Existing homes around $800,000 are now at a structural pricing disadvantage in North Florida, and price reductions alone cannot bridge the gap created by a surge in new construction, according to John Richardson, Global Real Estate Advisor at ONE Sotheby’s International Realty. The rise of builder inventory is dividing the market, leaving many sellers of well-maintained, mid-priced homes struggling to compete.
The current market dynamic is clear, Richardson says: buyers with options overwhelmingly prefer new construction. Builders have taken control by offering homes with full warranties, the latest finishes, and financing incentives that individual sellers cannot match. Many national builders now partner with in-house lenders, giving them flexibility to buy down interest rates or cover closing costs. This edge appeals to buyers facing higher borrowing costs.
Equally important, Richardson explains, is the psychological pull of a home that has never been lived in. In a market where buyers are more cautious, the assurance of newness and the lack of “wear and tear” have become major selling points.
This shift has left existing homes—especially those in the $700,000 to $900,000 range—at a disadvantage. “We’re seeing the biggest price drops on homes that are just kind of normal or lived in, or don’t have a wow factor,” Richardson says. These are typically four-bedroom, three-bath properties in good but unremarkable condition. Two or three years ago, low inventory meant even these homes sold quickly, often above asking. Now, increased supply from builders and more resale listings mean buyers can be choosy.
Homes that lack standout features or recent updates are seeing the steepest price corrections. Richardson notes that, in today’s market, sellers of these properties can only compete by undercutting the price of comparable new builds. “If you’re selling a home that’s like that, the only way to compete is on price,” he says.
Many sellers have not adjusted to this new reality. Some respond by making deep price cuts and eventually attract buyers. Others hold firm, hoping for a market rebound, and end up sitting on the market for months. Extended days on market now serve as a warning sign to buyers, who may interpret a lingering listing as evidence of hidden problems or overpricing.
“It’s essential now, as a seller, to list your home within the realm of what the likely sale price is,” Richardson says. “It can cause harm to list your house too high.”
He points to a recent listing: a five-bedroom, 5,000-square-foot home in a desirable neighborhood, priced well below what it sold for three years ago. Despite aggressive marketing and a lower price, the home has struggled to attract offers. Richardson attributes this to buyers comparing it directly to new construction, even though it offers features builders can’t replicate, such as a larger lot or mature landscaping. “It’s a home that somebody’s lived in for seven years, and it’s just at an unaffordable price point for most families right now,” he explains.
This pattern creates a feedback loop: the longer a home lingers, the less appealing it appears, regardless of its quality or upgrades. For many sellers, this means accepting a lower price or investing in significant updates to stand out.
Richardson argues that the price gap between new and existing homes is often wider than actual value differences would suggest. Many resales offer superior locations, established neighborhoods, and features builders don’t provide. However, they lack the marketing resources and buyer incentives that national builders use to move inventory.
This mismatch has created opportunities for buyers willing to look past cosmetic flaws. “There are a lot of properties that are undervalued that an investor or even an owner-occupant could scoop up,” Richardson says. With fewer buyers competing for these homes and contractors more available than during the pandemic boom, buyers can upgrade a resale home and often spend less than they would on a comparable new home.
Richardson also notes that buyers tend to overestimate the cost of repairs or renovations, which further depresses prices for existing homes that need work. “Consumers overestimate the cost of repairs,” he says, leading to bargains for those who do their homework.
Even builders are feeling the pressure. If a new home sits unsold for more than three months, Richardson says, it typically sees a price cut or additional incentives from the builder’s lender. This means that, while new construction dominates buyer attention, it is not immune to market realities.
In response, ONE Sotheby’s International Realty now advises clients to consider renovation potential alongside location and layout. The firm helps buyers identify homes where targeted improvements could yield better value than buying new construction at a premium. This approach requires a shift in mindset, Richardson says, but can pay off for buyers willing to invest time and effort.
Whether the two-tier market persists will depend on how quickly sellers adjust their expectations and how long builders continue to offer aggressive incentives. For now, the gap between new and existing homes remains wide, driven more by buyer psychology and builder tactics than by differences in underlying value.
For buyers and investors willing to look past the appeal of “brand new,” today’s market offers opportunities to purchase well-located homes at a discount and add value through innovative renovations. For sellers, success increasingly depends on realistic pricing and a willingness to adapt to a market where new construction has raised the bar for what buyers expect.
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