Have Florida’s days in the real estate investment sun come to an end?

That appears to be the takeaway from a new report from brokerage/listing site Redfin, which showed Florida as one of the few states where investment activity—both mom-and-pop and institutional—has declined, while nationally, purchases were up about 2% year over year in the fourth quarter of 2025.

The Sunshine State has experienced a steep decline in investment activity, with major cities down double digits. In Orlando, the 16% year-over-year drop was the largest among the 38 most populous U.S. metropolitan areas Redfin analyzed. Fort Lauderdale was just behind with a 15% drop-off, while further north, Jacksonville was down 7%.

Redfin’s head of economic research, Chen Zhao, said in the report: 

“Some investors are keeping their pocketbooks closed, which eliminates competition for everyday first-time buyers. The pandemic-era investor frenzy that crowded out so many first-time homebuyers has largely fizzled. There are still obstacles for buyers, like high costs, but investors are no longer one of them—at least in many parts of the country.”

The Math for Investors

The reasons for the pullback from Florida are not hard to figure out: rising expenses and stalling rents. While this is true for much of the country, in Florida, those expenses are even more pronounced due to a steep rise in insurance costs. 

Bankrate’s March 2026 homeowners survey put Florida’s average premium at about $5,838 per year for a standard policy with $300,000 in dwelling coverage, more than double the U.S. average of $2,424.

That analysis shows that Florida’s typical homeowner pays roughly $3,400 more per year than the national norm, which is a killer for the modest cash flow that mom-and-pop investors rely on in the current era of high interest rates and rising taxes.

A separate analysis won’t give investors banking on appreciation much solace. Data and analytics site Cotality highlighted several Florida metros, from Cape Coral-Fort Myers to Punta Gorda, as among the most at risk of price declines over the next 12 months.

A Meaningful Rate Change Could Be Monumental

“Lower mortgage rates and more inventory are starting to bring sidelined buyers back into the market—and Florida stands to benefit more than most,” Jessica Lautz, deputy chief economist and vice president of research for the National Association of Realtors, told Yahoo! Finance. “Even a small drop in mortgage rates can unlock thousands of new buyers in Florida. A drop from 7% to 6% could introduce over 6,000 additional buyers each month into the Orlando market alone.”

Higher inventory and lower rates could also bring cash flow back into the equation, especially if price drops coincide with meaningful rate cuts.

But even though some of Florida’s markets are stuttering, it doesn’t mean every market in the state is a bad investment. As expected, Florida Realtors’ January 2026 outlook is rosier, specifically for homebuyers, describing the state’s housing market as moving onto “firmer ground.” It noted that sales have been rising consistently for the first time since rates began climbing in 2022 and that listings are being absorbed.

Where Investors Can Still Cash Flow in Florida

However, for investors, the question is ROI, which is more likely to be found inland, in North and Central Florida, away from the overheated coastal markets.

Multifamily & Affordable Housing Business’s 2025 outlook identified Jacksonville as a strong investment market, driven by affordability, new jobs, and household growth (the increase in occupied housing units). A brokerage-based investing guide on emerging Florida submarkets notes that North Central Florida, specifically Ocala and Gainesville, has appealing rent-to-price ratios and relatively lower insurance and tax burdens than the coastal southern part of the state. It also mentioned stable employment and lower-priced properties that can potentially clear $600-$900 in monthly cash flow.

Other States Are Filling Florida’s Void

As major markets in Florida lose some of their shine, Redfin’s data shows investors gravitating to a diverse mix of markets, including parts of the West Coast, the Carolinas, and affordable “refuge” metros in the Northeast and Midwest. These include markets such as:

• Seattle (investor activity up 37% year over year in the fourth quarter of 2025)
• Portland, Oregon (up 27%)
• Milwaukee (up 24%)
• San Francisco (24%)
• Providence, Rhode Island (up 20%)

However, investments in many of these markets are there for very different reasons. Pricey West Coast markets are attracting deep-pocketed landlords betting on high rental demand driven by the artificial intelligence (AI) boom and tech companies’ return-to-office mandates. Many investors are institutional or wealthy individuals, the Redfin report notes, who can pay cash.

To this end, the report stated that most investor purchases of high-end homes in the luxury market increased 5% year over year as of the fourth quarter of 2025, making it more competitive than the non-luxury market.

Final Thoughts

If you are looking for investing options other than Florida’s coastal markets, it’s best to compare apples to apples. That excludes the high-priced West Coast tech markets. Instead, refuge markets mentioned in Realtor.com’s 2026 Economic and Housing Market Update, as well as other Sunbelt markets in North and South Carolina, will allow you to compare price points and cash flow stats, as well as economic data, jobs, and more with nonperforming Florida markets and find a market that suits your budget. Crucially, markets in economically robust metros where buyers can negotiate a deal are golden for cash flow.

If you are intent on investing in Florida but struggling to make home insurance numbers work, a recent New York Times article reveals that your credit score is often a big factor in predicting your homeowner’s insurance cost.

Zillow’s three biggest buyer-friendly markets for 2026 are Indianapolis, Atlanta, and Charlotte due to lower competition and cooling home values. Jacksonville, Memphis, and Detroit also get honorable mentions, as do other markets in the Sunbelt and the Midwest. 

Fittingly, some of these also coincide with BiggerPockets’ Top Five Cash Flow Markets for Investors in 2026.