A perfect storm of overbuilding, high rates, and climate fears decimates demand
Once hailed as the crown jewel of Florida’s pandemic real estate boom, Miami is now experiencing a sharp and painful bust. Fueled by a perfect storm of overdevelopment, unaffordable mortgage rates, climate-related insurance nightmares, and a crumbling inflow of new residents, the Magic City’s housing market is unraveling at a breathtaking pace.
New real estate data shows Miami has the widest seller-to-buyer gap in the country, nearly 198%. With more than 21,000 homes on the market and fewer than 7,300 active buyers, Miami tops a growing list of metro areas where supply vastly exceeds demand.
And the numbers are getting worse.
Buyers bolt, inventory surges, and prices start to crack
Miami’s homebuyers are pulling back and fast. A Redfin report reveals a 17.9% cancellation rate for pending home sales in March 2025, up from 16.1% the year prior. Homes now linger an average of 66 days on the market, far longer than the national average.
What’s driving the exodus?
• Mortgage rates remain stuck near 7%, pricing many out of the market.
• Property insurance premiums have skyrocketed after back-to-back hurricane seasons.
• Homeowners association (HOA) fees and taxes are choking affordability for would-be buyers.
The first questions from out-of-staters are: "How bad are the hurricanes? How high are the insurance rates?" says Florida-based Redfin agent Bryan Carnaggio.
Meanwhile, developers who once raced to build during the pandemic are now slashing prices, offering incentives, and holding on to unsold inventory.
‘It just doesn’t feel like home anymore’
Florida’s once-irresistible appeal has dulled. While still drawing retirees and remote workers during the pandemic-era boom, the tide has turned.
Zach Janik, a former Florida resident, recently sold his St. Augustine home, gaining 77% in under five years, and moved to Hershey, Pennsylvania. “It just doesn’t feel like home anymore,” he told Calle Ocho News. His story mirrors those of many: lured by low costs, forced out by rising expenses, and disillusioned by overdevelopment.
Florida’s net domestic migration fell sharply in 2024, with Miami losing more than 16,000 residents. Analysts predict that prices, currently stable in parts of Miami-Dade, could plunge if demand fails to rebound. Realtor.com economist Joel Berner said, “The momentum… is waning, with prices down and time on market up this spring.”
What comes next? Slow recovery or prolonged slide?
Real estate experts say Florida, particularly Miami, may not have hit bottom yet.
“There is a ton of supply like, a ridiculous amount of supply,” said Parcl Labs CEO Trevor Bacon. Despite bullish talk from some builders and local officials, the numbers tell a stark story: sales are down 50% from the pandemic peak and 30% below March averages.
Many owners and sellers have yet to adjust. “Sellers have been caught up in this thing of, ‘I can put whatever price I want on my home,’” said one Naples agent. “Now all of a sudden they’re going: ‘Oh, crap. People aren’t buying, and people aren’t even looking.’”
As the Sunshine State struggles to find a new equilibrium, the coming months may prove decisive for its once-booming real estate market.
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