Florida's real estate boom has officially ended, with inventory spiking statewide and prices declining for the first time in 13 years. However, not every market is experiencing the same level of distress. While some counties face severe challenges including foreclosure spikes and massive oversupply, certain markets like Sarasota County continue to hold strong value due to superior amenities, school systems, and lifestyle offerings.
Frequently Asked Questions About Florida's Current Real Estate Market
Which Florida counties are struggling the most in 2025?
The five counties facing the greatest challenges are Osceola County (Kissimmee/St. Cloud), Polk County (Lakeland), Pinellas County (St. Pete/Clearwater), Lee County (Cape Coral/Fort Myers), and St. Lucie County (Port St. Lucie). These areas are experiencing significant price drops, inventory buildup, and in some cases, record foreclosure rates.
Why are these specific counties struggling more than others?
These counties share common factors: they experienced massive new construction booms during 2021-2022, they're often considered more affordable alternatives to premium markets, many have older housing stock with high insurance costs, and some were severely impacted by recent hurricanes leading to flooding and elevated insurance premiums.
What makes Sarasota County different from struggling markets?
Sarasota County maintains the state's #1 school district, boasts Siesta Key (America's #1 beach), offers superior lifestyle amenities including world-class dining and cultural attractions, and focuses more on established neighborhoods rather than oversupplied new construction developments.
Should I avoid buying Florida real estate entirely in 2025?
Not necessarily. Real estate is local, and while some counties struggle significantly, others like Sarasota County continue holding strong values. The key is choosing established areas with limited supply, good schools, beach proximity, and lifestyle amenities rather than oversupplied new construction markets.
What type of properties should I target in Florida right now?
Focus on newer homes (not brand new construction), properties outside flood zones to minimize insurance costs, locations with beach proximity and lifestyle amenities, established communities with limited ongoing construction, and areas with strong school districts and long-term desirability factors.
How bad is the foreclosure situation in struggling counties?
Polk County leads the nation in foreclosures, with one in every 172 homes filing for foreclosure—more than double the national average. This stems from buyers who purchased new construction at peak prices and now find themselves underwater on their mortgages as values decline.
What should I look for when choosing a Florida market in 2025?
Prioritize location over price, seek areas with established amenities and infrastructure, choose markets with diverse economies rather than construction-dependent areas, select properties with lower insurance costs, and focus on communities with long-term lifestyle appeal rather than speculative new developments.
Florida's Statewide Real Estate Reality Check
The Florida real estate market has entered a significant correction phase, marking the end of the post-pandemic boom that drove unprecedented price growth across the state. Statewide inventory has increased by 23%, representing the first major price declines in most metro areas in approximately 13 years. This shift signals a fundamental change from the seller's market that dominated Florida real estate from 2020 through early 2024.
The correction isn't uniform across the state, however. While Florida as a whole is experiencing market softening, certain counties and regions are bearing the brunt of this downturn far more severely than others. The counties facing the greatest challenges share several common characteristics: they experienced massive construction booms during the pandemic era, they historically served as more affordable alternatives to premium markets, and many now face oversupply issues that are driving significant price reductions.
Understanding these market dynamics is crucial for anyone considering a Florida relocation in 2025. The key is recognizing that real estate remains intensely local, and making informed decisions based on long-term market fundamentals rather than short-term price movements.
The Five Florida Counties Struggling Most in 2025
#5: St. Lucie County (Port St. Lucie)
St. Lucie County represents a classic case of pandemic-era overvaluation coming home to roost. During 2021 and 2022, this area attracted massive influxes of retirees, empty nesters, and remote workers seeking affordable Florida living. This demand surge drove home prices to levels that analysts now believe represent up to 40% overvaluation compared to local income levels and rental market fundamentals.
The county currently shows over six months of inventory, well above the five-month threshold that indicates a balanced market. Anything above five months signals a buyer's market where prices face downward pressure, and St. Lucie County has crossed this threshold decisively. The fundamental disconnect between local wages and housing costs has created an unsustainable bubble that's now deflating.
Key warning signs in St. Lucie County:
- Most overvalued county in Florida according to analysts
- Local incomes cannot justify current home prices
- Rental market doesn't support purchase price levels
- Inventory accumulating beyond sustainable levels
- Price reductions becoming increasingly common
#4: Lee County (Cape Coral and Fort Myers)
Lee County faces a perfect storm of challenges stemming from both natural disasters and market fundamentals. Cape Coral and Fort Myers were already experiencing overheated pricing when Hurricane Ian devastated the region, creating a cascade of additional problems that continue reverberating through the market.
