Southwest Florida home sales prices stabilized in the 3rd quarter. Statistically, homes prices were neither increasing nor decreasing to end the quarter.
If you look at the graph, Southwest Florida is subject to seasonality in prices, and we are entering a time when home prices traditionally start climbing again. Covid threw a monkey wrench into the term seasonality. For the past year and a half, it was hard to tell what season is anymore.
Borders Opening Up
Canadians are finally being allowed back in the country starting in November. While we have seen this announced before it has never really happened like they said. More buyers are flocking to Florida from other higher tax states, so it will be interesting to see how this affects demand going forward.
We are also watching inflation, interest rates, and supply chain issues. Home builders may find it difficult going forward to find components to build homes. Nationwide, we have a shortage of homes and Covid did not help builders build enough homes. Now that we are seeing worsening supply chain issues, you must wonder what affect this will have on new home prices.
Of course, interest rates have been rising and are expected to rise in to 4% in 2022 by the Mortgage Bankers Association. Rates were about 2.75% not long ago. A 1% rise in rates robs a buyer about 11% purchasing power. When buyers can afford less, they don’t have as much money to bid on homes.
We have an influx of buyers flush with cash and large down payments moving to Florida. This is squeezing out some homebuyers from the process, but not necessarily all buyers and sellers are still getting their price. Instead of having 20-50 buyers bidding on each home we may only have 3-10.
Demand Outpaces Inventory Supply
The graph agrees with what we are seeing on the streets. Many buyers feel like prices went up so much and they feel a correction is right around the corner. Home buyers may be disappointed because demand is still stronger than supply. Yes, prices may have moderated and stabilized, but it does not mean prices must come down. In fact, Southwest Florida was undervalued for years and may not be more accurately valued.
The real question becomes, how does the national economy play out in the next year? The other important question is, how does Florida look business wise compared to other states? We cannot answer the first question, but we can tell you home buyers are voting with their pocketbooks. The vote is in, and Florida is attractive enough to pack up everything and move here. We do not see this trend changing. If anything, it may be picking up steam.
Why Buy Now
As you can see, we have some wildcards in play, and if anyone can tell you how things will play out for certain, they are smarter than we are. What we can say is buyers should buy sooner rather than later, because waiting can cost you. We can also say prices may not come down. They could, but they could also increase due to higher costs and not enough supply.
This truly is one of those rare moments in time where it can cost both buyer and seller to wait. If you’ve been thinking about making a move, now might be your ideal time. Call Brett or Sande Ellis 239-310-6500 and we can talk about your situation.
Or, visit www.SWFLhomevalues.com to find out what your home is worth. To search the MLS like a professional does, check out www.LeeCountyOnline.com Our site is updated every few minutes, so you are looking at the best data.
Good luck and Happy House Hunting!