Florida Housing Market: Insights for Buyers and Sellers

Florida Real Estate: Major Market Shifts You Need to Know

December 19, 2024

Key Points:

• Affordability Returns: Markets like Tampa and Jacksonville show early signs of price drops, with Tampa down 1% year-over-year.
• Market Neutrality: Zillow’s Heat Index shows four consecutive neutral periods—a shift from a seller-dominated market.
• Central Florida Insights: Orlando remains stable with no price gains or losses year-over-year, while Miami’s trend is weakening.
• Buyers’ Edge Expands: Buyers in markets like New Orleans, Miami, and Tampa now enjoy greater leverage in negotiations.
• Sellers’ Challenges: With rising inventory expected in 2025, sellers must adjust pricing strategies to attract buyers.

The Central Florida Housing Market Is Shifting

Real estate renegades, welcome back. There are changes, massive changes unfolding in the central Florida housing market and in the state of Florida at large. Changes that are now catching the attention of some of the largest real estate aggregators in the country.

Long gone are the days where buyers, even buyers in the lower and middle-class price ranges, those areas that are highly contentious, not just from purchasers looking to buy their first home, but also investors looking to snag a well-priced home and an inventory that can go up well into the millions of dollars.

This particular marketplace that we see today is now striking a new tune, that affordability at last is returning to the housing market. Just the early signs, I know what you’re saying.

Affordability: Returning to Florida’s Housing Market

Jared, it’s ridiculously expensive. It’s happening and it’s starting here in Florida, particularly here in central Florida. Today, I’m going to tell you if you’re looking to buy, how to do it in a wise way, considering what’s going to happen under a Trump administration in the next three to four years, as well as what you home sellers can expect to do to make sure you’re ahead of these changes, to make sure you are the preference to buyers who now, as we see, have far more choices than they’ve ever had in six or seven years.

Meaning that if you’re out there in the market and you’re looking to buy a home, you’re going to get some meaty concessions. I’m going to show you the data. I’m going to give you some exact scenarios and some things to think about no matter which side of this fence you’re on, so that you can make great decisions here in the winter of 2024 and also the spring and summer cycle of 2025.
Let’s get into it.

The Market Shift: What Economists Are Saying

Now, the reason I want to cover this is that there have been a multitude of stories from economists in the last week, week and a half, talking about the glaring shift in the market, how there’s a massive shift in affordability in specific pockets. I’m going to show you today exactly where those changes are happening.

Take a look at this particular headline that just broke a couple of days ago. It says, competition for homes is easing fastest in Florida and Texas. Now, Zillow found that research when they came into this most recent market data report that they brought to the market, which is buyers market spreads from the South as inventory recovers October 24th.

Zillow’s Heat Index and Buyer Leverage

Now, take a look at these changes they point out. The top of the headline says home buyers are gaining leverage in negotiations across the US as competition over homes eased in October. Zillow’s heat index market shows competition nationwide remains neutral.

Now, remember when they’re talking about the housing market, they’re trying to help you understand that there’s times when sellers have control. They demand what a buyer will pay. They are the ones setting the standard for the game based on how many of them there are to choose from.

Now, if that market shifts and there’s lots and lots of sellers, then buyers will then gain control. If there’s fewer buyers and many sellers competing for a smaller pool buyers, you probably get that notion. But as we look at data and we look at each market, every market is different.

You can’t just hear a headline and run out and try to lowball every seller in a specific market where it might be hot. You have to do very neighborhood-by-neighborhood or community-by-community research. Look at what they’re saying on the index though, because this is a change in narrative that we’re seeing in the news.

Zillow’s heat index for the United States is actually dropped neutral for four periods straight. Look at this. Now you understand who’s giving us this data.

This is Zillow who has a team of economists and they are more to be positive on the market. Zillow is a hype machine. They sell internet leads. They want a lot of buyer activity. They want a lot of buyer positivity. So for them to say, okay, this is their voice saying, we are now seeing a neg or a neutral.

I’m saying I said negative, but it’s now neutral what they’re calling it. They’re not saying it’s a strong buyers’ market yet. Okay. They’re not saying that buyers have massive control. They’re saying they just call it neutral.

The Shift in Market Trends Over Time

Understand when it’s gray, it means that some places around the U.S. have buyers who can ask for anything, and the sellers will probably do it.
There are places where there’s a lot of competition, but this is an interesting narrative because look at how in the past, the trend—look at the trend.

So here we are going at the end of 2023, there was one period of neutrality. Look at this. When we had the first time in interest rates were raised by the Fed and all of a sudden it shocked the market because right here, interest rates were like 3%.

Then they jacked them up to overnight, 7%. Interest rates freaked everybody out, and the market went to two periods. But look where it is now.

So now we’re now bottoming towards one of the lowest periods on record for a seven-year run.
Cause this chart goes all the way back to 2018. You can see, and again, it needs two or three more periods of kind of a decline, but you can clearly see what’s happening.

