Florida and Texas housing market “dominoes” have fallen—Real estate analyst

A surge in inventory in Florida and Texas is likely to cause significant price declines in the two states’ housing markets, according to real estate analyst Nick Gerli, while home prices in the Northeast are still appreciating.

The Florida and Texas “dominos have fallen,” Gerli, CEO of real estate analytics tool Reventure App, wrote on X on Monday.

Why It Matters

The Florida and Texas housing markets boomed during the pandemic, when the two states received an influx of out-of-state people moving from colder, more expensive regions of the country.

To match that growing demand, the two states started building more homes than anywhere else in the nation in the past few years; however, in-migration has slowed down since the end of the pandemic, and the markets that exploded during the health emergency are now facing the most dramatic cooldowns in the country.

What to Know

According to data from Reventure App, Florida and Texas had a total of 261,000 active listings combined in January 2025, 207 percent more than the number reported in the entire Northeast. The states in the Northeast reported a combined 85,000 active listings in the same month.

“Prior to the pandemic, these regions were the same,” Gerli wrote on X, adding that the gap between the two “highlights the very bifurcated nature of this housing market. The downturn is happening in TX/FL, but we are still suffering a historic inventory shortage in the Northeast.”

According to Gerli, a likely downturn of the Texas and Florida housing markets is being underreported because “many real estate outlets don’t want to admit the TX/FL dominos have fallen, as those are the states with the most realtors, investors, wholesalers, and people who buy housing market-related.”

The Northeast, Gerli said, has “little investor and realtor activity” compared to Florida and Texas, “so it’s not much of a sell to talk about the outperformance.”

What People Are Saying

Redfin economist Chen Zhao previously told Newsweek that she expects Florida and Texas to be the best markets for U.S. homebuyers this year: “Buyers in the weaker Sun Belt markets such as Florida and Texas may be able to negotiate the best deal and have the most selection. In other markets, inventory will be lower and there will be less room to negotiate.”

Moody’s Analytics economist Matthew Walsh previously told Newsweek that the overvaluation of Florida during the pandemic makes the state an interesting one to watch this year for buyers: “Home prices there have risen very quickly and have kind of exceeded the pace we would expect home prices to grow at given economic fundamentals in the state for that income growth and household formation. And that disconnect really does weigh on prices when demand starts to cool.”

What’s Next

A downturn of the Florida and Texas markets is not all doom and gloom for Gerli; in fact, the real estate analyst said, it represents an opportunity for these two states.

“What many in the real estate industry fail to realize is that a downturn in the Sun Belt will actually be a good thing for the housing market in the long-term,” Gerli said. “Because more inventory and cheaper prices will ultimately be what draws buyers back into the market.”

In order to attract homebuyers back in the market, Gerli wrote, prices need to come down. “For prices to drop, inventory levels need to go up enough to force sellers into meaningful price reductions. In South and Texas/Florida more specifically, that’s happening,” he said.

“In [the] Northeast, it’s not. Too few homes for sale means high competition and even bidding wars, still.”