Housing Market 2025: Florida Builders Scramble Amid Regional Divergences
The U.S. housing market faces a mixed forecast for 2025, with regional disparities shaping the narrative. While affordability remains a challenge in the Southeast and Texas, the Midwest and Northeast show resilience. Housing market analyst Nick Gerli, founder and CEO of Reventure App, shared insights into these trends, highlighting the forces at play.
Florida's Cooling Market
Florida, once a hotbed of pandemic-era housing activity, is grappling with a market slowdown. Active inventory has surged beyond pre-pandemic levels, and home prices are slipping in key areas such as Punta Gorda, Cape Coral, and Naples. Condo prices have similarly declined across nearly all Florida markets.
Gerli attributes this shift to three factors:
Slowing Inbound Migration: The post-pandemic surge of people relocating to Florida has waned.
Excess Supply: Builders have flooded the market with new inventory, increasing competition.
Affordability Challenges: Rising HOA fees and insurance costs are straining existing homeowners.
“These factors are pushing inventory up and demand down,” Gerli said. He predicts further declines of up to 10% in certain Florida markets next year. Builders, he noted, are feeling the pinch, with some offering aggressive incentives to offload unsold homes.
Texas: From Affordability to Overcorrection
Texas, another pandemic boom state, is also seeing a cooling market. Cities like Austin and San Antonio have experienced notable price drops, while Dallas shows signs of stagnation.
Gerli explained that Texas’s housing market, once undervalued, became overheated during the pandemic, pricing out many local buyers. Simultaneously, an overabundance of new housing inventory has hit the market, further pressuring prices.
“Austin might bottom out first,” he said. Prices there are down 20% from their peak and nearing sustainable levels. In contrast, Dallas remains highly overvalued, with only minor corrections so far.
Midwest and Northeast: Pillars of Stability
In stark contrast, the Midwest and Northeast housing markets remain robust. Cities like Buffalo, New York; Hartford, Connecticut; and Milwaukee, Wisconsin, continue to see rising home prices.
Gerli attributes this resilience to:
Relative Affordability: Home prices in these regions remain within reach for local buyers.
Limited Supply: A lack of new construction restricts inventory, keeping demand high.
These regions are projected to maintain moderate price growth through 2025.
Builders Face Mounting Pressure
Nationwide, builders are contending with the highest level of unsold inventory since 2009, totaling 113,000 homes in October. Florida and Texas are particularly affected, with builders offering discounts and lower mortgage rates to entice buyers.
“Builders are getting desperate,” Gerli said. “I toured a Tampa development where they offered a 4.7% mortgage rate and competitive pricing to move inventory.”
This dynamic may lead to broader price adjustments, particularly in oversupplied markets.
National Trends and Uncertainties
Overall, Reventure App forecasts a flat year for national home prices in 2025, with declines in the Southeast, Texas, and Mountain states offset by gains in the Midwest and Northeast.
Key uncertainties include:
Foreclosure Protections: Pandemic-era foreclosure moratoriums are still in place for many FHA and VA loans. Changes in these policies under the next presidential administration could lead to an increase in distressed sales.
Affordability Improvements: Rising wages and declining prices in certain regions may boost existing-home sales, projected to rise 10% over 2024 levels.
As the housing market navigates these challenges, buyers, sellers, and investors will need to closely monitor regional trends and macroeconomic shifts. The bifurcated landscape underscores the importance of localized strategies in an increasingly complex market.
