The Florida real estate market has shown resilience in recent years, but as we enter 2025, several indicators suggest a shift may be underway. With rising inventory levels, increasing time on the market, and a slowdown in sales, Florida may be poised for modest declines in housing prices this year. While the market isn’t expected to crash, homebuyers may finally see some relief as prices stabilize or slightly decrease.
Rising Inventory Points to a More Balanced Market
One of the most significant shifts in Florida’s housing market is the substantial increase in inventory. At the end of 2024, there were 98,429 active listings, a 27% increase from the previous year. Additionally, the months’ supply of inventory rose to 4.7 months, a 30.6% jump compared to 2023. This trend suggests that buyers now have more options, which reduces the urgency to bid aggressively over asking prices. When inventory increases at this pace, price growth typically slows, and in some cases, modest declines can occur.
Homes Are Taking Longer to Sell
Another critical factor impacting prices is the increasing time homes spend on the market. In 2024, the median time to contract extended to 44 days, up from 32 days in 2023, marking a 37.5% increase. Likewise, the median time to sale rose to 75 days, compared to 65 days in the previous year. When homes stay on the market longer, sellers often become more willing to negotiate on price, leading to downward pressure on housing costs.
Declining Demand and Cash Sales
While overall demand for housing remains steady, cash transactions have decreased. In 2024, cash sales accounted for 28.3% of all closed sales, down from 29.6% the previous year. A 6.3% year-over-year decline suggests that investors and wealthier buyers, who often fuel price growth, are becoming more cautious. This could signal a broader cooling in the market, further reinforcing the potential for price reductions in 2025.
A Modest Decline, Not a Crash
Despite these indicators, Florida is unlikely to experience a significant housing crash. The median sale price for single-family homes in 2024 increased by 2.4%, reaching $420,000. While price appreciation is slowing, and declines may occur in specific markets, factors such as continued population growth and Florida’s tax-friendly policies will help prevent steep drops in home values.
Some markets, such as Tampa, have already started seeing slight price declines, with a 0.4% dip in late 2024. If this trend continues, we may see further modest decreases in 2025, particularly in areas with an oversupply of homes.
The Bottom Line: Expect a Slight Price Correction
With rising inventory, longer selling times, and declining cash sales, Florida's housing market will likely see modest price drops in 2025. However, a full-blown collapse is unlikely due to continued demand and economic stability in key markets. Buyers may finally gain more negotiating power, and sellers should prepare for more competition and realistic pricing expectations.
If you’re looking to buy a home in Florida, 2025 may be the year when the market shifts in your favor. For sellers, strategic pricing and flexibility will be key in navigating the changing market landscape.
Frequently Asked Questions About How the Florida Real Estate Market Changed in 2024:
What was the total number of closed sales in Florida for 2024?
In 2024, 252,688 closed sales of single-family homes in Florida were recorded, a 1.9% decrease from 2023.
How did the median sale price change in 2024?
The median sale price increased by 2.4%, reaching $420,000 in 2024.
What percentage of homes were paid for in cash in 2024?
Cash sales accounted for 28.3% of all closed sales in 2024, down from 29.6% in 2023.
How did the inventory of active listings change in 2024?
Active listings increased by 27%, totaling 98,429 properties at the end of 2024.
What is the 'months' supply of inventory,' and how did it change?
The months' supply of inventory rose to 4.7 months in 2024, a 30.6% increase from the previous year. This metric estimates how long the current inventory would last at the current sales pace.
How long did homes typically take to go under contract in 2024?
The median time to contract was 44 days in 2024, up from 32 days in 2023.
What was the median time to sale in 2024?
The median time to sale increased to 75 days in 2024, compared to 65 days in 2023.
How many new listings were there in 2024?
There were 360,110 new listings in 2024.
What were the new pending sales figures for 2024?
New pending sales totaled 267,178 in 2024, a slight decrease of 1% from 2023.
How did the average sale price change in 2024?
The average sale price increased by 4.5%, reaching $599,785 in 2024.
What was the total dollar volume of sales in 2024?
The total dollar volume of sales was $151.6 billion in 2024, a 2.5% increase from 2023.
What percentage of the original list price did sellers receive on average in 2024?
Sellers received a median of 96.2% of their original list price in 2024, a slight decrease from 96.9% in 2023.
How did foreclosure/REO sales perform in 2024?
Foreclosure/REO sales increased by 28.1%, with a median sale price of $290,500.
What was the trend in short sales for 2024?
Short sales rose by 21.1%, with a median sale price of $345,000.
How did the market perform regarding new listings compared to previous years?
New listings in 2024 increased by 9.5% compared to 2023, indicating a rise in seller activity.
What was the trend in pending inventory at the end of 2024?
Pending inventory stood at 20,758 at the end of 2024, reflecting market dynamics in transaction processes.
How did the percentage of cash sales change over recent years?
The percentage of cash sales decreased from 32% in 2021 to 28.3% in 2024, indicating a shift in buyer financing methods.
What was the trend in the median percent of original list price received over recent years?
This metric decreased slightly from 96.9% in 2023 to 96.2% in 2024, suggesting minor changes in negotiation dynamics.
How did the months' supply of inventory in 2024 compare to a balanced market?
A balanced market typically has a 5.5-month supply. In 2024, the supply was 4.7 months, indicating a slight tilt towards a seller's market, though moving towards balance.
What factors contributed to the increase in inventory during 2024?
The rise in inventory was due to an increase in new listings and a slowdown in sales, leading to more available properties on the market.