Where Housing Prices Are Falling in Florida: Summer 2023 Update

Looking for some prime Florida real estate to be your next home? In a big state with coastline with miles, a huge retirement community, and a vacation submarket, there’s more complexity to the state’s housing prices than you might imagine. To find a bargain, you’ll have to dive deep into Florida’s regions and see where housing prices are heading within those markets.

We took a closer look at Florida’s housing numbers as of late to see if housing prices are dropping. And if so, where can home buyers find deals in this popular state? 

The big picture on Florida housing prices

Based on the latest available data on Florida’s housing market–May 2023–the median sales price of homes was running about $407,200, which was a small dip of -0.4% compared to the previous year.

What saw an even steeper dip should come as no surprise to anyone who’s been watching the national housing markets. Total home sales are down statewide. In May 2023, about 38,000 homes sold in Florida, a dropoff of 11% in the year-over-year numbers. That’s not too shocking, given that mortgage rates have been up, which is keeping people with existing, cheaper mortgages in their homes. 

Another number in line with the slowing sales pace: the median days for a home to be on the market almost doubled the year-over-year to 42 days.

So there are fewer home sales in Florida but it’s also taking longer to sell a home in the state. But with homes approximately the same price statewide in May 2023 as they were in May 2022, this signals affordability has been an issue.

According to Florida Realtors, a few of the state’s metro areas had some of the highest overall price increases in the country. At the end of 2022, for example, Florida’s FHFA housing price index had risen 8.4%. In fact, of the top 10 metros ranked in the research, six were located in Florida. And none of the state’s major metropolitan areas came in lower than a ranking of 31.

That makes finding bargains more difficult in Florida than in other states, but you can find places with dropping home prices.

Florida cities where home prices are falling

There is hope that home prices are dropping, but buyer beware: so far, housing markets in Florida where prices are trending down tend to have price drops of less than five percent.

Dade City

According to Upnest, Dade City is one of the most affordable places to live in Florida with a median home price of $122,600. That may be due to a low median income—about $29,000. Still, the suburban Tampa metro town could be an option for people who want airport and job access but not the higher prices associated with a bigger city. The close proximity to Orlando is another major attraction here. 

Jacksonville

To be clear, the overall trend in Jacksonville has been up in recent years, as it’s one of Florida’s more affordable coastal cities. However, any dip (especially in Florida) is something that home buyers could potentially find interesting. And a home price drop in the Jacksonville area, even if it’s a meager 1.8% quarter-to-quarter dip, according to the FHFA, represents potential for home buyers.

St. Petersburg-Clearwater

It may not be too surprising to see another metropolitan area appear on it, too. But like Jacksonville, this one comes with a caveat. The area had been up 15+% year-over-year, according to FHFA data, before a tiny 0.1% quarter-to-quarter dip. This makes for a tricky situation: is now the time to jump on what may be a slow down in this Gulf Coast metro area? St. Petersburg was down 1.3% YOY while Clearwater was down 2.8% after a peak in April 2023.

Pensacola

This waterfront city in the Florida Panhandle has seen its housing prices dip and fall over the last few months, but when you zoom out you’ll see overall they are stable. That hints with some patience, you could find a great deal. May 2023’s year-over-year prices were down 3.4%.

Cape Coral

Part of the state still recovering from 2022’s devastating Hurricane Ian, which made landfall nearby at Sanibel Island and Fort Myers, Cape Coral’s May 2023 housing prices were down 5.3% year-over-year. That’s interesting because the May 2022 market was pre-hurricane, and you’d expect even fewer homes on the market due to restricted supply.

Avoiding the overpriced Florida Home Markets

It’s not enough to know where the home prices are low. It also helps to avoid where the homes are overpriced, at least according to one source. The ten most overpriced Florida metro regions:

1. Homosassa Springs
2. Palm Bay-Melbourne-Titusville
3. Punta Gorda
4. Vero Beach-Sebastian
5. Port St. Lucie
6. Crestview-Fort Walton Beach-Destin
7. Cape Coral-Fort Myers
8. Miami-Miami Beach-Kendall Metropolitan Division
9. Naples-Immokalee-Marco Island
10. North Port-Sarasota–Bradenton

Florida Atlantic University agrees many of Florida’s markets are overpriced, which means they are poised for price corrections–aka falling home prices– in the near future. It pointed out Tampa, Cape Coral, and North Port-Bradenton as markets with significant pricing gains that may be overvalued. 

You’ll notice all these regions lie near or on the coasts. That’s not surprising, given how home prices near coastlines tend to be much higher than they are in the interior, as waterfront living is in high demand. It’s part of what makes living in Florida so attractive.

The opportunities may be few and far between when looking for dipping home prices in Florida, but that isn’t to say that every home is going to represent its larger metropolitan market. With this data as a guide, you can probably identify some rare opportunities to acquire real estate in Florida that isn’t seeing red-hot price increases.