The county is experiencing the largest home value decline in Florida at 8%, representing the worst performance since the Great Recession. Sales volume has dropped 25% year-over-year, while a staggering 34% of current listings have already reduced their asking prices. This combination of factors creates a challenging environment for both current homeowners and potential buyers.
Hurricane impact has created multiple layers of difficulty:
- Widespread flooding and property damage
- Dramatically increased insurance costs
- Buyer hesitancy due to climate risk concerns
- Infrastructure repair and replacement challenges
- Reduced investor and second-home buyer interest
The elevated insurance costs following the hurricane have made an already expensive market even less affordable, accelerating the exodus of both residents and potential buyers to more stable markets.
#3: Pinellas County (St. Petersburg and Clearwater)
Pinellas County is experiencing an eight-year high in inventory levels, with approximately 5,600 active listings representing a 33% increase year-over-year. Sales activity has declined 13%, creating a significant imbalance between supply and demand that's putting sustained pressure on home values.
Unlike some other struggling markets that are primarily dealing with new construction oversupply, Pinellas County's challenges stem largely from its older housing stock and insurance-related issues. Much of the county consists of established neighborhoods with homes built decades ago, often in low-lying areas that require flood insurance and command higher homeowner's insurance premiums.
Pinellas County's unique challenges:
- Predominantly older housing stock with higher insurance costs
- Many low-lying areas requiring flood insurance
- Limited new construction options
- Hurricane-related flooding in some areas
- Residents seeking newer construction alternatives
The combination of aging infrastructure, insurance concerns, and limited new development options has created a situation where many residents are choosing to relocate to newer communities in surrounding areas, further increasing inventory and downward price pressure.
#2: Polk County (Lakeland Area)
Polk County has earned the dubious distinction of being the #1 foreclosure county in the entire United States as of late 2024. With one in every 172 homes filing for foreclosure—more than double the national average—the county exemplifies the dangers of construction boom-and-bust cycles.
The root of Polk County's problems traces back to 2022, when builders pulled over 200,000 construction permits, far exceeding actual demand for the area. As these homes were completed in 2023 and 2024, they entered a market where demand had significantly cooled, creating massive oversupply and forcing dramatic price reductions.
The foreclosure crisis stems from multiple factors:
- Buyers who purchased new construction at peak prices
- Current home values below purchase prices (underwater mortgages)
- Oversupply preventing price recovery
- Financial distress from payment obligations exceeding home values
- Investor and builder bankruptcies adding to distressed inventory
This combination of oversupply and financial distress creates a vicious cycle where declining prices lead to more foreclosures, which further depress values and discourage new buyers from entering the market.
#1: Osceola County (Kissimmee and St. Cloud)
Osceola County tops the list of struggling Florida markets due to what can only be described as catastrophic oversupply of new construction homes. Located just north of Orlando, this area experienced a construction frenzy during the pandemic boom that has resulted in record-setting oversupply levels on a statewide basis.
The county's proximity to Orlando initially made it attractive to buyers seeking more affordable alternatives to Orange County pricing. However, the massive construction boom created inventory levels that far exceed current demand, leading to continued price declines and a shrinking buyer pool.
Osceola County's oversupply crisis includes:
- Record-breaking new home inventory levels
- Continued construction completions adding to supply
- Significantly decreased sales transactions
- Buyer pool shrinking due to market uncertainty
- Prices expected to continue declining through 2025
The fundamental imbalance between supply and demand in Osceola County represents one of the most severe market corrections currently occurring in Florida real estate.
Understanding the Common Threads
These five struggling counties share several important characteristics that help explain their current difficulties:
Geographic Positioning: Most serve as more affordable alternatives to premium markets (Lakeland to Tampa, Osceola to Orlando, St. Lucie to Palm Beach areas). When primary markets soften, these secondary markets often experience amplified effects.
Construction Boom Legacy: All experienced massive new construction activity during 2021-2022 that exceeded long-term demand fundamentals, creating persistent oversupply issues.
Affordability Trap: Initially attractive due to lower prices, these markets saw costs rise to levels that local economies couldn't support, creating unsustainable pricing bubbles.
Insurance Challenges: Many feature older housing stock, flood-prone areas, or hurricane damage that has dramatically increased insurance costs, reducing affordability and buyer interest.
Why Sarasota County Continues Thriving
While many Florida markets struggle, Sarasota County demonstrates the importance of fundamental strengths in maintaining real estate values. Several key factors distinguish Sarasota from the struggling counties and position it for continued stability.
