Florida homeowners are paying some of the highest insurance premiums in the nation, and many are going uninsured. At the same time, the housing market is feeling the squeeze in other ways. Sellers currently outnumber buyers by more than 600,000, yet this gap has not caused home prices to drop. Instead, home price growth has slowed, leaving many would-be buyers stuck on the sidelines, either unable to afford the homes on the market or waiting for mortgage rates to come down.
The uncertainty is affecting investors as well. Many are nervous about making a profit under current market conditions. In fact, nearly one in 10 homes sold by investors in December 2025 sold at a loss, up from 7.1 percent a year earlier, according to Redfin.
Investor Activity in Florida
Across the country, investor home purchases were up two percent in the fourth quarter of 2025, totaling just under 500,000 homes. Redfin counts both institutional and mom-and-pop investors in this number. This marked the eighth straight quarter of minimal changes in investor activity, showing how much the market has shifted since the pandemic homebuying frenzy.
Florida tells a different story. Investor activity in the state has declined, especially in markets that overheated during the pandemic. Purchases fell 16 percent in Orlando, the biggest decline among the 38 most populous U.S. metro areas Redfin analyzed. Fort Lauderdale followed with a 15 percent drop, Jacksonville was down seven percent, and other cities like Las Vegas and Nashville also saw notable declines.
The main reason for the slowdown is simple: the Florida market cooled significantly after the pandemic. The state boomed when low borrowing costs, remote work, and rising demand from newcomers fueled homebuying. But as mortgage rates more than doubled and employers issued return-to-office orders, demand softened. That, combined with a surge in new construction and inventory, has led to months of year-over-year price declines.
Florida-Specific Challenges
Investing in Florida is also getting more expensive. Home insurance costs and homeowners association fees have skyrocketed, making it harder to turn a profit. For those renting properties, declining rents in many areas reduce the upside even further.
That does not mean investors are avoiding Florida completely. West Palm Beach, often called Wall Street South, is seeing investor purchases up 17 percent year over year in the fourth quarter of 2025. Luxury home sales are booming there even as pending sales nationwide fell slightly.
Outside Florida, investors are eyeing expensive West Coast cities. Seattle saw investor purchases jump 37 percent, Portland rose 27 percent, Milwaukee and San Francisco were up 24 percent, and Providence increased 20 percent.
What Experts Are Saying
Chen Zhao, Redfin’s head of economics research, explained that some investors are holding back, which reduces competition for first-time buyers. The pandemic-era investor frenzy that crowded out everyday buyers has mostly fizzled. High costs remain an obstacle, but investors are no longer a driving force in many markets.
President Donald Trump has proposed banning some institutional investors from purchasing additional single-family homes, though experts are skeptical about whether this would meaningfully improve affordability or inventory levels.
Redfin’s study shows investors still purchased 18 percent of homes sold in the fourth quarter of 2025, unchanged from a year earlier.
The Takeaway
Florida’s real estate market is in a state of adjustment. Insurance costs remain high, buyers are cautious, and investor activity has cooled significantly in many cities. For now, home price growth has slowed rather than dropped, and both residents and investors are navigating an environment that requires patience, careful planning, and a keen eye on costs.
