Florida’s Housing Market Faces Highest Correction Risks


Last updated: July 7, 2024

house_in_floridaFifteen U.S. housing markets are most at risk of correction, and Florida dominates the list, according to Parcl Labs.

  • Crestview-Fort Walton Beach-Destin, Florida
  • Daphne-Fairhope-Foley, Alabama
  • Deltona-Daytona Beach-Ormond Beach, Florida
  • Gainesville, Florida
  • Homosassa Springs, Florida
  • Lakeland-Winter Haven, Florida
  • Miami-Fort Lauderdale-Pompano Beach, Florida
  • Myrtle Beach-Conway-North Myrtle Beach, South Carolina
  • Naples-Marco Island, Florida
  • Ocala, Florida
  • Orlando-Kissimmee-Sanford, Florida
  • Palm Bay-Melbourne-Titusville, Florida
  • Port St. Lucie, Florida
  • Sebastian-Vero Beach, Florida
  • Tampa-St. Petersburg-Clearwater, Florida

Remarkably, 13 out of these 15 markets are in Florida. The state has seen its housing inventory surge at an “accelerated” rate over the past year.

Part of this spike is attributed to Hurricane Ian, which hit Florida’s Gulf Coast in September 2022.

Initially, the hurricane caused a supply crunch, but this was soon countered by a flood of new listings.

Florida also grapples with skyrocketing home insurance premiums, compounding affordability issues. Rising insurance costs are blamed on weather disasters, increased re-insurance rates, and inflated costs of building materials.

Adding to the pressure, many insurance companies are either hiking their rates or leaving the state altogether.

A new state law, enacted after the Surfside Condo collapse in 2021, has intensified challenges for older condos along the Florida coast.

The law mandates inspections for all buildings three stories or higher. If structural issues are found, a structural integrity reserve study is required.

“This emerging weakness in prices, particularly in high-performing markets like Tampa and Miami, could signal the early stages of a market correction in the region,” said Jason Lewris, co-founder of Parcl Labs.

The nationwide affordability crisis is driven by multiple factors. Years of underbuilding led to a housing shortage, worsened by rising mortgage rates and costly construction materials.

Higher mortgage rates over the past three years have created a “golden handcuff” effect. Homeowners with locked-in low mortgage rates from the pandemic are hesitant to sell, further restricting supply.

Economists forecast that mortgage rates will stay high through most of 2024, only dropping when the Federal Reserve cuts rates. Even then, rates are unlikely to return to pandemic-era lows.

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About The Author

Co-Founder & Chief Editor
Jon Morgan, MBA, LLM, has over ten years of experience growing startups and currently serves as CEO and Editor-in-Chief of Venture Smarter. Educated at UC Davis and Harvard, he offers deeply informed guidance. Beyond work, he enjoys spending time with family, his poodle Sophie, and learning Spanish.
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LJ Viveros has 40 years of experience in founding and scaling businesses, including a significant sale to Logitech. He has led Market Solutions LLC since 1999, focusing on strategic transitions for global brands. A graduate of Saint Mary’s College in Communications, LJ is also a distinguished Matsushita Executive alumnus.
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