Florida housing market faces slowdown amid rising inventory and extreme weather impacts

The Florida real estate market is experiencing a slowdown, according to the December 2024 Monthly Housing Report by Realtor.com. The report indicates that homes in Florida are spending more time on the market, with the average home taking 70 days to sell in December—nine days longer than the previous year and eight days more than the month before.

Realtor.com identified New Smyrna Beach, Palm Coast, Panama City, and Gainesville as cities with significant inventory sitting for over 90 days. Hannah Jones, a senior economic research analyst at Realtor.com, noted that "the housing market tends to slow seasonally in the winter," but this year has seen an unusual increase in inventory and slower market pace, particularly in warm regions like Florida.

The increase in housing inventory is partly due to new construction projects initiated during the pandemic when demand was high. Home Builders Weekly reported a 10% rise in new-construction permits across Florida in 2024.

Higher interest rates have also contributed to buyer hesitancy. With many existing mortgages locked at rates below current levels of around 7%, potential buyers are less inclined to move or purchase new homes. A significant portion of mortgages remains below a 6% interest rate.

Extreme weather events have further complicated matters. Hurricanes Milton, Helene, and Debby caused substantial damage last year, affecting property values and insurance costs. Tony Barrett from the Realtor Association of Sarasota and Manatee remarked that these storms "spooked potential buyers," impacting transactions and confidence.

Florida's homeowners face rising insurance costs as well. Bankrate reports that while the national average annual cost for homeowners insurance is $2,300 for $300,000 coverage, Floridians pay an average of $5,527 annually—more than double the national rate.