Florida Housing Markets in Peril: Possible Collapse Worse Than Cape Coral's
Florida Housing Market Shows Signs of Cooling, with Sarasota and Central Florida Leading the Trend
As of May 2025, several Florida housing markets are experiencing a shift, with some areas showing more significant signs of market cooling or price depreciation than Cape Coral.
The markets with the sharpest downturns include Sarasota and parts of Central Florida, where inventory levels are near 15-year highs and median home prices have dropped about 2%–3% or more compared to 2024.
Sarasota is specifically noted for more dramatic price declines and increased price reductions, making it softer than Cape Coral's market in price depreciation terms. Central Florida overall faces rising inventory and a buyer-favored market with longer selling times and more concessions, reflecting more significant softening than Cape Coral's market.
Cape Coral is cooling but less severely. Although it is mentioned as one of the worst markets nationally in a Wall Street Journal article, other Florida markets are experiencing sharper corrections in price and sales volume.
The Space Coast area (Cocoa Beach, Viera, Melbourne) shows a slight dip in sales (~1.4%) but prices holding firm around $375,000, indicating a more balanced or stable market compared to Cape Coral's notable cooling.
Areas with a higher concentration of luxury homes, like Naples, are often the first to feel the effects of economic shifts. The Naples-Immokalee-Marco Island MSA is currently experiencing a greater downturn than Cape Coral, with a 19.2% decrease in median sale price year-over-year.
The North Port-Sarasota-Bradenton MSA, which saw massive appreciation during the pandemic, is now finding its new equilibrium with higher interest rates and increased inventory. In May 2025, the North Port-Sarasota-Bradenton MSA had a more challenging environment for sellers compared to Cape Coral, with a 4.7% decrease in closed sales and a 9.9% decrease in median sale price year-over-year.
Punta Gorda MSA is experiencing a larger price erosion than Cape Coral, with a 14.5% decrease in median sale price year-over-year. The markets recovering from Hurricane Ian are still finding their footing, and insurance costs and buyer perceptions can shift in these areas.
Inventory ratios play a role in market softening, and Florida's inventory levels for single-family homes and condo-townhouses are back to pre-2020 levels. In May 2025, closed sales for single-family homes statewide decreased by 5.7%, totaling 24,756. The median sale price for single-family homes in Florida was $415,000, a 2.7% drop from a year ago.
Dr. Brad O'Connor, the Chief Economist for Florida Realtors, stated that this is the third month in a row of year-over-year price drops statewide for single-family homes. The condo and townhouse market statewide is experiencing even more pronounced price erosion, with average median prices for these units being down 6.1% year-over-year.
Florida's housing market is finding its balance, and this is good for both buyers and sellers alike. The market's cooling trend is expected to continue as the economy adjusts to higher interest rates and inflation. However, the Florida housing market remains a popular destination for retirees and those seeking a warmer climate, ensuring continued demand for homes in the Sunshine State.
[1] Florida Realtors [2] Wall Street Journal [3] Tampa Bay Times [4] Miami Herald [5] Orlando Sentinel
- The news of the cooling Florida housing market, particularly in Sarasota and Central Florida, has become a topic of concern for investors looking at their portfolios.
- As income tax and interest rates rise, finance experts are closely watching the real estate industry, assessing the potential impact on the growth of investments in Florida.
- Following the sharp downturns in Sarasota and Central Florida, real estate news outlets like the Wall Street Journal and Tampa Bay Times have reported on the slower sales and price depreciation in the Florida market.
- Facing increased competition and price reductions, real estate agents in the North Port-Sarasota-Bradenton MSA might need to adjust their investment strategies to accommodate the more challenging market conditions.
- The cooling trend in the Florida housing market is expected to continue, making it important for investors to consider the current state of individual cities and regions within the state when investing in real-estate.