Educational Excellence as a Foundation
Sarasota County maintains the #1 school district in Florida, a distinction that creates sustained demand from families relocating from other states. This educational advantage provides a fundamental economic driver that transcends short-term market fluctuations, as families consistently prioritize quality education when making relocation decisions.
The school district's excellence attracts young professionals and families who contribute to economic diversity and create sustained housing demand across multiple price points and property types.
Unmatched Beach and Lifestyle Amenities
Sarasota County boasts Siesta Key, ranked as America's #1 beach, providing a world-class natural amenity that creates permanent desirability advantages. The county's west coast location offers daily sunset views and beach access that attracts both residents and visitors year-round.
Beyond beaches, Sarasota offers cultural amenities that distinguish it from purely residential markets:
- Van Wezel Performing Arts Hall hosting Broadway productions
- Sarasota Opera with internationally recognized programming
- Asolo Repertory Theatre providing year-round professional theater
- Downtown Sarasota's sophisticated dining and nightlife scene
- Extensive arts and cultural festival calendar
Smart Development Patterns
Unlike counties struggling with new construction oversupply, Sarasota County has maintained more balanced development patterns. While new construction exists in master-planned communities like Lakewood Ranch and Wellen Park, the market doesn't rely primarily on new builds.
The county's strength lies in established neighborhoods that offer:
- Newer homes (built within the last 10-20 years) rather than brand-new construction
- Properties outside flood zones with lower insurance costs
- Proximity to beaches, downtown amenities, and cultural attractions
- Mature landscaping and established community character
- Diverse housing options across multiple price points
Strategic Location Advantages
Sarasota County's geographic position provides multiple benefits that create sustained demand:
- Direct beach access rather than inland locations requiring drives to water
- Reasonable proximity to Tampa Bay area employment centers
- Access to Southwest Florida International Airport for travel convenience
- Protected from some hurricane impacts due to Gulf Coast positioning
- Central location for exploring other Florida destinations
Recommended Investment Strategy for 2025
Given the current market conditions, successful Florida real estate investment in 2025 requires a strategic approach that emphasizes location quality over price speculation.
Focus on Established Markets with Amenities
Rather than chasing the lowest prices in struggling markets, prioritize locations with proven long-term desirability factors. Look for areas with:
- Superior school districts that attract families consistently
- Natural amenities like beach access or waterfront locations
- Cultural and entertainment infrastructure supporting lifestyle goals
- Diverse economic bases beyond construction and development
- Historical price stability during previous market cycles
Target Newer Homes in Established Areas
The sweet spot for current Florida real estate investment lies in newer homes within established communities rather than brand-new construction in developing areas. This approach provides:
- Lower insurance costs compared to older properties
- Modern amenities and energy efficiency without new construction premiums
- Established neighborhoods with mature amenities and infrastructure
- Reduced risk of oversupply issues affecting new construction markets
- Better resale potential due to location desirability
Palmer Ranch: A Case Study in Smart Positioning
Palmer Ranch exemplifies the type of community that continues performing well despite broader market challenges. This master-planned community west of I-75 in Sarasota County offers:
Location Advantages:
- Miles from Siesta Key and Nokomis Beach
- Quick access to downtown Sarasota amenities
- Proximity to UTC Mall and Sarasota-Bradenton Airport
- Easy commute access to Tampa Bay area if needed
Property Benefits:
- Newer homes with modern amenities and efficiency
- Larger lots compared to newer construction developments
- Most properties elevated above flood zones
- Lower insurance costs due to elevation and newer construction
- Established landscaping and community amenities
Market Stability Factors:
- Limited ongoing new construction reducing oversupply risk
- Strong resale market due to desirable location
- Diverse housing options from condos to estate homes
- Community amenities supporting long-term lifestyle goals
Insurance Considerations in Today's Market
Insurance costs have become a critical factor in Florida real estate decisions, particularly following recent hurricane seasons. Understanding insurance implications can significantly impact both affordability and long-term property values.
