Recent sales numbers suggest local home sale prices under pressure from rising interest rates. Nationally we are seeing price resistance due to rising rates, so we decided to study the local market to see what is happening here.

Home Sale Prices Under Pressure

From the graph we can see both median and average home sale prices topped out around April to May. We must be careful here because there is seasonality to the market, and it is not uncommon to see this in normal years.

Preliminary July numbers show a median sales price in Lee County of $425,000 and an average sales price of $552,596. Keep in mind these numbers were pulled July 26th and do not incorporate a whole month.  It does give us an indication though of what we have seen the first 26 days of the month.  In June 2022 the media sales price was $449,950 and the average was $587,904.

Home Sale Prices Under Pressure

If these numbers hold up, that’s a big drop from June’s numbers. If true, this would support the cause that rising interest rates may have influenced home sale prices locally as well.

This makes sense because we have seen single family home inventory triple since Feb 15th.  This tells us supply is outpacing demand. Home prices are fabulous compared to what they were a few years ago if you are a seller, but they may not be what they were back in February.

Pricing for sellers will be critical with home sale prices under pressure from rising interest rates. We are writing this article before the Fed announces its interest rate decision and GDP numbers.  If GDP numbers come out negative for the second quarter, we can safely say the US is in a recession.

We are already seeing layoffs at companies nationwide. We are particularly concerned with potential layoffs in 2023 as that is when we believe the pain of rising interest rates will be most felt.  It is possible that the Fed will raise rates 75 to 100 basis points this week and mortgage rates could drop. If they do it is because the markets are anticipating recession into 2023.

Opportunity for Buyers Right Now

We believe there is a window for home buyers to lock in lower rates. Nobody knows what long term rates a few months from now will be, but mortgage rates have crept down in recent weeks. Mortgage rates are based of the 10-year note, and the 10-year note is lower than the 2-year note. This is what is referred to as an inverted yield curve, and this too is an indicator of a coming recession. Again, we may already be in one now. The question is, what will 2023 bring and how severe could it be?

The good news for buyers is rates have come down and selection of homes on the market has risen. Prices have come down too, and in the coming weeks we can report official numbers to verify what we are seeing.

If you have a property to sell, Always Call the Ellis Team at Keller Williams Realty. 239-310-6500 Marketing and proper pricing right now are key, and many Realtors have only been in the business a few years and do not have the experience in a market like this. Brett and Sande have been through many real estate cycles, so no matter what the future brings us, we know how to handle it.

If you’d like to track your home’s value over time, check out It’s a neat website that will email you your home’s value each month.

Let’s Talk

We are here to talk. Many times, buyers and sellers have questions, and you need a Realtor with answers based on knowledge, statistics, and experience. This is not the time to hire a newer agent.

Call the name you know, the Ellis Team at Keller Williams Realty. Good luck, and Happy House Hunting!

According to a report by Up For Growth, the US housing production deficit increased to 3.79 million units in 2019, up from 1.65 million units in 2012. This means that we as a nation are not building enough housing to keep up with demand.

Housing Production Deficit Increased to 3.79 Million Units

This is not good news for renters, or home buyers. Prices are rising due to lack of supply at the same time interest rates are rising to quell demand. How do you quell housing demand?  People need a place to live in. Rising rates makes it harder for builders to build and sell at a profit, so they slow down or stop building, which exacerbates the problem.

Housing Production Deficit Increased

We have a map put out by Up For growth which shows state by state the amount of underproduction in 2019. Reasons vary by locale why. For instance, in Detroit, many homes are uninhabitable according to the report and they need new homes to replace them. Florida is a different story, as more and more people are moving to Florida and supply isn’t keeping up with demand.

Housing is a complex issue, and their report is 76 pages long addressing the issue. Suffice it to say, we need more housing, but the situation is only getting worse.

Should I Wait For Prices to Drop?

