Have Florida and Texas Fallen Into A Housing Market Spiral?

Senior Housing Reporter

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The tide has turned dramatically on the Florida and Texas housing markets since the end of the pandemic, with the two states now verging closer to a “housing market spiral,” as real-estate analyst Nick Gerli puts it.

During the COVID crisis, remote work and low mortgage rates triggered a surge of demand in both states, as buyers from across the country moved to Florida and Texas in search of lower taxes, warmer climates, and cheaper housing. That surge drove prices sharply higher and ultimately priced out many local buyers, especially after mortgage rates nearly doubled during the Federal Reserve’s inflation-fighting campaign.

At the same time that demand started dwindling in the two states, new inventory built by developers during the height of the pandemic started landing on the market, making things worse.

Now there were more homes for sale, but nobody was really interested in buying them—or able to afford them.

In the former pandemic boomtown of Austin, Texas, sellers currently outnumber buyers by 112 percent, according to the latest Redfin data. In Miami, sellers outnumber buyers by 148 percent—the biggest gap of any metropolitan area in the country.

Why the Reversal of Fortune?

“The popularity of Florida and Texas has declined significantly,” Gerli, who is also the founder of real-estate analytics company Reventure App, told Newsweek. 

“Net domestic migration to Florida is down 93 percent from the pandemic peak and at its lowest level in 14 years. Meanwhile, in Texas, domestic migration is down 65 percent from the pandemic and near a 20-year low.”

The loss of affordability in Texas and Florida is a big reason why fewer homebuyers are moving in, Gerli said. 

“Prior to the pandemic, these markets were legitimately affordable, and you could buy a house on an income of $50,000 to $60,000 per year. These days, you need to earn twice that,” he explained. “Additionally, return-to-office mandates are drawing some of the people who moved to Texas and Florida back to the coasts, which is hurting migration figures.”

But there is more to the crisis than both states’ housing markets facing than slower domestic migration.

“Florida is caught in a triple squeeze of elevated prices, surging insurance costs, and a distressed condo market as high insurance premiums and high homeowners association (HOA) fees land on top of a median sale price that has risen 67 percent from its pre-pandemic norm, faster than both Texas and the country as a whole,” Realtor.com senior economic research Analyst Hannah Jones told Newsweek.

“The result is a market where prices remain stubbornly elevated, with Florida’s 2025 median of $382,000 barely 1 percent below its 2023 peak, while volume has fallen 37 percent from peak and sits 20 percent below pre-pandemic norms,” she said.

Texas, on the other hand, “is dealing with a supply glut more than a demand crisis, the product of pandemic-era construction activity colliding with slowing migration and rate-locked sellers finally coming off the sidelines,” Jones said.

“The underlying demand base is still there, as sales volume only 5 percent below pre-pandemic norms suggests, but buyers have little reason to rush in a market where inventory is abundant and prices are drifting lower.”

The South's Loss Is the Midwest's Gain

As Florida and Texas have priced themselves out of reach for many buyers, “the Midwest has emerged as the rational alternative,” Jones said.

“The Midwest and Great Lakes regions have wide appeal because they’re fairly affordable and provide relatively safe havens against climate-related events like wildfires and floods,” she added, “a point that increasingly resonates with buyers watching insurance costs spiral in coastal Sun Belt markets.”

In the Midwest, homes remain affordable on a middle-class salary—even though construction did not surge during the pandemic, keeping supply tight. 

“With more buyers competing for fewer homes, prices in the region have been climbing,” Daryl Fairweather, chief economist at Redfin, told Newsweek.

Cleveland in particular has become a much-coveted destination for Americans hoping to buy a home, especially young people and low-income households, and is now one of the few balanced markets in the country, according to Redfin.

The median sale price of a home in the city is around $150,000, according to Realtor.com data, less than one-third of Miami’s $625,000.

“Cleveland’s median list price offers compelling value to potential buyers, well below the national median,” Jones said. “Buyers are drawn to the Midwest not just by cheaper homes, but by the ability to build wealth earlier.”

According to a recent Realtor.com report, the earlier you are able to buy a home, the wealthier you would be later in life. Purchasing a home by age 30 is associated with a 22.5 percent higher net worth (+$119,000) at age 50 compared to buying in one’s 40s, researchers found. 

Has the Tide Turned for Good?

Juan Arias, national director of U.S. industrial analytics at CoStar, believes that the pandemic-driven migration surge to Florida and Texas “is now in the rearview mirror.”

He also pointed to tighter international immigration conditions as a factor slowing population growth.

“A state like Florida, particularly South Florida, is highly exposed to international migration; this moderation in inflows has significantly impacted population growth,” he said.

He added that Texas has a more balanced mix of domestic and international migration, but is still seeing slower growth despite continued inflows driven by employment opportunities and lower costs.

Even so, analysts say the “pandemic-era gold rush is clearly over,” though Florida and Texas “haven’t fallen off the map” for homebuyers.

“We’re seeing a structural recalibration in Florida and Texas, not a collapse,” said Hannah Jones, senior economic research analyst at Realtor.com.

She noted that Florida home sales peaked at about 610,000 in 2021 and have since fallen 37 percent, a sharper decline than the national drop of 33 percent from peak.

Florida now sits about 20 percent below its 2017-2019 annual sales norms, she added.

Texas tells a different story, she said, with home sales down 27 percent from the 2021 peak but only 5 percent below pre-pandemic levels, suggesting a correction rather than a sustained downturn.

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