The Party, and the Hangover

Between 2020 and 2022, an unusual number of forces pushed in exactly the same direction at exactly the same time. Any one of them would have lifted prices. Together they produced something closer to a mania.

• Interest rates fell to the lowest levels in the history of the American mortgage market, briefly under three percent. A buyer's purchasing power is set by the monthly payment, not the price. Cut the cost of borrowing roughly in half and the same payment buys a substantially more expensive house.
• An extraordinary volume of money entered the economy through the pandemic response. When every buyer in a market receives more spending capacity at the same moment, that extra capacity does not stay with the buyers. It goes into the price.
• Lockdowns moved people between states. Florida was open when much of the country was not, and hundreds of thousands of people relocated here on the strength of that difference.
• Remote work severed the link between where people earned and where they lived. A salary set in New York or California could buy a great deal more house in Central Florida.
• Short-term rental speculation surged, amplified by social media, and Central Florida was one of its epicenters.
• Institutional and cash buyers entered residential real estate at scale, competing directly with families.

By 2021 I was watching buyers waive inspections. Waive appraisals. Pay cash, sight unseen, above asking, in competition with a dozen others. I had seen that behavior before, in 2005 and 2006, and I knew what it meant. When people stop protecting themselves in a transaction this large, it is not because the risk has gone away. It is because they are more afraid of missing out than of losing money.

That is not a market. That is a bidding contest with a deadline nobody announced.

When a country prints money at that scale — something the United States can do in a way no other nation can, because the dollar is the world's reserve currency — the effect is not that everyone becomes wealthier. The effect is that assets rise while the purchasing power of each dollar falls. It feels like wealth. For anyone who already owned assets, it partly was. But it is a psychological wealth as much as a real one, and it cannot be sustained indefinitely.

The Federal Reserve eventually raised rates to slow it down. By then the prices had already been set.

I want to spend a moment on something that is not about real estate at all, because I think it explains more owner frustration than any market statistic.

Human memory is not neutral about the past. Psychologists call it rosy retrospection — the well-documented tendency to remember past periods more favorably than we experienced them at the time, with the effect growing stronger the further away the memory gets. The good years feel better in recollection than they did in the moment.

Layered on top of that is anchoring, first documented by Amos Tversky and Daniel Kahneman. Once a number is in our heads, we adjust away from it far less than we should — even when we know the number is out of date. For a property owner, the anchor is usually the peak rent achieved, or the purchase price, or what the neighbor got in 2022.

And underneath both sits loss aversion: the pain of giving something up is felt more sharply than the pleasure of an equivalent gain. Research on housing markets finds this combination reliably produces the same behavior — owners overprice, hold out for a number the market has stopped paying, and treat the delay as temporary rather than as information.

I raise this not to lecture anyone. I raise it because I feel it too. I remember leasing homes in three days at rents that seemed almost embarrassing to ask for. That memory is vivid and it is only four years old. It is also gone, and every month spent waiting for it to return costs real money that is never recovered.

The owners who will do well over the next few years are the ones who can look at today's number instead of the remembered one.

If your property is anywhere near new construction, you are not primarily competing with the house down the street. You are competing with a homebuilder that has a sales office, its own mortgage arm, a marketing budget, and a balance-sheet reason to move a specific house this quarter.

That competitor is under real pressure. Nationally, new-home supply now sits near 9.6 months, and completed, ready-to-occupy inventory has climbed above 120,000 units — a level not seen since the years immediately after the financial crisis. Roughly 37 percent of builders cut prices outright in July, and close to two-thirds are running incentives of some kind.

But notice what they mostly do not do: cut the sticker price. A public price cut angers every buyer who closed last quarter and damages the comparable sales the builder needs for the rest of the community. So the money moves somewhere less visible and more powerful — into the monthly payment.

• Rate buydowns, permanent or temporary, through the builder's affiliated lender. This is the most effective tool available, because it attacks the payment directly.
• Closing cost credits, usually conditioned on using that lender.
• Design center allowances and included upgrades, which let the builder discount using materials bought at wholesale.
• Quick-move-in pricing on finished inventory that is costing them interest, taxes, insurance and dues every month it sits.

A private seller cannot match any of it. You cannot buy down a stranger's interest rate. You cannot credit closing costs through a captive lender. You cannot lose money on one house because the subdivision as a whole is profitable.

And in some areas this is not a passing phase. Sunbridge, the development spanning the St. Cloud side of our market, is permitted for as many as 30,000 residential units. At the pace homes are actually being delivered there, that pipeline runs for decades. Any plan that depends on waiting for the builders to sell out is a plan with no end date.

Prices across the region have not collapsed. What has collapsed is velocity — the speed at which anything trades.

Listings sit. Reductions stack. Pending sales fall through. Inspection and appraisal contingencies are back in every contract, and once a home goes under contract, the renegotiation begins in earnest. Buyers who spent 2021 waiving their protections are now using every one of them.

