Florida's Top 3 Cities on the Brink of a Housing Market Crash

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As unused stock accumulates throughout the state, According to a recent study by information services provider CoreLogic, three metropolitan areas in Florida are currently at a high risk of experiencing a housing market downturn this year.

According to estimates from researchers within the organization, using figures from January, Winter Haven, Tampa, and West Palm Beach in Florida stand out as three of the top five U.S. markets to monitor in 2025 due to their substantial likelihood—more than a 70% probability—to experience decreases in prices.

gudangmovies21 reached out to CoreLogic via email for their input on Wednesday.

Why It Matters

Following years of growth, the Florida real estate market is currently facing a downturn. The arrival of new residents from other states has significantly decreased since the pandemic began, and high costs continue to be a barrier for potential homebuyers seeking to achieve their dream of owning property here.

Even though an increased number of houses being listed for sale in Florida provides buyers with greater choices, persistently elevated mortgage rates continue to make purchasing a home difficult, if not unattainable, for numerous potential buyers. Consequently, properties staying on the market for extended durations before receiving offers has become more common in the state. pushing sellers to provide perks and cut prices to lure purchasers.

What To Know

According to researchers from CoreLogic, Winter Haven in Florida, Phoenix in Arizona, Tampa in Florida, Tucson in Arizona, and West Palm Beach in Florida have been recognized as the U.S. markets most likely to experience property value decreases this year.

Although the firm didn't specify the reasons behind these being the most susceptible markets, several comparable trends are emerging particularly within those located in Florida.

According to CoreLogic data, Tampa, which was once a bustling pandemic hotspot, saw a year-over-year decrease in home prices by 0.9 percent in January and witnessed a fall of 1.6 percent from October 2024 through January.

Over recent years, the city experienced a surge in new building initiatives; however, it currently grapples with reduced demand relative to its peak times. This decline can be attributed partly to decreased migration into the area and partly to escalating HOA dues, steep property insurance rates, and mounting risks associated with natural calamities, all of which diminish prospective homebuyers’ financial capacity.

Winter Haven, which shares ties with both the Orlando and Tampa metropolitan regions, saw a decrease of 0.9 percent compared to the previous year and dropped by 1.2 percent from October 2024 to January. Similar to what happened in Tampa, Winter Haven witnessed significant growth during the pandemic, leading to an abrupt rise in housing prices previously considered quite reasonable. Recent figures indicate that this overexcited market may be stabilizing now.

Ultimately, the upscale real estate market in West Palm Beach saw a 0.5 percent decrease in prices compared to the previous year and a drop of 1.2 percent from October 2024 through January, as stated by CoreLogic. Given the area’s significant vulnerability to natural calamities along the Florida coastline, it's likely that elevated property insurance expenses may be hindering the market's progress.

Given these circumstances, CoreLogic analysts believe that these three cities have a significantly high chance of experiencing a housing market downturn—characterized by a surplus of properties causing home values to drop sharply.

What People Are Saying

Selma Hepp, who leads as the Chief Economist at CoreLogic, stated in an official release: The recent stabilization in home prices over the past six months indicates that we may see even slower price decreases moving forward. Additionally, the narrowed fluctuations from month to month underscore the ongoing weak demand for homes, which is a defining feature of today’s real estate market.

She stated, “Although this year’s severe winter and significant natural calamities have contributed to reduced demand, declining consumer confidence indicates that prospective home buyers are uncertain about the near-term economic climate and impending inflation. Nonetheless, as we approach the spring home buying season, recent declines in mortgage rates might encourage these potential purchasers to return to the market.”

What's Next

The CoreLogic economists believe that the pace of price increases will keep decelerating across Florida for the entirety of 2025. However, they suggest that more favorable mortgage rates might motivate potential purchasers to enter the market this coming spring.

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