Just a couple of years ago, Florida was the center of the U.S. housing boom. Homebuyers were flocking to cities like Sarasota, Naples, and Cape Coral in search of lower prices, warmer weather, and more space during the pandemic.
Today, that heat has fizzled out.
According to Bankrate’s 2025 Housing Heat Index, Florida is now home to four of the five coldest housing markets in the country.
Those include Cape Coral-Fort Myers, Punta Gorda, North Port-Sarasota-Bradenton, and Naples-Marco Island.
The Sun Belt Boom Has Faded
Jeff Ostrowski, a housing market analyst at Bankrate, told Business Insider, “During the pandemic, Northeasterners were fleeing for the Sun Belt, but that trend has slowed and even reversed.”
He added, “There’s just not a lot of inventory [in the North], and with limited choices, buyers are bidding up prices.”
Meanwhile, many Southern markets, especially in Florida, are seeing homes sit on the market much longer.
Ostrowski shared, “I visited a number of open houses in that market a few months ago, and I saw a lot of lonely listing agents sitting in kitchens and waiting for buyers to come through.”
Why Florida Is Cooling Down
Several factors are working against Florida’s housing market. The cost of home insurance and property taxes has surged, making homeownership more expensive.
At the same time, an oversupply of new construction has hit the market just as buyer demand has weakened.
Lawrence Yun, chief economist at the National Association of Realtors, pointed to supply as a key reason for the slowdown: “Southern states are seeing cooling in regard to prices, especially in Florida and Texas, partly due to the fact that they have built much more in relation to the New England states. So, it is really about supply.”
A Buyer’s Market in the Sunshine State
In cities like Cape Coral-Fort Myers and North Port-Sarasota-Bradenton, homes that once sold quickly are now lingering.
According to Bankrate, Cape Coral-Fort Myers dropped from third place in 2023 to dead last in 2025 among 212 metro areas. It now ranks at the bottom for home appreciation, active listings per 1,000 residents and median days on market.
Buyers are still cautious, mainly due to high mortgage rates and affordability concerns.
But the shift has given them more leverage.
Jake Krimmel, senior economist at Realtor.com, said, “It’s gonna take someone [buyers or sellers] to give in to that standoff to make sure that these deals can be made.”
The Northeast and Rust Belt Are Heating Up
As Florida cools, places like New Haven, Connecticut; Rockford, Illinois; and York-Hanover, Pennsylvania are heating up.
Bankrate’s data shows these markets have tight inventory, rising prices and faster sales.
New Haven jumped from 82nd in 2023 to first place in 2025. Rockford moved from 196th to second.
These areas may not have Florida’s weather, but they’re attracting buyers with affordability and opportunity.
“The Midwest offers that opportunity [to buy] because of affordability,” Yun said. “Compared to the rest of the country, the Northeast just lacks supply.”
A Cooling Off, Not a Crash
Despite the dramatic drop in Florida’s rankings, housing experts say this isn’t a market crash.
Instead, it’s a recalibration after years of overheated growth. Rising supply and affordability fatigue are giving the market room to breathe.
“The job growth migration is still solid,” Yun said. “It’s just that temporarily there’s an oversupply, and it’s not being translated into housing demand because of high interest rates. Once interest rates decline meaningfully, it could switch from housing surplus in the Southern states to a housing shortage again.”
For now, though, Florida’s real estate market feels quiet.
And as Ostrowski observed, some agents are still waiting by the kitchen table for someone to walk through the door.