Several things are holding buyers back at once:

• Affordability, plainly. Mortgage rates have sat in the mid-six percent range through the summer, near the top of their twelve-month band. Prices set in a three-percent world do not clear in a six-and-a-half-percent world.
• Wages have not kept pace, and inflation has eaten into what each paycheck buys. Younger buyers in particular have been priced out of the market their parents entered easily.
• Genuine anxiety about employment, including about how artificial intelligence will affect the careers people trained for.
• A cultural shift. Social media is now full of people who bought at the top in 2022 saying loudly that they regret it. Whatever you think of that as analysis, it is enormously effective as persuasion. Buyers are hearing "wait" from every direction.

The result is a market where buyers believe prices are still too high and simply decline to participate. And because buyers are choosy now, they choose carefully: a fully renovated, move-in-ready home sells while the identical house needing updates does not. Homes built in the 2000s and 2010s are being read by buyers as old unless they have been brought to current standards.

That matters for anyone thinking of selling their rental. The days when any property would sell because someone was afraid of missing out are over. If your home needs updating, you have three options, and only two of them are real: spend the money out of pocket before listing, accept a price that reflects the work the buyer will have to do, or sit and wait for an offer that never arrives.

Today’s buyers do not have the spare cash to renovate after closing. Most of what they have went into the down payment and the higher monthly payment. And even the ones who could afford it often do not want the disruption, or do not have the time or the appetite to manage a renovation. They are looking for a home that is finished.

We have watched this play out with our own clients more than once now. An owner takes the property off the rental market to sell it. It sits. Months pass with no rent coming in and the carrying costs continuing. Eventually they make some modest updates, come back to us, and put it back on the rental market — having lost an extended period of income that cannot be recovered, and having spent money on improvements anyway. The outcome they were trying to avoid arrived by a more expensive route.

This is the connection most owners have not yet made, and it is the reason I am writing to you.

When a home does not sell, its owner eventually faces a choice: cut the price to what the market will actually pay, or rent it out and wait for a better day. A large and growing number are choosing to rent.

Zillow found that 2.3 percent of homes listed for rent nationally had recently been listed for sale — the second-highest share in its six-year record. Texas and Florida carry the largest concentrations of these owners in the country. Their economists also noted the conversion accelerates in the autumn, as sellers give up ahead of the holidays. That is the window we have just entered.

These homes do not enter the rental market gently. They are single-family houses in good school zones, often owned by someone who does not need the income and simply wants to avoid taking a loss on the sale. That owner will accept a lower rent than a professional operator would, because for them the rent is not the point — waiting is the point.

Meanwhile the demand side has thinned dramatically. Florida's net domestic migration fell from roughly 311,000 people in 2022 to just over 22,000 in 2025. Counting international arrivals, the state added about 551 residents a day in 2025, down from roughly 1,640 a day at the 2022 peak. The people are still coming. They are coming at a fraction of the speed.

More homes competing for fewer arriving households. That is the whole mechanism, and it is why national single-family rent growth slowed to 2.6 percent — the weakest in Zillow's data going back to 2015.

There is a bitter irony here for those of you who were with us through the last downturn. In 2008 through 2011, foreclosure pushed enormous numbers of families into the rental market. A weak sales market fed the rental market and kept it strong. This time the weak sales market competes with the rental market. That inversion is new, and it is why none of us had a playbook ready for August.

Rents across the region have been correcting for roughly two years. That correction was the predictable consequence of how far and how fast they rose — many of you saw increases of several hundred dollars a month within a single lease cycle during 2021 and 2022, and we were all delighted at the time.

Those increases were never a new baseline. They were the top of a curve.

This is the reason many of you will remember that I did not recommend rent increases at renewal over the past two cycles. A number of your current residents are paying a premium that the market would no longer support if they left and you had to re-lease the home today. Protecting a good resident at a fair rent has quietly become one of the most valuable things an owner can do.

What changed in August was the pace. Inquiry and application volume across our portfolio dropped sharply and suddenly — applications per property down roughly 80 percent from July. I want to be careful here: one month is one month, and our portfolio is not a statistical sample of Central Florida. But I have watched this market for more than twenty years and I have not seen an August behave like that one, and the national data points the same direction.

One further signal worth knowing about, because it tells you something about the health of the underlying system: shared housing is growing rapidly, and not in the cities where roommates were always normal. Small cities are now seeing more than double the roommate searches of prior years, with sharp growth in suburbs and commuter communities. Renters aged forty-five and over have doubled their share of the roommate market in a decade. Homeowners renting out a spare bedroom now account for roughly 39 percent of shared-housing supply.

People are not renting homes. They are renting rooms. That is what an affordability ceiling looks like when it is finally reached, and it removes demand from the single-family rental pool without ever appearing as a vacancy statistic.

It is the question underneath every other question, so it deserves a direct answer rather than reassurance.

Distress is genuinely rising. ATTOM counted 227,548 U.S. properties with foreclosure filings in the first half of 2026, up 21 percent from the same period a year earlier. Bank repossessions rose 33 percent. Florida posted the highest foreclosure rate of any state in that period. Short sales, essentially extinct for a decade, grew 16 percent year over year in the first quarter.

