Cancellations Surge Amidst Cooling Trends

+ Florida's New Billionaire Haven

March 12, 2025

Hey, folks! Florida's real estate market is undergoing some significant cooling, and we're witnessing a dramatic rise in cancelled deals across the Sunshine State.

In this week's issue:

📉 Cancellations surge amidst cooling trends
💎 Manalapan emerges as a hotspot for the ultra-wealthy
🏘️ The Top 10 buyer and seller markets in the US
📋 DeSantis wants to eliminate Florida property taxes"

…and a meme reflecting the latest public sentiment on Florida’s real estate.

First time reading? Subscribe for free here.

FLORIDA HOUSING MARKET BALANCE

Sales to listings ratio: 0.118. A balanced market typically has a total sales to total listings ration between 0.12 and 0.2.

STORY OF THE WEEK

Cancellations Surge Amidst Cooling Trends

There's a significant shift in Florida's housing market, with a notable increase in cancellations of home-purchase agreements. According to Redfin, over 41,000 agreements fell through nationwide in January, with Florida recording some of the highest cancellation rates.

Key trends and factors influencing the market:

Increased cancellations: Orlando and Jacksonville are experiencing high cancellation rates, signaling a cooling market.
Rising inventory: Florida's housing inventory is at its highest level since 2021, with 172,209 homes for sale in January, a 22.7% increase year-over-year. This gives buyers more options and makes them more likely to back out of deals if issues arise.
Price corrections: Experts anticipate a modest price correction in Florida throughout 2025, particularly in markets with oversupply.
Shifting market dynamics: Markets are shifting in favor of buyers due to increased inventory and cautious buyer sentiment amidst elevated mortgage rates.
Cooling demand: Pending home sales in Florida have decreased by 9.3% year-over-year in January, further contributing to the growing inventory.

Number of homes for sale in Florida: January 2024 vs January 2025

Factors contributing to market weakness:

End of migration surge: The influx of out-of-state buyers seen during the pandemic is slowing, impacting home prices.
Increased costs for condo owners: New safety regulations have led to higher HOA fees and special assessments, affecting condo prices. Condo prices are declining in 92% of Florida's housing markets.
Hurricane impact: Hurricane Ian caused significant damage and increased insurance premiums, leading to market softening in Southwest Florida.
Home insurance shocks: Rising insurance rates, combined with increased home prices, have made housing less affordable.

While some experts predict slight price declines in specific markets, continued population growth and tax-friendly policies may prevent steep drops in home values. Researchers at Norada Real Estate Investments still expect a 4% to 6% year-over-year increase in median home prices in Florida by the end of the year, though this could change if mortgage rates spike.

MARKET SPOTLIGHT

Manalapan Emerges as a Hotspot for the Ultra-Wealthy

Manalapan, a small coastal town with just 400 residents, has become Florida's newest ultra-luxury hotspot. It's now attracting some of America's wealthiest individuals.

What's Driving the Trend?

Record-Breaking Listings: A $285 million estate project and an $87 million oceanfront compound have made headlines.
Exclusive Properties: Many homes feature both ocean and Intracoastal Waterway frontage, offering ultimate privacy.
High-Profile Residents: Notable residents include Larry Ellison, Sean Hannity, Tony Robbins, and Billy Joel.

Why Manalapan?

Exclusivity & Accessibility: A rare combination that appeals to the ultra-wealthy.
Private & Secure: Properties often include private tunnels connecting ocean and Intracoastal sides.

Manalapan is no longer a hidden gem; it's becoming the go-to destination for billionaires seeking luxury and seclusion in Florida.

VISUAL OF THE WEEK