It’s hard to believe we’ve watched local Southwest Florida home prices rise $100,000 since 2013. Official numbers were just released for November which shows the median home price in SW Florida at $245,000. The average home sale price in November was $317,109. Compare that to 2013 when the median sales price in November was $170,000 and the average was $236,550. That’s not quite $100,000 difference but you only need go back just a few more months and we’re there.
Southwest Florida Home Prices Rise
What’s caused home prices to increase so much, and will it continue? The past is always easier to explain than the future is to predict, so we’ll start there. Our market over-corrected to the downside so we had lots of room for upside pricing. Our market statistically bottomed in 2009 but not for all price ranges. The upper end took longer to correct.
The boom only did one thing. It brought needed housing to SW Florida. Because the boom involved flipping, we didn’t have the end user to sustain the market. It was a False high. The error wasn’t the increased housing the boom brought. It was the speed of which that occurred.
Southwest Florida needs more housing. Rents are sky high and prices have been rising. Florida is an expanding market. Immigration leads to need for more housing. And don’t forget Florida is a net migration state winner as well.
High tax states like New York, New Jersey, and Illinois are losing residents by the droves. They are leaving high tax, foul weather states and moving to states like Florida, Texas, and Arizona. Notice a trend here?
Low taxes, great weather. If all we had was low taxes, we would gain residents. If all we had great weather, we would gain residents. Because we have both, it’s winner, winner chicken dinner for Florida. Texas is seeing transplants from CA. We’re seeing Midwestern and east coast migrations.
After Hurricanes Maria and Irma battered Puerto Rico we expect to see more migration from there as well. Going forward this leads us to believe home prices have more to go on the upside.
We do not see a downside price risk like we did back in 2005. The difference is end users. We have them now, we didn’t back then.
Tax Reform Will Help Florida
The new tax reform also will help Florida. Local, state, and property taxes deductions are capped at $10,000 under the new law. Florida doesn’t have a state income tax, and many people’s property taxes are below $10,000, so most Floridians will benefit from the full deduction. People in high tax states will not, and this will make Florida look even more attractive.
We could see some companies decide to relocate as well. Because the new tax code is favorable to companies, we don’t believe they’ll need to relocate, but some smaller companies could. Each time this occurs it hurts the northern states because they’re not competitive and it helps our state. As more and more people leave those states, it brings an increased tax burden on fewer residents, which further exacerbates the situation.
Florida really is sitting in a good position. Hopefully our planners are planning for more schools and better roads, because we’ll need them. It will be interesting to see how fast the new tax code revs up the economy. Some say it’s already started. We think 2018 could be a good year and 2019 could be even better. We’re keeping an eye on interest rates and a few other things, but overall, we see good things for Southwest Florida real estate.
If you’d like to search the MLS like a pro, visit www.LeeCountyOnline.com You’ll see All the homes, and in real-time too. No more missing out on great buys to other buyers.
Of course, you can always call us at 239-489-4042. If you’d like to list your home, ask for Sande or Brett Ext 4. We have buyer specialists ready to help you make your move as well.
Always call the Ellis Team at Keller Williams Realty for all your real estate needs!