Those numbers are real and they are pointed the wrong way. But the composition is different from last time in ways that matter.

My honest read: this is not a credit crisis. It is a repricing, driven by supply and by the disappearance of the demand surge that justified the last run-up. For an owner with equity and staying power, that is a materially better situation than 2008. For someone who bought at the peak with little money down and now needs to move, it is materially worse.

The pressure point this time is not the mortgage. It is everything attached to it.

I would be doing you a disservice if I described the revenue side honestly and then went quiet about expenses.

Insurance. Between 2021 and 2024 the Florida statewide average premium climbed from about $2,520 to about $4,480 — a 78 percent increase in three years. There are early signs the trajectory is finally flattening, but the increase is already in your cost base and it is not coming back out.

Property taxes. Homesteaded properties enjoy the Save Our Homes cap, which limits assessed-value increases to 3 percent or CPI, whichever is lower. Your investment property does not have that protection. Non-homesteaded assessments can rise substantially faster, and many owners are only now feeling the cumulative effect.

Association dues and assessments. Post-2021 Florida legislation requires associations to fund reserves and conduct structural inspections properly. That was overdue and it is the right policy. It has also pushed dues up materially and produced special assessments in many communities.

Maintenance and labor. Materials cost more after several years of inflation. Skilled trade labor costs more as well, and the pool of available labor in Florida has tightened considerably. The vendors we can properly license, insure and stand behind are in higher demand than they were, and they price accordingly.

So the picture for many owners is revenue flat or falling while four separate cost lines rise at once. That is a squeeze, and it is why I would rather you hear about it from us in September than discover it in a year-end statement.

We fight this daily on your behalf — bidding work, challenging invoices, batching repairs, questioning renewals. We will keep doing it. I am simply not going to pretend we can offset all of it.

I want to say something uncomfortable, and I am going to say it as a licensed broker about my own industry.

Transaction volume is down sharply. A great many agents are not earning what they were two years ago. In that environment, some of them will tell a homeowner what that homeowner wants to hear in order to secure a listing — that now is a fine time to sell, that the right price will find a buyer quickly, that the market is turning.

We have now had several owners take that advice, cancel their management agreement, sit unsold for months, and come back to us to re-rent the property — having lost income they will never recover, and having reset their days-on-market history in the process.

I am not suggesting nobody should sell. Some of you should, and I will tell you so plainly if I believe it. I am suggesting that in a market this thin, the person recommending a course of action should be asked directly what they earn if you take it — and that includes me. You should ask me the same question, and I will answer it.

Before you commit to any direction, get the numbers run by someone with no stake in which way you go. We will do that for you honestly, and if honest analysis says hold, we will say hold, even where a sale would earn us a commission.

The most expensive decisions in this market are being made emotionally — holding out for a rent the market stopped paying, or refusing a reduction because of what the property achieved in 2022.

The math is usually simple and almost always points the same way. A month of vacancy costs a full month of rent, permanently. A modest rent reduction costs a fraction of that spread across a full lease term. On most properties, a hundred-dollar reduction pays for itself if it fills the home two weeks sooner.

Vacancy is the single largest destroyer of return in this business. It always has been. It is simply more visible now.

In a market where a renter is choosing between nineteen comparable homes, a week of deliberation is a week of vacancy — and the cost of that week usually exceeds the amount under discussion.

When we bring you a pricing recommendation, it will come with the comparable data behind it. You are entitled to disagree and it remains your decision. But please decide, rather than leaving it open. An unanswered recommendation is itself a decision, and it is usually the expensive one.

Whatever you decide about your property, build your household planning around a market that moves slowly and costs more to operate than it did three years ago.

That means a realistic reserve. It means underwriting the full carrying cost — mortgage, insurance, taxes, dues, management, maintenance — rather than the mortgage alone. And it means expecting longer vacancy between residents than you experienced in 2021 and 2022, because that is what the market is delivering to everyone right now.

The owners who come through this period intact will not be the ones who guessed right about the market. They will be the ones who were not forced into a decision by a cash-flow surprise.

If you are weighing selling, holding, renovating, or changing strategy, please come to us first — not because we want to talk you out of anything, but because we will give you the analysis without a preferred answer attached.

We will show you what your property would realistically lease for today, what it would realistically sell for today, what it would cost to make it competitive for sale, and what the vacancy or carrying cost looks like on each path. Then you decide.

We do also hold a sales division, so if you conclude that selling is right for you, you can make that transition without starting over with strangers.

I want to be precise about what that means, because it is not what most companies offer. Your property manager will not be selling your home. A sales agent who specializes in sales will. We do not believe in the umbrella model where one person handles your leasing, your maintenance, your residents and then also lists your property. Those are distinct disciplines requiring distinct expertise, and doing all of them adequately usually means doing none of them well.

We only offer a service where we can provide the actual expertise it requires. What you get from us is continuity of information — the people who know your property share what they know with the person selling it — without pretending that one person can be excellent at both.

I made the decision to offer both sides deliberately, and it only works if we are honest about which one serves you. If the numbers say hold, we will tell you to hold.