As we head into 2026, many of the conversations around real estate feel familiar.
People are watching prices.
They’re tracking inventory.
They’re waiting to see if buyer demand finally normalizes.
And on the surface, it does look like we’re getting our footing again.
But the biggest change coming to real estate in 2026 isn’t what most people are talking about.
It’s AI.
While prices, inventory, and demand begin to stabilize, a major disruptor is moving full speed into the real estate market. It is quickly changing how buyers find homes and how sellers’ properties get seen.
If you’re selling a home, this shift will directly impact whether your property even shows up in a buyer’s search.
If you’re buying, there’s a good chance you already know this because roughly 82% of consumers are now using some form of AI-powered tool during their home search.
This market update breaks down what’s stabilizing, what’s changing, and why understanding AI is no longer optional, especially for sellers choosing representation in 2026.
Let’s start with what is becoming more predictable.
U.S. home sales peaked in 2021 at 6.12 million transactions. Since then:
That’s roughly one-third fewer transactions from 2023 to 2025 versus the peak years. The past few years felt slow because they were slow.
In Pinellas and Hillsborough Counties combined:
2025 sales were down 7% compared to 2024.
Sales were down 53% in 2025 compared to 2019.
But the slowdown in real estate sales wasn’t caused by a lack of inventory.
Active inventory in 2025 was 7.5% higher than in 2019, meaning buyers had more options. What they lacked was confidence—largely due to affordability and uncertainty.
2026 is expected to change that! Primarily because of interest rates and the slow price appreciation over the past 3 years.
Your Pinellas County pricing data tells a very clear story.
The median price rose steadily through 2024, then pulled back in 2025. That pullback reflects buyer resistance, not distress. Middle-market buyers reached affordability limits and stopped stretching.
The sharper drop in the average price tells us something different: luxury activity slowed in volume, not value.
Fewer high-end transactions closed, but well-positioned luxury homes still sold strongly.
Together, this shows compression and recalibration, not collapse. That’s what stabilization looks like.
Luxury buyers haven’t disappeared. They’ve become more analytical.
Luxury isn’t booming—but it isn’t retreating. It’s waiting for clarity.
In early January, mortgage rates briefly dipped to 5.99%, driven in part by a proposed $200 billion bond purchase aimed at increasing demand for mortgage-backed securities.
Context matters.
In 2021, when mortgage rates fell below 3%, the market saw more than $4.58 trillion in mortgage-backed securities purchased. That level of liquidity created extraordinary conditions that are unlikely to repeat.
A $200B program can help stabilize rates, but it won’t recreate 2021.
Still, psychology matters.
For many buyers, 6% is the mental line in the sand. Rates above that froze decision-making. Rates starting with a “5” feel familiar again, even if affordability hasn’t fully normalized.
This has helped thaw buyer hesitation—but it’s not the biggest story of 2026.
One of the reasons national headlines, like banning institutional buyers, can be misleading is that they don’t impact every local market the same way. Tampa Bay is a perfect example of this, especially when you compare Pinellas County and Hillsborough County.
Pinellas County is largely built-out, with very little undeveloped land remaining. As a result, most “new” construction in Pinellas is infill redevelopment of older, functionally obsolete homes that are being torn down and replaced with larger, modern residences.
This matters because infill construction:
By year-end, Pinellas inventory tightened to approximately 3,035 active listings, reinforcing the scarcity-driven stability that has defined this market for years. Because supply is structurally limited, institutional buyers do not meaningfully control inventory here. They compete for the same newer construction, 3-bedroom, 2-bath, 2-car garage homes as individual buyers.
Hillsborough County operates very differently.
Unlike Pinellas, Hillsborough still has room to expand. New construction there often involves large subdivisions, build-to-rent communities, and scalable development, which directly increases the number of homes available for sale or rent.
Hillsborough ended the year with approximately 4,159 active listings, reflecting greater flexibility and a more elastic supply pipeline. This is exactly the type of environment institutional buyers favor: consistent product, volume efficiency, and the ability to deploy capital at scale.
Institutional buyers tend to focus on:
Those conditions exist far more in Hillsborough than in Pinellas. If restrictions on institutional buyers move forward, Hillsborough would likely see:
In Pinellas, however, the impact would be muted. With limited land, infill construction, and scarcity-driven pricing, restricting institutional buyers doesn’t materially change the supply equation.
Here’s the part most market updates miss.
While prices and inventory stabilize, AI is fundamentally changing how real estate works.
Buyers are no longer searching by price and bedroom count alone. They’re using AI-driven, conversational tools to describe:
Homes are being shortlisted or eliminated before a buyer ever clicks on a listing.
If you’re buying, you already know this.
If you’re selling, you need to know this.
To compete for screen time, Zillow now allows video up to one minute per listing and has expanded Zillow Showcase, emphasizing immersive, visual storytelling.
This is not cosmetic.
Combined with AI:
Exposure alone is no longer enough. Clarity, presentation, and the written description determine whether a home is even shown.
In 2026, the biggest risk for sellers isn’t pricing slightly too high or too low.
It’s hiring a Realtor who doesn’t understand:
AI is accelerating decision-making. Markets that are stabilizing will feel this acceleration first.
Prices may stabilize.
Inventory may normalize.
And hopefully, Buyer demand returns
But the real shift is foundational.
AI isn’t a trend. It is changing our real estate industry – FAST! The homes that succeed will be the ones positioned for how buyers now search with AI tools!
When used properly, AI is not a threat but a great tool to help you sell your property or save you time in your home search. If your Realtor hasn’t embraced AI, it could be devastating to your real estate goals!
The Tampa Bay housing market didn’t break. It is recalibrating.
The fundamentals of the game are changing. In 2026, the advantage won’t be solely the price and timing of the market. It will be understanding how the market now works.
At The Tenpenny Collection, we are actively studying and implementing AI-driven strategies to ensure our clients’ properties stand out in an increasingly competitive, technology-driven marketplace. In a market that is stabilizing, clarity (not noise) will be what sets successful outcomes apart.
Contact us if you want more information to help navigate the 2026 Tampa Bay real estate market.