Boom or Bust? Housing Values Are Falling Sharply in These Florida Areas.

Bradenton, Florida in Manatee County.Photo byThumbwind PublicationsonUnsplash

When the housing market surge reached its peak in the middle of 2022, many experts warned of a pullback. In some Florida counties, they appear to have been right.

While rental prices have remained stubbornly high, housing prices retreated slightly in the latter half of 2022. Most areas are still significantly more expensive than they were just a few years ago, but homebuyers who purchased at the peak of the market may already find themselves underwater on their mortgages, depending on the timing of their purchase.

As is often the case, that is more true in some areas than others. Not coincidentally, many of the areas that saw the steepest inclines in home values as inventory shortages drove markets higher are now the same communities facing a sizeable decline in those same values. We'll take a look at a few of the Florida counties that have lost the most value since their peak, based on Redfin's median home sales data prices for 2022.

Each of the areas we evaluated had one thing in common: significantly more inventory on the market now than they had a year ago, and a much longer lead time to sell a home in the area. We'll dig into each of those statistics in our troubled areas below:

3. Manatee County: $49,000 decline

Back at its peak in mid-2022, Manatee County saw homes selling for a median price of $495,000. While far from Florida's most expensive counties, this did represent a sizeable increase in the area considering the same metric was only $293,000 in June of 2020. While many homeowners will still be just fine with their home's value after such a rise, those who bought at the peak of the market might feel differently.

Manatee's price drop of $49,000 towards the end of 2022 is nearly double the $27,000 decline that Florida saw overall and represents just under a 10% decline in home values. Perhaps worse news for Manatee County homeowners, however, is in the current market statistics: more homes are on the market than at any time in the past two years, and the time it's taking for them to sell has more than tripled since January 2022.

Another worrisome sign for current sellers: In April of 2022, 49.3% of homes sold for more than their listing price in the county. In December of 2022, that number had fallen to just 9.5%.

2. Martin County: $50,000 decline

Directly across the state on the Atlantic, Martin County hasn't fared any better than its westward neighbor. While slightly cheaper in the overall price, the county has experienced a similar decline - from $470,000 in May of 2022 down to $420,000 now.

Nearby Port St. Lucie.Photo byKaitlin DuffeyonUnsplash

At roughly a third the size of earlier-discussed Manatee County, Martin is subject to much more volatility in their real estate data as there are fewer sales and inventory in the area. That also makes this area's appearance on this list the most likely to be temporary.

That said, other aspects of the market appear to make the price decline more of a trend and less of an aberration. The number of pending sales in the county is at its lowest level since December of 2018, and available inventory has doubled since May 2022. It's not just the type of house on the market causing this change, either - the price-per-square-foot of homes in the area has declined by 15% since the market's peak.

1. Collier County: $70,000 decline

Our largest value decline brings us to the southwestern corner of the state on the Gulf Coast. Collier County has long been one of the priciest areas of the state, but the market sent that into overdrive when median prices rose from $335,000 in November 2019 to $650,000 in May of 2022. They've since retreated by $70,000, or roughly 11%.

Of all three counties on this list, Collier is perhaps the most volatile. In May of 2022, nearly 70% of the homes listed for sale in the area were off the market in less than two weeks, with a median of just eight days on the market before being sold. Those figures have since returned to reality, with the median home now taking 39 days to sell - a little under a 400% increase in time spent on the market since the frenzied peak in the area.

None of this is great news for those who bought at the peak of the market. According to CNBC, the average first-time homebuyer put just 7% down on a home in 2022. Accounting for closing costs and other fees, 10% drops in value like those seen in these counties would put those buyers underwater by about 5% of their home's value.

Data shows statewide inventories growing in nearly every county while price-per-square-foot values are declining by 5-15% in most Florida counties. Based on that information, declines in value may continue for at least the near future.