Is Florida's Real Estate Market in a Bubble? Market Analysis + 4 Critical Lessons for Investors

Just a few years ago, everyone was moving or talking about moving to Florida. Shoot, I even lived there. Investors were fighting over deals, causing prices to skyrocket. But now, homes are sitting longer, insurance rates are exploding, and some folks are saying Florida's in a bubble. Let's break down what's happening and what it means for your next investment. So, Florida had a little bit of a pandemic boom. Now, I can say that I personally experienced this because the first six months of what happened in 2019, I was living in San Diego. The back half, I was in Pensacola, Florida. And I can tell you, the back half, things were way more relaxed than we were experiencing in San Diego. You had tons of migration to the state due to relaxed pandemic policies, folks that were able to work remote that couldn't before. I saw a lot of folks coming down from Alabama and Georgia. You still have folks retiring, and then you still have folks also investing. Hey, this is where the demand is going. Let's also place our dollars there. One of the things that we personally saw was pretty rapid appreciation and just kind of skyrocketing home prices. The property we bought, we initially paid $435K for in 2019. When we sold it in 2023, it went for $550,000. Pretty big jump. If I'm being blunt, I would have paid $435K for that house. I don't think I would have paid $550K for it personally. While we lived in Florida, there were multiple hurricanes that hit that made it A, expensive to get work done and B, pretty hard to find qualified labor talent. But then you also had things like the insurance spike on the back of that. I've talked about this on this channel numerous times. When we bought my house, it was like $2,300 a month. By the time we left, it was over $3,300 a month for the same house, just with the increase in taxes and insurance while we lived there. I remember my wife asking me, like, how do people afford this? Let's take a look at some of the actual data of what's going on in Florida and some of the cracks that are starting to show. Back on February 27th of 2025, we saw this article come out on Redfin stating that there was more inventory available than previously seen. Now, they say that there was more homes for sale, more inventory places sitting not being bought than what they'd seen since 2012. And that was only at 172,000 homes. It was in February. We're now in June. So, March, April, May. What's gone on the past four months? It hasn't gotten prettier. If you've been on this channel at all before, we're big fans of Fred. St. Louis Federal Reserve Bank has just incredible information you can snag. This is active listings in Florida. And if we look, the numbers have actually increased since what they had in January. In January, they were at 157,000 units. Now, we're at 181,000, 182,000. So, it has not gotten better. Let's take a look at Redfin's current data for what's going on in the state of Florida as a whole. At the state level, prices have declined. The amount of homes selling has declined. The days on market has increased. And if we look at some of this, it's gone up quite a bit. It was actually a lot higher in January, which is kind of like the seasonal spike anyway. But we're trending up over the past four or five years. Now, it's worth pointing out. It's a little difficult to make real estate investment decisions at a state level. We want to look at where we're actually living, where we're actually investing. But I do think it's important to look at the thing as a whole. But there are still markets where pricing is going up. So, if we look at Naples, for instance, pricing in Naples has gone up 20% year over year. Now, sales are declining and places are taking longer to sell. But it's not like Florida as a whole is in free fall. There are some cities that are, though. Redfin's data is a little bit different than St. Louis Fred. I don't necessarily know where they're both pulling from. But Redfin has 236,000 homes for sale in the state of Florida. Got looks like a little bit less properties coming to market. So, it does seem like it's slowing down on who's listing. And we're now at a six-month supply. What that means, if you're not familiar with that term, is effectively if another home wasn't listed and the number of buyers stayed buying at the level that they were, it would take six months to get through the existing inventory that is for sale. So, if another home wasn't listed, it would take six months for everything listed to sell. So, 10% of homes are still selling above list. This hits on something we've been preaching about. Price your home or your investment properties that you're selling appropriately. Don't expect that you're going to set some new record right now and swing for the fences. Make it where it's a good deal. This is also why doing good interior design is absolutely key. I've got an affiliate link. I'm not even going to drop it. But we lean on the folks at ivoryhome.co to help us make our projects look better than all of the competition out there. So, if you price right and you design right, you can still sell for above what you're asking price is right now. Looking at this though, we've got 32% of homes with price drops. The average property is selling for like 3.6% below what it originally lists at. We have inventory rising in some key cities like Cape Coral, Tampa, and other parts of Southwest Florida. Due to affordability concerns with things like insurance premiums and mortgage rates, we can see people paying over asking has pretty well declined in Florida. When rates went up back in early 2022, we can see that we pretty much fell off a cliff here and people wanting to overpay for properties. We've got more days on the market. We've got fewer homes selling for above ask. And in some counties, insurance rates have gone up from 30% all the way to 70% due to the risk of things like hurricanes and storms. Now, my goal with this video isn't like the sky is falling in Florida. If you're in Florida, sell your house and flee. That's not it at all, but it's what are the actionable takeaways as folks involved in real estate that we can draw from what we've watched play out in the state. I've got four lessons for real estate investors from what we've seen in Florida the past couple of years. One is I wouldn't chase hot or trendy markets. I'm a big believer of investing in your backyard or where you're actively involved. So if you live in the state of Florida, guess what? We're going to keep investing in the state of Florida. We're just going to make sure that we're getting really, really good deals with tons of margin and multiple exit strategies. I invested in Florida when I lived there and I stopped investing there when I left. The second thing that we want to factor for is all of the carrying costs or potential variables. If you're buying a home that has a significantly lower tax assessed value than what you're buying it for, you might want to plan on your taxes and your insurance going up as a result. If you're buying a home that's in terrible shape, you're doing a large remodel and you plan on keeping it as a new property, realize that improvement in appearance and condition is likely to trigger a bump in taxes when they realize, hey, this place is no longer falling over. Zillow has their new like climate risk data that's popping up on places listed for sale, and it would be worth looking at what they're saying about your home. I haven't personally had a seller be like, oh, this place has a worse flood score than that, so I don't know that I want to buy it, but we might end up there. The third point I want to make is some of the best deals might be in more overlooked areas. If I was just going to throw a dart on the map and invest somewhere new right now, I would want to look for somewhere that historically has been extremely stable, hasn't seen crazy price increases or price spikes, has a solid local economy supported by multiple industries, and likely doesn't have a ton of savvy competition. There are several markets around the country that definitely hit that criteria, and if I was just going to go somewhere random, it wouldn't be where the hype is, it would be where the fundamentals are. The fourth thing that I would be on the lookout for is what I would call like boomtown fatigue. A lot of folks are moving into a market, there has to be something driving that. And if it's something like a new manufacturer coming to town or something, that's one thing. If it's something like pandemic related, at some point that's likely to course correct or change. If I was investing in a market that, for instance, was super tourism heavy right now, I would be a little bit more concerned. Inflation being what it is, people have less disposable income than they've typically had. This summer's travel season might trend a little bit lower than what you've typically seen, especially if you have an ugly Airbnb and not a really cool experience. What we don't want to see is too much inventory and too few qualified buyers. I personally believe Florida is a fantastic state, but it is not now, nor has it ever really been a guaranteed win. I said it just a second ago, but I'll say it again. Smart investors aren't going to follow hype, they're going to follow the fundamentals. And spoiler alert, if I was looking for a second home in Florida, right now is probably when I would be shopping and making insultingly low offers to get a steal on my second home. If you haven't already, be sure to like and subscribe. Again, my name is Ryan Dossey. Talk to you guys next time.