Florida’s housing market is splitting into distinct tiers. At the top, luxury homes are holding their value. At the entry level, homes under $400,000 are selling quickly. But in the middle – where most buyers and sellers operate – prices are compressing, and the gap between a $400,000 home and a $600,000 home is narrowing rapidly.
Matt Mobley, broker and owner of Hancock Realty Group in Claremont, Florida, has tracked this trend for three years. He’s watched homes that sold for $750,000 two years ago now close at $675,000. Properties that fetched $550,000 are now selling for $499,000. The top and bottom of the market are stable, but the middle is under pressure.
“The middle is where all the pressure is,” Mobley says. “The bottom is holding, the top is holding, but the middle is compressing.”
This compression is changing what buyers can afford and what sellers can expect. If you’re in the middle of the market, the rules have changed.
Why the Middle Market Is Under Pressure
Three main factors are squeezing Florida’s middle market, and none are easing.
First, mortgage rates have climbed from the low 3 percent range during the pandemic to the mid-6 to low-7 percent range today. This has sidelined move-up buyers – homeowners who would typically sell their current property to buy something larger or newer. With a 3 percent mortgage locked in, few are willing to trade up to a 6 percent rate.
“We don’t have a move-up buyer right now,” Mobley says. “Anyone with a 3 percent mortgage doesn’t want to give it up to take on a 6 percent mortgage.”
As a result, buyers who would have considered $600,000 homes are staying in their $450,000 homes, unwilling to accept much higher monthly payments. They’re not moving unless necessary.
Second, new construction is pulling buyers away from resale homes. Builders are pricing new homes in the $500,000 range but offering financing incentives that lower monthly payments, sometimes making a brand-new $500,000 home more affordable per month than a $450,000 resale. This is drawing buyers out of the middle resale market.
Third, demand at the bottom remains strong. Homes under $400,000 are still selling quickly, supported by first-time buyers and renters moving into ownership. These buyers can still manage the payments, creating a price floor. Prices below $400,000 aren’t dropping.
But in the middle, there is no such floor. Sellers are forced to cut prices to compete with builder incentives and a shrinking pool of buyers, while those buyers are less willing to stretch for homes that don’t feel worth the payment.
How Compression Shows Up in the Market
Two years ago, a $550,000 home in Claremont would sell in a few weeks, often with multiple offers. Now, that same home sits for a month or more unless the price drops to $499,000 or below. The meaningful difference that once existed between a $400,000 and a $500,000 home – such as a bigger lot or extra bedroom – has shrunk. Sellers at $500,000 now compete directly with those at $475,000 and $450,000, all chasing a limited group of buyers.
Homes that were $750,000 two years ago are now closing in the mid-$600,000s. This isn’t a dramatic crash, but a steady decline as sellers test the market, wait, then reduce prices to attract buyers.
“Homes that were $550,000 are now $499,000,” Mobley says. “The difference between a $400,000 home and a $500,000 home is much less than it used to be.”
Meanwhile, the luxury and entry-level segments remain stable. Buyers above $800,000 are typically less sensitive to mortgage rates and continue to purchase, supported by strong stock market performance. At the bottom, homes under $400,000 are moving quickly due to steady demand and tight inventory.
What Buyers in the Middle Need to Know
If you’re shopping between $450,000 and $700,000, you have more negotiating power than in recent years. Sellers are willing to negotiate, and homes are taking longer to sell, giving you time to make decisions.
Make offers below the asking price, especially if a home has been on the market for more than two weeks. Sellers in this range are under pressure from both new construction and price cuts from other sellers. They are more receptive to negotiation.
Ask for assistance with closing costs or repair credits. Two years ago, these requests were often rejected, but now many sellers offer them upfront to close deals.
Don’t rush. The days of bidding wars in the middle market are over. Take your time comparing homes before making an offer.
Pay close attention to new construction. Builders are offering low-rate financing that can make a $500,000 new home cheaper per month than a $450,000 resale. But these rates are often adjustable and will reset. Make sure you can afford the payment when the introductory rate ends.
What Sellers in the Middle Should Do
If you’re selling a home in the $450,000 to $700,000 range, price it competitively from the start. Overpricing leads to extended time on the market and price reductions, which can signal problems to buyers.
Homes in top condition with modern finishes are still selling, but dated or repair-needed homes are selling for less, and investors are less active due to high financing costs.
Offer upfront concessions, such as closing-cost credits, home warranties, or repair allowances, to make your listing stand out.
Stage your home and use professional photos. Buyers are comparing your property to new builds with model-home finishes, so presentation is critical.
If you’re competing with new construction nearby, expect to price 20 percent below the builder or face extended time on the market.
The Bottom Line
Florida’s middle housing market is compressing. Homes that sold for $550,000 two years ago are now closing at $499,000, and the gap between entry-level and mid-tier prices is shrinking as sellers cut prices to compete with new construction and fewer buyers.
If you’re buying in the middle, you have leverage. If you’re selling, price aggressively or expect to wait. “The middle is where all the pressure is right now,” Mobley says. “The bottom is holding, the top is holding, but the middle is compressing.”
This article reflects current housing trends, not legal, financial, or investment advice. Market conditions will vary by neighborhood and property type.