The Role of Supply and Demand

We have a winter season where they’re going to report three or four more months.
And depending on how much buyers pull back, because you’re going to see in a second, why is this changing?
Is it because there’s so many sellers that are just pushing houses and it’s full desperation, or is it just a normal amount of sellers or even a low, still anemic amount of supply—very few choices—yet buyers are so iced out?

They’re just not doing it. We’re going to kind of look into that, but let’s understand what’s happening in the market right now.

Look at this Zillow’s latest market shows that Pittsburgh and Louisville joined 11 other metros where buyers have an edge over seller negotiations in October.

Now, again, I know we’re most likely you’re watching this in the winter or maybe even early 2025. Understand this is the most recent data and this is a clear picture of where we are right now.

Look at how the most buyer-strong markets—meaning there’s a fewer number of buyers that the sellers are having to capitulate more.
Look where it’s coming from. It’s almost like it’s spreading from the South, but that’s not a full, complete story.

Most of it is down here across the bottom, lower half of the U.S., which we call the Sunbelt States.

All of these grays, these grays that you see in Seattle, Portland, Denver, Salt Lake, Phoenix. There’s a market over here in California, which I’m not sure which one is not labeled, but these in the gray or the blue is there’s going to be some buyer strength in any of those, even in the gray.

Hey, it’s me interrupting myself. Are you selling or buying? One call, that’s all you need.
Put nearly 4,000 home sales and 23 years of experience to work for you every single month.

But obviously, this tells us who the weakest markets in the country are. It’s Austin (-1), Tampa (-7.7), San Antonio (-0.7), Dallas (-7.7), and Atlanta (-0.7).

This is year over year. This is even more eye-opening. This again is like, hey, where’s the price loss really going towards the buyer.

You can see that home values a year over year—that means a cumulative of 12 months. This isn’t just a one-month change.

Like we just saw that Tampa is (-1), Jacksonville is (0.4). Again, this is early. This is early trends.

You have to understand when you see this, like, “Oh Jared, what give back 1%, it’s no big deal.”
This means because you have to understand some houses in Tampa went up. Okay.
The aggregate of all of them is a negative. Of all of them.

Deep-Dive into Florida Housing Market Dynamics

That means that some of them in these areas where, you know, you have more saturation of listings for sale, they performed worse. So you might have a home in Tampa that sold six, 7% negative against last year.

Those markets exist. Those are things buyers want to be paying attention to. When I shop a buyer in my market, I’m looking at how good is it where you’re buying.

You pick location—location’s the first rule of real estate. But if I’m looking with a buyer, I’m going, how competitive is my market? How much demand really is here?

I’m going to feel how the seller feels. I’m going to help that buyer max out the contributions that they’re going to get from the sale.

As an example, I had a buyer looking in a market. I noticed that we are a strong buyer-favored marketplace, but I went deep in on neighborhood research.

This is a VA buyer. They got an amazing house, over 2,000 square feet, beautiful third-acre lot here in a reasonable drive to downtown Orlando. Nice space and a nice home, around $360,000, which is well below comps.

I got them another nearly $20,000 in give-back cash credits from the seller. When that person closed—when that veteran closed—they weren’t bringing any money to the closing. Okay. They were actually getting money back.

Understanding Zillow’s Heat Index

So those things are happening, and it’s—you’ve got to be wise as a buyer right now because in some markets there is a change.

Look at this heat index. Okay. So the heat index that Zillow runs aggregates things like:

• How long does it take to sell?
• How is price changing? Is it dropping?
• Is there a lot of listings for buyers to choose from?
• Are buyers sitting on the sidelines?

Look at this, the strongest buyers’ markets in the country were New Orleans, Miami, Jacksonville, Memphis, and Tampa.

Florida’s Four Major Markets Compared

Three of the top buyers’ markets that have shifted the most—notice Orlando—you are not. You are the strongest of the big four in Florida, Orlando and Central Florida market.

Look at the larger the circle, the more it swings to the buyer. So Miami’s hurting the most, which is phenomenal. It breaks my mind to see that because Miami was the darling of the entire U.S.

Now, let me show you some overall data and some things to think about as a buyer or seller because you need to navigate this properly.

If you have to sell a home in winter, if you have to sell a home in early 2025, don’t wait. You don’t need to wait.

There’s no guarantee you get more by waiting. There’s a fair assumption in this market like, “Hey, I’m going to get less if I sell now.” None of that is true.

And also for a buyer, your prerequisite decision-making—what you’re entering this process and qualifying as you go in—needs to be slightly different.