Many potential home buyers do not like their choices. Some will decide to rent another year in hopes home prices will come down.  This may not benefit them the way they think. Even if home prices declined 5-10%, their payment would still rise more than the price savings due to higher interest rates that may be coming.  Waiting in this scenario can cost them.

Secondly, a year from now they may be worse off.  While faced with the same decision next year, rents may be higher, because people need a place to live in while supply is not keeping up with demand. Never mind if everyone can afford it, enough people can which drives up the rents.

Additionally, while rents may go up, the potential risks don’t end there. The landlord may decide to sell the home before your lease is up, or simply not renew your lease. Remember, it is a lease. You do not own it. He or she that owns the property gets to make all the decisions, not the tenant.

Inflation Raises Future Costs to Build

Lastly, as inflation lingers, the cost to build a home in the future only goes up. Future supply will cost more. Home buyers can get on the equity train now even though the home costs more than it did a few years ago. Yes, interest rates are higher too, but you can’t go back and change time. You can refinance later if rates go down in the future, but the cost of the home probably isn’t going down. In real estate you marry the house and date the rate. Inflation is one of the reasons.

Inflation compounds as well. Each year the cost to construct new homes builds on the previous year’s costs. Over time, a $500,000 home today may cost substantially more to build later. Renters might be well served to get on the equity train sooner. Most tenants do not purchase because they are worried about their job, home prices, interest rates, down payment, repair costs, etc. The truth is all these same worries will be there in 1 year, 2 years, etc. The sooner you act, the sooner you get on the train.  If you lose your job, it will not matter if you are a renter or homeowner. The landlord will still kick you out if you do not pay rent.

You can search the MLS like a pro at, or call one of our buyer specialists at 239-489-4042. Don’t forget about our Hurricane Party Prize Package. Deadline to enter is midnight July 25th. Simply go to to register to win this package.

Good luck, and Happy House Hunting!

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July housing inventory supply grew to 1.9 months supply, up from 1.18 months back in May. The $250,000-$299,000 almost doubled from .23 months to .41 months in July.

July Housing Inventory Supply

July Housing Inventory Supply Grew

Every single category grew in supply, so it is across the board. The market has slowed from a few months ago. Everything over $600,000 grew in supply by over a month. Inventory is growing while closed sales are falling. Pending sales are also declining, which is a forward indicator of future closed sales.

Because we watch the weekly inventory levels and the pending sales, we had a pretty good idea what was going to happen.  We’ve been reporting that single family inventory bottomed out February 15th while condo inventory bottomed out February 8th.

Closed sales prices lag these other indicators, so we knew it was only a matter of months before it started showing up in the sales prices, assuming the trend continued. The trend has continued, so here we are.

Did you Have the Talk?

Realtors are forced to have honest conversations with sellers about where to price their home.  Nobody sees a major decline in prices like we had in 2006 and beyond, but we could see some declines as the economy possibly enters recession. We may have some hangover effects from rising interest rates as well. Some say the ultra-low interest rates allowed for prices to balloon where they did, and when you take those away you take away the home affordability and the market stops.

The market doesn’t really stop but it feels that way in a shift. Buyers are reluctant to pay today’s prices in fear of the market moving lower. Sellers tend to want yesterday’s prices and cling to last month’s headlines. Each side backs into their corner until the realization sets in. Until each side recognizes the market of the moment, a stalemate happens.

Both sides eventually agree that it is either time to buy or sell, and the sooner they do that the better off their family will be.  Right now, we are in the messy middle whereby each side has not figured that out yet. Sure, lots of sales are occurring, because the buyer and seller are motivated and accept the reality of today’s market. Others want to test the market by listing above the market, only to reduce again and again later.  Buyers are guilty too. Some lowball and strike out again and again. They feel frustrated but comforted by fact they’ll be able to pick up a home tomorrow at prices lower than today.

