6 Florida Cities Where Home Prices Could Plummet by 2026
Written by
Nicole Spector
Edited by
Molly Sullivan
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Florida still tops many people’s lists of places they’d love to move to and, if certain trends persist, that dream may become a lot more affordable for buyers in the coming months. Home prices in some cities are falling significantly, and experts suspect the worse is yet to come.
A driving force behind falling home prices in Florida is, ironically, the weather. The same feature that draws people in is also driving people out, as home insurance prices surge. The Sunshine State is particularly vulnerable to climate change, and as the globe warms, the Sunshine State is experiencing rising sea levels which lead to flooding, stronger hurricanes and extreme heat.
“Stronger hurricanes and worse flooding means more expensive home insurance, which means challenges getting approved for a mortgage, which ultimately pushes home prices down,” said Max Dugan-Knight, climate data scientist at Deep Sky.
Real estate experts discussed six cities in Florida where home prices are on track to plummet by as soon as next January.
Cape Coral
- Average home value: $356,275 (down 8.9% over the past year)
Phil Green, CEO at I Buy SD, has observed a boom of interest from out-of-state buyers (most likely retirees) in recent years, but senses things may start to dry up soon and that home prices, which are already dropping overall, will continue to fall here.
“I think this will definitely be an area where folks will start to realize the market is a bit overshot,” Green said.
Port St. Lucie
- Average home value: $390,625 (down 3.4% over the past year)
Port St. Lucie, where the average home value is nearly $400,000, could also be on the brink of a real estate pricing nosedive.
“This area seems to be observing astronomical pricing for homes, far above what local incomes could realistically support,” Green said. “This is the common kiss of death for a housing market. Normal income families quickly get priced out from the get go. This is what is happening across the states in San Diego — and it starts to squeeze both current owners and potential buyers.”
Lakeland
- Average home value: $315,341 (down 3.1% over the past year)
What ails Lakeland’s real estate market behooves buyers: a surplus of inventory.
“This city saw a boom in new construction,” said Jenna Stauffer, global real estate advisor at Sotheby’s International Realty and based in Key West, Florida. “Now, it has an inventory glut and a noticeable uptick in foreclosures.”
Punta Gorda
- Average home value: $362,108 (down 10.8% over the past year)
The housing market in Punta Gorda is already tanking — down 10% over the past year. And it’s probably going to tank even more.
“It was hit hard by Hurricane Ian so is also facing the threat of rising insurance costs especially in older and/or waterfront homes,” Stauffer said. “Median home prices have far outpaced the local income levels, which is unsustainable in the long term.”
Palm Bay
- Average home value: $312,525 (down 4.1% over the past year)
Home values in Palm Bay are slipping and the future could be bleak.
“Palm Bay saw an onslaught of new construction as builders hurried to satisfy pandemic demand, particularly for affordable homes priced under $300,000 — but that demand has slackened,” said Daniel Blake, home concierge manager at Clever Offers. “If we’re going to see inflation persist or if we have a mild recession, I believe Palm Bay can anticipate price declines of 10%-15% over the next 18-24 months.”
Tampa
- Average home value: $379,156 (down 3.7% over the past year)
Alexei Morgado, a realtor in Florida and the CEO/founder of Lexawise Real Estate Exam Preparation, is keeping a close eye on Tampa, sensing further slippage to come in home values.
“Tampa was one of the strongest areas for non-resident buyers during the pandemic, but post-mid-2024 times are different,” Morgado said. “One of the key reasons is overbuilding; builders ran ahead of demand, and now we have excess inventory. In fact, nearly 50% of Tampa metro listings have been on the market for more than 60 days, significantly above national metrics.”
The surging price of home insurance in Tampa isn’t helping the local market.
“In certain parts of Hillsborough and Pinellas Counties, certain homeowners are paying upwards of $6,000 per year in insurance,” Morgado said. “That’s priced out a very significant portion of potential buyers, including first-time buyers. With affordability constricting, price reductions become more common in an effort to maintain transactions. The price correction is not a short-term anomaly, it’s structural.”
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