F
lorida's real estate market slowed down in 2024 due to a perfect storm of high mortgage rates, property insurance costs, economic uncertainty, and extreme weather events. But will this trend continue into 2025? According to Dr. Brad O'Connor, chief economist at Florida Realtors, the answer is yes - especially in certain local areas.

    The market's shift towards buyer-friendliness was evident in the inventory levels of single-family homes and condos/townhomes. Single-family homes ended 2024 with 4.7 months of inventory, just within seller's market territory, while condos and townhomes had a more substantial surplus, with 8.2 months of inventory.

    The year-over-year growth in single-family home inventory was consistent across the state, with most counties recording increases between 25% and 35%. However, condos and townhomes saw varying levels of growth, with some areas experiencing a greater increase than others.

    Several challenges weakened housing demand in Florida last year, including persistently high mortgage rates and property insurance costs. The state's real estate market was also impacted by multiple hurricanes, internal migration slowdown, job growth deceleration, and moderate international buyer demand.

    The sharpest declines occurred in coastal counties along the Atlantic and Gulf Coasts, while areas like the I-4 corridor, suburban Tampa, Orlando, The Villages, and Ocala saw condo and townhome sales grow compared to 2023. Inventory levels in both categories ended the year slightly above pre-pandemic levels.

    Looking ahead to 2025, interest rates will continue to dictate market behavior, with the challenges of 2024 remaining key factors for Florida's real estate sector.