The outlook for St. Pete’s residential real estate market

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The residential real estate sales market in St. Petersburg has certainly slowed. Gone, at least for now, are the days when there were multiple offers on homes the day they went on the market.

In turn, sales prices for many homes have been dropping as sellers get anxious. What does this mean for 2026?

Since my firm, Silvestri Law, does a significant amount of title work for residential sales in the area, I keep in close touch with many realtors around St. Petersburg. I asked them about the outlook, and heard four dominant themes from the 12 professionals who gave me their thoughts:

1. The recent drop in mortgage rates has helped the market slightly, but more cuts are needed to spur activity.

Respondents think we need to have mortgage rates in the range of 4.5 to 5 percent to provide an impactful boost to the market. (The average rate nationally for a 30-year fixed-rate mortgage is around 6.2% right now.) Many potential buyers are on the sidelines, because they don’t want to give up the low rates they have on their current mortgages.

Also, the combination of higher rates and higher prices creates a higher monthly mortgage payment that may be out of reach for many buyers. And though prices have been dropping, many potential buyers are waiting to see if prices fall further before they decide to act.

“Homes are staying on market longer and prices are deflating, but not at an alarming rate of decrease,” said one respondent. “Probably where they should have been in many cases.”

2. Hurricanes are always on buyers’ minds in Florida, but the major impact from our storms has been the challenging situation with property insurance.

The uncertainty and cost of property insurance is hurting Florida’s appeal for potential buyers from out of state. Several realtors noted that hurricanes are a fact of life in Florida that many buyers are willing to deal with, but the rising cost of property insurance is a major concern.

Of course, there is no easy fix for this issue. Even though new companies are forming to take policies from the state-run Citizens provider, there has not been a significant positive impact on rates for homeowners.

3. Realtors expect the St. Petersburg residential real estate market to normalize going into 2026, but the days of wild appreciation of homes are over.

“Affordability is the biggest issue, I think, preventing buyers from pulling the trigger,” said one respondent. “Twenty percent appreciation per year is not sustainable if we want to have a vibrant real estate market in which people are able to move and afford their first home.”

The respondents expect more interest rate cuts as we head into the New Year, and they expect more buyers to decide it’s time to buy as home prices stabilize.

4. Florida continues to be a draw for many out-of-state buyers, and St. Petersburg is a bright spot.

With our vibrant downtown, beaches and accessibility to quality airports, St. Petersburg has advantages over many Florida cities. And while some potential buyers from out of state are looking elsewhere due to concerns about property insurance or storms, there are still plenty of folks looking to get to a place where the sun shines all year.

In summary, there are certainly reasons for concern about St. Petersburg’s residential real estate market, but the sky isn’t falling.

“Tons of buyers are waiting for rates to come down – boomers are locked into excellent rates or paid off,” said one respondent. “Lots of uncertainty and distrust; no one knows where to invest. But even with a .25 decrease in rates I had multiple offers on a beach condo after having no activity all summer.”

Larry Silvestri is president of St. Petersburg-based Silvestri Law. The firm works in the real estate transactions sector, including commercial leases, title insurance and closings.