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housing market downturn is looming in Florida and Texas, according to real estate analyst Nick Gerli. The two states have seen a surge in inventory, which will likely lead to significant price declines. In contrast, the Northeast's housing market continues to appreciate.

    The boom in Florida and Texas during the pandemic led to an influx of out-of-state buyers, prompting a massive increase in new home construction. However, with migration slowing down since the end of the pandemic, these markets are now facing dramatic cooldowns. Data from Reventure App shows that Florida and Texas combined had 261,000 active listings in January 2025, a 207% increase over the Northeast's total of 85,000.

    Gerli notes that this disparity highlights the bifurcated nature of the housing market, with the downturn happening in Texas and Florida while the Northeast struggles with a historic inventory shortage. He believes that many real estate outlets are underreporting the downturn in these states because they have the largest number of realtors, investors, and wholesalers.

    Redfin economist Chen Zhao previously predicted that Florida and Texas would be the best markets for U.S. homebuyers this year, offering the most selection and room to negotiate. However, Moody's Analytics economist Matthew Walsh warned that the overvaluation of Florida during the pandemic makes it an interesting state to watch this year for buyers.

    Gerli sees the downturn in these states as an opportunity rather than a disaster. He believes that more inventory and cheaper prices will ultimately draw buyers back into the market. To attract homebuyers, prices need to come down, which is happening in Florida and Texas but not in the Northeast, where too few homes for sale lead to high competition and bidding wars.