TAMAP, Fla. (WFLA) — Real estate company Redfin is reporting a drop in home values coming in for 2023. The company said about three of every 100 homeowners who bought during the pandemic would end up underwater thanks to home values dropping while mortgage rates remain elevated.

However, Florida may not face those headwinds.

“Recent homebuyers in certain places, like Sacramento and Phoenix, are at higher risk of falling underwater on their mortgage, while Florida homeowners are at even lower risk,” Redfin reported.

According to Redfin, home prices across the U.S. have begun to fall. In 2023, the company said homeowners would see drops as large as 4% by the end of next year. Even with the prices expected to go down, Redfin said homes bought over the past two years have gained $27,000 in value, and that prices would need to decline by double digits over 2023 for a home bought during the pandemic to lose value.

However, there is still a risk of buyers “falling underwater” due to the price changes amid mortgage rate increases, but the company said it’s unlikely.

Even if home prices do fall, Florida will be in the least amount of danger. Redfin came to this conclusion by examining county sale records and calculating what a change in value for a homeowner would be based on changes in home prices through December 2023.

Their data analysis focuses on homeowners who bought a house between January 2021 and September 2022.

Change in home prices, Nov. 2022-Dec. 2023Share of homeowners who would be underwater on their mortgage Change in home value* for the typical homeowner 
(Source: Redfin)

The homeowners studied for Redfin’s analysis “are likely to have low fixed mortgage payments and good enough credit to meet tight lending standards.” The level of equity homeowners and homebuyers have due to the conditions of the past few years, with higher down payments and lower rates, Redfin said potential downturns won’t be “anywhere close” to what was seen during the foreclosure crisis from 2007 to 2010.

Safety from falling under on mortgage payments is least likely in Florida, according to Redfin, though in the state there are some exceptions.

“With a 4% home-price drop in 2023, less than 0.5% of homeowners who bought in the last two years in Miami, Fort Lauderdale or West Palm Beach would be underwater,” Redfin said. “Those are the only U.S. metros of the places included in this analysis where nearly zero homeowners would be underwater.”

Remote workers moving to Florida, as well as retirees, are adding to demand for Florida real estate, helping keep Florida’s values “resilient,” the company said. Even in Miami, Fort Lauderdale, and West Palm Beach, Redfin said home prices are up by double digits compared to the year before.