The once-sizzling Jacksonville real estate market is showing signs of a deeper cooldown, as rising inventory levels, waning buyer demand, and price declines converge just as the city confronts a looming fiscal storm.

According to new data from Redfin, Jacksonville experienced a 3.8% year-over-year drop in home prices—the steepest in Florida and among the sharpest in the nation. This puts Jacksonville among just 11 major metros where prices have fallen, signaling a significant shift for a market that was once a pandemic-era darling for homebuyers and investors alike.

Inventory is also rising. Listings are sitting longer—averaging over 60 days on market, up from 38 days a year ago—while the supply of homes has reached a five-year high nationally. Sellers are being forced to lower expectations and offer concessions, especially as mortgage rates hover around 6.8% and monthly payments approach record highs.

The market shift is impacting more than just individual buyers and sellers. It’s also raising red flags for Jacksonville’s city government, which is projected to face a $100 million budget deficit for the next few years. That gap comes as the city eyes major capital projects, including replacing the aging Duval County jail and possibly the downtown convention center multi-billion-dollar expenditures with no clear funding path.

Pressure on Mayor Deegan’s Growth Agenda

The market slowdown complicates the narrative for Mayor Donna Deegan, who has embraced an ambitious pro-growth, development-forward agenda since taking office. Her administration has championed major public-private partnerships, incentives for downtown redevelopment, and infrastructure investments aimed at revitalizing Jacksonville’s urban core.

But the timing is now precarious. With 26.1% of downtown office space sitting vacant, significantly higher than peer cities like Miami (11.8%) and Tampa (14.5%), the anticipated revenue from real estate and business activity is underperforming. Downtown Investment Authority (DIA) head Lori Boyer remains optimistic, pointing to $2.2 billion in active construction and $3.4 billion under review. Still, those investments may take years to deliver returns—returns the city may need sooner rather than later.

“The growth plan is bold, but it’s colliding with macroeconomic realities,” said one real estate analyst. “Jacksonville’s development machine was built for acceleration, but right now, it needs brakes.”

Mayor Deegan’s critics—many of them gearing up for potential 2027 challenges—are increasingly pointing to the city’s financial strain as a consequence of unchecked spending. They argue that Deegan’s administration is too cozy with developers and not sufficiently focused on fiscal restraint.

Affordability, Insurance, and Investor Retreat

Meanwhile, the broader market is dealing with affordability constraints, climbing property taxes, and surging insurance premiums, which have pushed some longtime homeowners and investors to the exit. Cash-buying firms like Obi Buys say they’re seeing a spike in demand from sellers struggling to keep up with costs or tired of holding unproductive rental properties.

The short-term rental sector—once a key driver of Jacksonville's housing demand—is also retreating. Platforms like Airbnb and VRBO are experiencing a decline in bookings, further contributing to excess inventory.

Redfin data shows that Jacksonville’s home sales dropped 10.1% year over year in March, while new listings fell 0.2%. Those metrics suggest a market in stasis, with both buyers and sellers hesitant to make moves amid economic uncertainty.

A Political and Economic Crossroads

The city’s exposure to both a cooling housing market and a swelling budget deficit is setting the stage for difficult political and policy choices. With speculation swirling about Deegan’s ambitions beyond Jacksonville—possibly including a statewide campaign—her ability to manage these cross-pressures will shape both her legacy and her political future.

For her potential rivals, the conditions offer an opening to campaign on fiscal responsibility and market realism. But they, too, must reckon with the challenge of funding critical infrastructure in a city where economic momentum is slowing.

As Jacksonville shifts from boomtown to battleground—economically and politically—one thing is clear: the path forward won’t be as easy as the last five years of growth might have promised.