April 21, 2025
The Tampa Bay housing market continues to correct after years of standing out as one of the hottest markets in the nation. But how much the market will change remains a topic of varied speculation.
A series of factors have impacted the market. During and immediately after the pandemic, Florida’s high rate of in-migration and the rise in remote work increased the state’s housing demand and drove up prices. Zillow estimates that home values increased by 58 percent — one of the highest surges among major U.S. metropolitan areas.
While houses sold for a lot, affordability became a pressing problem in the region and across the state. Now with builders elevating the number of new homes to match that in-migration, plus a downturn in demand because of several market dynamics, inventory has risen above pre-pandemic levels and now the region has turned into a buyers’ market. For example, Tampa Bay’s active inventory has risen 16% above its pre-pandemic level according to Lance Lambert, co-founder and editor of ResiClub, a media and research company dedicated to tracking regional housing markets.
“During the pandemic housing boom, from summer 2020 to spring 2022, the number of active homes for sale in most housing markets plummeted as homebuyer demand quickly absorbed almost everything that came up for sale,” Lambert recently wrote in a FastCompany article. “Fast-forward to the current housing market, and the places where active inventory has rebounded (due to strained affordability suppressing buyer demand) are now the very places where homebuyers hold the most power.”
Tampa Bay is not alone. Lambert lists 59 regional markets across the nation where inventory has returned to pre-pandemic levels, including Lakeland-Winter Haven, North Port-Bradenton-Sarasota, Fort Myers-Cape Coral, and Naples-Marco Island. The high supply has resulted in price reductions for homes on the market. Redfin reported 32.3 percent of the homes on the Tampa market had price reductions in February.
High supply isn’t the only factor. With mortgage rates remaining between 6 and 7 percent, condominiums growing increasingly expensive because of new state regulations and in-migration slowing because of property insurance and hurricane concerns, buyers may still remain reluctant despite the market shifts. The result is that new home builders are offering incentives and slashing prices, making it more challenging for resellers to succeed in the market.
ResiClub reported in March that Lennar, the nation’s second-largest homebuilder, spent the equivalent of 13 percent of home sales on buyer incentives in the fourth quarter of 2024. That translates to $52,000 in incentives on a $400,000 home. “Some buyers who might have opted for an existing home shift their focus to new homes where deals are still available,” Lambert wrote.
The softening of the market has led some to suggest the housing market will soon resemble the dire times coming out of The Great Recession between 2008 and 2010. However, other experts have stopped short of that comparison.
Nick Gerli, CEO of Reventure App, predicted in a recent Newsweek article that Florida won't be facing a housing crash this year, but simply a correction from its excessive overheating over the past few years.