Elevation and Flood Zones
Properties outside designated flood zones command significant advantages in both insurance costs and buyer appeal. When evaluating potential purchases:
- Verify flood zone designations through FEMA maps
- Consider elevation certificates for properties near zone boundaries
- Factor flood insurance costs into total ownership expenses
- Understand that flood zone changes can affect future values
Age and Construction Quality
Newer construction typically qualifies for better insurance rates due to:
- Modern building codes and hurricane-resistant features
- Updated electrical, plumbing, and HVAC systems
- Better roof materials and installation standards
- Lower risk of claims due to system failures or weather damage
Geographic Risk Assessment
Location within Florida significantly affects insurance availability and pricing:
- Gulf Coast properties may have different risk profiles than Atlantic Coast
- Inland properties avoid some hurricane surge risks but may face flooding
- Urban areas typically have better emergency services and infrastructure
- Proximity to fire stations and hospitals can affect coverage costs
Making Informed Decisions in 2025
Successfully navigating Florida's real estate market in 2025 requires a long-term perspective that prioritizes fundamental value drivers over short-term price movements.
Questions to Ask Before Buying
Market Fundamentals:
- How much new construction is planned or under development in the area?
- What are the primary economic drivers supporting local employment?
- How has the area performed during previous market corrections?
- What is the current months of inventory supply?
Property-Specific Factors:
- What are the total insurance costs including flood coverage if required?
- How does the property's elevation affect flood and wind risk?
- What are the property taxes and special assessments?
- How does the home's age and condition affect insurance and maintenance costs?
Lifestyle Compatibility:
- Does the location provide the amenities and access you prioritize?
- How does the area's character align with your long-term lifestyle goals?
- What is the quality of schools, healthcare, and services?
- How convenient is access to beaches, cultural amenities, and entertainment?
The Importance of Local Expertise
Florida's diverse market conditions make local knowledge invaluable for making informed decisions. Working with professionals who understand specific market dynamics, community characteristics, and long-term trends can help avoid costly mistakes in challenging market conditions.
Key areas where local expertise proves valuable:
- Understanding micro-market conditions within broader regions
- Identifying properties with optimal insurance cost profiles
- Recognizing communities with strong long-term fundamentals
- Navigating pricing negotiations in changing market conditions
- Connecting with qualified inspectors, contractors, and service providers
Looking Ahead: Florida Real Estate Beyond 2025
While current market conditions present challenges for some Florida counties, the state's fundamental attractions remain strong for many buyer categories. Population growth, favorable tax policies, climate advantages, and lifestyle amenities continue drawing residents from other states.
The key for successful real estate decisions lies in distinguishing between markets experiencing temporary corrections versus those facing fundamental structural challenges. Counties with diversified economies, established amenities, quality infrastructure, and proven long-term demand patterns are positioned to weather current challenges and resume growth.
Markets likely to recover first typically feature:
- Strong school systems attracting families
- Natural amenities providing permanent lifestyle advantages
- Diverse economic bases beyond construction and development
- Infrastructure supporting long-term population growth
- Cultural and entertainment amenities enhancing quality of life
Markets facing longer-term challenges often struggle with:
- Overdependence on construction and development activity
- Limited natural or cultural amenities differentiating them from alternatives
- High insurance costs due to age, location, or risk factors
- Lack of economic diversity supporting sustained population growth
- Oversupply situations requiring years to resolve
Conclusion
Florida's real estate market in 2025 presents both significant challenges and selective opportunities. While counties like Osceola, Polk, Pinellas, Lee, and St. Lucie face serious headwinds including oversupply, foreclosures, and elevated costs, markets like Sarasota County continue demonstrating the value of fundamental strengths.
The key to successful Florida real estate investment in this environment lies in prioritizing location quality, established amenities, and long-term sustainability over short-term price considerations. By focusing on areas with superior schools, natural amenities, cultural infrastructure, and proven desirability, buyers can position themselves to benefit from Florida's long-term growth while avoiding the pitfalls currently affecting oversupplied and overvalued markets.
Whether you're considering retirement, family relocation, or investment opportunities, thorough research and local expertise remain essential for navigating Florida's complex and varied real estate landscape in 2025.
Ready to Explore Florida's Stable Real Estate Markets?
If you're considering relocating to Sarasota County or anywhere else on Florida's beautiful Gulf Coast, the Zachos Realty & Design Group is here to help. With over 40 years of local expertise and a unique combination of real estate knowledge and award-winning design vision, we can help you find the perfect property that matches your lifestyle needs while avoiding the pitfalls affecting struggling markets.
Contact us today:
- Phone: 941-500-5457
- Email: [email protected]
- Sarasota Office: 205 N Orange Ave Suite 202, Sarasota, Florida 34236
- Venice Office: 217 Nassau St S, Venice, FL 34285
Visit our YouTube channel "Relocation Experts | Florida's Gulf Coast" for more insider guides to Florida's Gulf Coast communities.
