of homes. With so many properties in need of repair and renovation, inventory is surging. At the same time, high prices, elevated mortgage rates, spiking insurance premiums, and rising HOA costs have all contributed to a pullback in demand. Together, these factors are causing a noticeable market softening in that region.
Another key piece of the puzzle is Florida’s high supply elasticity. Unlike states in the Northeast or Midwest, Florida has more room to build – and builders have been doing just that. New construction, especially in the form of multifamily housing, is increasing supply to the Florida real estate market. In this affordability-strained environment, many builders are offering incentives like mortgage rate buy-downs to attract buyers, pulling potential demand away from the resale market. This has caused a buildup of unsold existing homes, making Florida one of the few places in the country where inventory has now surpassed pre-pandemic 2019 levels.
Homeowners Insurance and the Florida Real Estate Market
Lastly, let’s talk insurance. It’s an often overlooked, but important part of housing affordability. While homeowners across the U.S. have seen insurance costs rise, Florida residents have been hit especially hard. Between inflation in construction costs and increasing hurricane-related risks, premiums are soaring. The result: insurance expenses are now a major burden for many Florida homeowners, compounding affordability issues that were already worsened by the pandemic housing price run-up.
In short, the Florida real estate market is changing because the conditions that drove the boom no longer exist. Migration is slowing, costs have risen across the board, and more homes are hitting the market. For buyers, this shift may present new opportunities – particularly in areas where inventory is growing and sellers are more open to negotiation.
But for sellers and investors, it’s a reminder that Florida real estate market is never static, and isn’t immune to broader economic and structural shifts.
Knowing this, there are places where you may still want to consider, like Delray Beach. Delray remains a hot spot due to its thriving local economy, city awards, and a place where folks love to be. So if the Florida real estate market is still a place you’re considering, get a glimpse at what makes Delray special, here.
