Five metro areas are at huge risk of a housing market crash in 2025. It is no surprise three are in Florida but two are in a Sun Belt State.
A study based on January figures lists Winter Haven, Tampa, and West Palm Beach among the top five U.S. markets most likely to see home price declines in 2025.
Phoenix, AZ is at number two on the list and Tucson, AZ at four. All have over a 70 percent chance of experiencing a drop, according to the new study by CoreLogic.
Florida’s housing market downturn is being driven by a sharp decline in demand, coupled with an increasing number of residents looking to leave the state.
Migration from other states has slowed significantly since the pandemic, while rising home prices and high mortgage rates are making it harder for buyers to enter the market.
Additionally, soaring homeowners association (HOA) fees and rising property insurance costs — fueled by an increase in natural disasters — are not only deterring buyers but also encouraging the exodus.
All five metro areas have already seen recent price declines. ‘Further price deceleration is ahead,’ said CoreLogic chief economist Selma Hepp.
‘While this year’s cold winter and large natural disasters play a role in dampening demand, falling consumer sentiment suggests potential homebuyers are wary of the short-term economic outlook and future inflation.’
Tampa, Florida, at high risk of facing a housing market crash this year says one report
The historic district in downtown Winter Haven, at risk for a housing crash this year
CoreLogic chief economist Selma Hepp
Many homes in Florida have been sitting on the market without going under contract, forcing sellers to slash prices in order to sell their home.
For instance, Tampa was a popular pandemic boomtown, but had a drop of 1.6 percent in sales between October 2024 and January 2025.
For Winter Haven, which also saw a spike in buyers in the pandemic, there was a 1.2 percent drop in home sales from October 2024 to January 2025.
West Palm Beach saw a 1.2 percent dip in sales between October 2024 and January 2025.
Those areas grew desirable for people because the weather and ability to work remotely drew people there.
CoreLogic economists predict that price growth will continue to slow in Florida, but one silver lining is that lower mortgage rates could encourage potential buyers to purchase a home.
‘Nevertheless, with the spring homebuying season upon us, the recent improvements in mortgage rates may help invite homebuyers back into the market,’ Hepp says.
There may be hope for West Palm in particular, the former ‘wrong side of the tracks’ area is filling with luxury developments, high-end restaurants, and major business investments fueled by an influx of financial and tech firms.
West Palm Beach has made the list of high risk of facing a housing market crash this year
Downtown Tucson, Arizona, listed for having a high risk of facing a housing market crash
Phoenix, AZ is number two on the list for areas facing pricing drops on homes in 2025
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Disturbing new sign that Florida's once-booming property market is continuing to tank
The combination of economic growth, lifestyle appeal, and investment activity can be enough to push home sales.
Elsewhere in Florida the housing market, the housing market is continuing to tank.
A surge of homes sat on the market for longer than average in December 2024, and that same month typical homes across the country spent 70 days on the market, nine days longer than the previous year.
That made it the slowest December in five years.
Florida cities with a lot of inventory sitting on the market for more than 90 days include New Smyrna Beach, Palm Coast, Panama City and Gainesville.
Meanwhile, another report out today highlighted how the housing market is increasingly divided in different parts of America.
Two homes in different parts of the country were listed for sale for close to $1 million at around the same time earlier this year.
The modest, ranch-style home in Wyckoff, New Jersey, got a whopping 25 offers and is already under contract for $200,000 above the original asking price.
Meanwhile, a six-bedroom behemoth in Miami with a three-car garage and a pool still has no bites, leading the sellers to cut the price.