A real estate expert has warned Florida homebuyers to be careful as the state’s housing market undergoes changes.
The state remains one of the country’s toughest housing markets as buyers deal with sky-high interest rates and demand. However, real estate expert Nick Gerli is cautioning buyers that the market could look very different in the last half of 2024. He is the CEO of housing market data platform Reventure App.
Inventory in Florida now is at its highest level in at least seven years, Gerli wrote on X (formerly Twitter), based on Reventure’s data. There were 141,000 active listings in July, a whopping 70 percent boost from last year. The listings were up 276 percent from the pandemic’s low.
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“These type of inventory gains are huge and suggest big downward price pressure in H2 2024,” Gerli continued on X. “Be careful if you’re buying in Florida.”
Some regions of Florida saw more significant inventory increases than others. The Tampa metro area grew 94 percent year over year, with Orlando, Jacksonville and Miami not far behind, ranging from 72 to 79 percent increases.
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“The more that inventory piles up in a short span of time, the bigger the potential for price drops,” Gerli said.
The year-over-year drop in list prices in Central to West Florida ranged from 2 to 9 percent, which Gerli called “progress, but nothing monumental.”
But in Miami, which has been one of the most competitive housing markets in recent years, list prices dropped the most, by 11 percent.
Gerli said several factors make it more likely that inventory will rise, from the massive home-building pipeline that popped up in the state to skyrocketing insurance premiums and homeowner association fees forcing owners to sell.
“I also think there’s likely to be stagnating demand in Florida for the next several years due to the ‘pull-forward’ effect during the pandemic. Meaning – the pandemic accelerated the purchase decisions of many households in Florida,” Gerli wrote on X.
“Maybe some people who would have eventually bought in 2024 or 2025 actually bought in 2021-22 because pandemic motivated them to do it. The result now is a demand vacuum where we are likely to see fewer buyers for the next several years from a structural stand point,” he wrote.
While Gerli acknowledged that list prices have come down only moderately and still have a “long way to go” before buyers feel the market is affordable, the current inventory could indicate major changes are on the horizon.
Alex Beene, a consumer literacy instructor at the University of Tennessee at Martin, told Newsweek: “Housing markets throughout the United States have dealt with more difficulties for sellers in the form of higher prices and interest rates keeping buyers away, but Florida has been hit especially hard because of dramatically rising insurance prices, as well.
“There’s also the reality we’re no longer in the pandemic era, and the appeal of moving to Florida to avoid a state with stronger restrictions is no longer there. It’s the perfect storm of problems to create more inventory and potential long-term issues for Florida’s housing market,” Beene said.
Beene said sellers should not panic, though.
“Despite these issues, there are still plenty of buyers,” he said. “So much of housing sales in general will hinge on the Fed’s coming decisions on interest rates. If you can afford to hold on a tad longer, wait for interest rates to lower to make a potential home sale easier.”
Michael Ryan, a Florida-based finance expert and founder of MichaelRyanMoney.com, said the surge in inventory is likely not just a blip on the radar.
“It has all the makings of a seismic shift, which could reshape the real estate market landscape,” Ryan told Newsweek. “As usual, developers got a bit too excited during the boom. They are literally building an entire city west of West Palm Beach of 5,000 homes.”
With more inventory, prices are likely to get squeezed and course-correct from the extreme highs sustained during the pandemic.
“During the pandemic, we saw a Florida gold rush,” Ryan said. “Everyone and their cousin wanted a piece of the Sunshine State. But now? That well might be running dry.”
In the short term, this could mean a market recalibration, but Ryan is hesitant to say the lower prices will continue long term.
“Prices might wobble, but Florida’s fundamental appeal hasn’t changed,” he said. “Sunshine, no state income tax—these aren’t going away.”