Florida Housing Market: A Regional Breakdown

Across the top, I’m going to show you Miami, Orlando, Jacks, and Tampa as a point of comparison. I’m going to show you the Metro area. We’re going to look at their home value index. So what is Zillow aggregating their, their middle-of-the-range, median price for that area? How has it changed year over year for each of these markets? Does the market favor buyer, seller, or remain neutral? Has the inventory before the pandemic?

Okay. So going back to about 2018, 2019, how different is the amount of homes you have to choose from today versus then, and then we’ll kind of move through it. Okay. But look at Miami. So Miami has a $486,000 price point. It is up 2.3. Now that might be like, wow, they’re up 2.3. Yeah. Miami though, led the nation.

Even when the market cooled in 2022 for a lot of Florida, Miami was still pumping six, eight, 10% price year over year. Now they’re nearing zero. Okay. Their trend is dropping. Okay. It’s not that they’re in negative territory. It’s not that you have to be scared or worried, but look at this. The inventory is still below pre-COVID inventory in Miami. While it’s softening, it’s narrowly below and still not where it was pre-pandemic.

Comparing Tampa, Orlando, and Jacksonville

Okay. Now, what does that tell us? It tells us that there’s not a heavy supply yet. The market is softening. It’s not softening with big numbers of listings. Okay. I think you’re going to see most of that through all these markets. Tampa $371,900. It is negative year over year. We reported that earlier by our favorite. Clearly, it’s barely negative. It’s still, look at this.

It’s negative price has a dropping price to most areas of that Metro. And yet they’re just a hair. They’re not elevated at all in supply. Is that interesting? So think what happens. And I believe as we get closer into 2025, all of these markets will have more supply than now. Okay.

So in 2025, you have more sellers in Tampa. You have more sellers in Orlando. You have more sellers in Miami. You have more sellers in Jacksonville, bringing more inventory to the market, not less, more. Okay. So consider that as the future of our market.

Like, and I’m going to tell you, Jared, you think it’s going to crash. Stay tuned. I’m gonna give you some points here in a second. Orlando $393,519, pretty stable. Hasn’t gained a thing in a year. Okay. Not a surprise. It’s nearly dead even to a year ago. And we’re the strongest.

Look at our inventory. Our inventory is dead. 0.3. It’s our inventory is even, our price is even. There’s just a relative tension. I will tell you, and I’ve said this on other updates, there is a lot of sellers. The reason why this is stable and not higher is sellers are quitting. A lot of sellers in different areas fail to sell. They really weren’t interested in selling at what the market might offer them.

So when they come down from their original, like, I’m not going to get that, that my starting price, I’ll come down a little by the time they free, they get the full realization of maybe what they’re getting. And honestly, none of this is, is, um, is none of it’s elusive. It’s not like a seller and an agent, a good agent.

Like when I come down with a seller, I can go, this is a realistic target for the most part. There are some periods in the market, especially in the high, high price ranges, like a million, a million plus, where the actual value or perceived value of what a buyer will pay is a little trickier and requires testing the market, which is going to market, starting here, and making some adjustments as you go.

But most of the time, the seller can kind of have a realistic plan. But do sellers bring homes to the market all the time? With full realism, with a full, “Okay, this is what likely happens?”

Our sellers, we say that we put them mostly in a realistic bucket or an unrealistic bucket. You’re the one shopping in Zillow. You tell me in the comments, are sellers unrealistic these days?

All right. So here we go. Jacksonville, $354,943. It is negative 0.4. It’s buyer-favored. It’s 7.5% above.

So Jacksonville has swung the most in terms of market favorability.

Predictions for Buyers and Sellers

Now I want to give you a full breakdown of what to think as a buyer or seller. As a buyer, here’s what I think will happen based on true data and research because everybody thinks we’re going to have a crash. A lot of people—at least those on YouTube—and I love YouTube, I love re-venture consulting, and I like Nick’s stuff and all these others.

I’m not competing for eyeballs across the country as I make videos. I am looking to talk to Central Florida about what’s happening here. And here’s the likely outcome that I see taking place.

I tell this to every buyer. Buyers will always come to me and say, “Jared, I trust your stuff. I’ve been watching you for years. What’s going to happen?”

The Future of Market Trends

I believe that there is going to be a stagnant price ongoing till the market catches up. Okay. So here’s what I mean.

Was there an absolute run-up in price blasting affordability for home buying? Absolutely. That’s a fact; it’s incomprehensible. We had a rate of growth in price that is nearly incomprehensible.

It is not relative to normal passage of time, normal 4, 5, 6% year-over-year appreciation for housing. It made up years of growth in a very short period of time. Now, what can solve that problem is two things.

And most people focus on only one of those two things. One thing that can solve that problem is the market crashing in price overnight—home prices just drop. That’s what everybody wanted, that’s what everybody was hoping for.

But unfortunately, part two is a relative reality based on what is actually happening, based on the administration coming to the White House, based on what I foresee coming, based on what banks are predicting—because their money is the actual buyer for 70% of all housing.

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