Is Florida Melting?
Welcome all. I’m your host, Victor Menasce. On today’s show, we’re taking a look at the residential homes for sale inventory across a few markets in Florida. There’s been an enduring so-called lock-in effect, with many owners holding on to very favorable loans due to the historically low interest rates. When the need to move arises, rather than sell, they’ll often opt to rent out their primary residence and then lease a second home, in lieu of buying and bearing the burden of a much higher interest rate required when purchasing a new property. It looks as though the lock-in effect is starting to show signs of fading, as the number of homes for sale is rapidly on the rise in several markets.
We want to investigate this trend as the residential market significantly contributes to the rental property inventory. In the condo market, in particular, we’re seeing that a large proportion of condos are being offered for rent by owners of single-unit portfolios or even larger portfolios. Conventional wisdom estimates that somewhere between 20-25% of the condo market feeds into the rental market inventory.
Florida, once bustling with high demand, is now witnessing something akin to a meltdown. The condo and townhouse market in Florida is experiencing an overwhelming 9.7-month supply spanning across the state. While the coastal market challenges are well documented, it appears cities like Orlando aren’t exempt from this downturn either. Orlando’s inventory in April of 2025 was about 30-40% higher than the previous year, substantially increasing the pool of available homes.
The situation is similar with Miami’s condo market, which, as of March this year, has seen a significant inventory increase. Accumulated data from the Orlando Regional Realtor Association places approximately 12,411 homes up for sale in the central Florida region. This inventory — inclusive of condos, single-family homes, and townhouses — amounts to about seven months of housing availability. For condos specifically, we’re eyeing approximately 1,356 units for sale in Orlando proper.
Shifts in new housing regulations, especially in response to the devastating Surfside tower collapse of 2021, have significantly impacted Florida’s condo market. Towns along the Atlantic Coast, such as Orlando and Miami, Fort Lauderdale, Palm Beach, Jupiter, and Boynton Beach, have been particularly affected. The new mandate necessitates mandatory structural inspections and reserve studies, with buildings that are three stories or taller and over 30 years old being required to undergo milestone inspections and subsequent inspections every decade.
There are newly established rules for homeowner associations too. Board members must now receive appropriate training, hold quarterly meetings, and provide online access to records for associations housing 25 or more units. With penalties for non-compliance, fraud, and kickbacks, these stricter controls are enforcing safety codes, hurricane-proofing measures, and updated insurance requirements.
These problems aren’t cyclical; they’re structural. The very crux of what we’re witnessing in the market today is a dramatic reversal of what we saw just a few years ago. To further compound these issues, Florida’s insurance costs have skyrocketed, partly driven by increased storm activity. As a top-tier residential state, it’s becoming more expensive for folks to live in Florida because of these structural issues, and that’s bound to exert significant downwards pressure on a state with more than 20 million residents.
In the coming days, we’ll be tackling a few other markets around the United States to understand what’s happening in terms of market inventory. As we wrap up today’s episode, have an awesome rest of your day and continue to make great things happen. Until tomorrow.
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