Lock in Interest Rate Now

The problem is when rates are going up, lower home sales prices tomorrow still cost more than higher priced homes today. Locking in those rates is crucial. We’ve had a temporary pause in rates as the market reacts to recession numbers, but those interest rate hikes could pick back up again in a few weeks.

Buyers are in a better position today than a few weeks ago. Inventory has grown while rates have slipped back about .75%. Selection is better and purchasing power increased about 8.25%.  When rates go back up in a few weeks, that 8.25% purchasing power will be wiped out.

If you have a house to sell, call the Ellis Team at 239-310-6500. If you are interested in buying, call our buyer specialists at 239-489-4042 or visit

Our team is here to help you navigate this tricky market. Our agents are trained on market conditions and how this affects you.

Don’t forget our Hurricane Party Giveaway too. Head on over to to find out how you can win the hurricane party package which includes a generator, snacks, gas can, flashlight, batteries, and other stuff.

Good luck and Happy Selling!

Hurricane Party Prize Package

Hurricane Party Prize Package


Unofficially we saw both median and average home sale prices decline in June from May’s sales numbers. We say unofficially because these stats are numbers we procured from MLS. It is possible there are a few more sales in Lee County from other Multiple Listing Services in the state. Largely we expect these numbers to hold.

Home sale prices decline in June 2022

We saw May’s median price decline slightly from April, so this makes two months in a row median price will have declined. We must be careful not to draw many conclusions from this fact because it is not uncommon for prices to decline after about April. There is seasonality to home prices as higher priced homes tend to sell in season.

We are seeing double digit increases in prices year over year, but the pace is declining. We believe we will see more of that this year as we start bumping up against higher sales prices in November and December of last year. The trend to watch will be if the year over year sales pace begins to slow.

That could happen as we are seeing listing inventory grow. This tells us supply is outpacing demand. We are watching listing inventory grow, closed sales decline, and pending sales fall, which is an indicator of future closings. When listings go up and pending sales go down, we know supply is outpacing demand.

Rising Rates?

What effect will continued rising interest rates have on the economy and the housing market. The Fed is raising rates to slow demand in the economy. The question is, how much will that slow housing demand? We believe it has already had an effect, and more interest rate rises will further constrict the market. Some say low rates is what propelled the market to the prices we have today. Eliminating those low rates could take away some of those price gains.

If this scenario happens, we will see more listings hit the market with fewer buyers. We could see further home sale prices decline in the future if we see higher interest rates.

If you are a seller, it will be more fun to sell today than it will be next month. Already we can say it was more fun to be a seller a few months ago than today, and that trend may continue.

If you are a buyer, it may not be more fun to purchase next month than today. Rising interest rates may eat up more than any potential savings on price, so waiting could cost buyers.  This is one of those few points in time where waiting could cost both buyers and sellers. It could especially cost sellers who need to sell and get a new mortgage when they buy.

Take Action Now

Bottom line, if you have a property to sell, do it today. If you wish to buy, do that today as well. You will probably do better working with an experienced Realtor who has been through market shifts before. An experienced Realtor can calculate how much more it will cost you if rates go up, even if prices came down. We have a video of this on our YouTube channel entitled Better to Buy Real Estate Now or Wait? We filmed it 2 months ago and gave illustrations of what would happen if interest rates climbed into the 6’s. We know this already happened. What if interest rates climb into the 8’s? The same logic applies.

Buyers have more choices now with increased listing inventory. Rising rates may sap their buying power and take away choices available today.

Buyers can search the MLS like a pro at Our database is updated instantly, so you will see the latest listings as they come on market and won’t see homes that closed weeks or months ago.

Sellers can find out what their home is worth at If nothing else, you should track the direction of prices each month and see how your home is doing.

Our team is here to help you. Give us a call and put our knowledge, data, and experience to work for you. Always Call the Ellis Team at Keller Williams Realty 239-489-4042

Local pending sales drop as inventory rises which caused the month’s supply of inventory to rise 70% in May over last year. New pending sales dropped 11% in May 2022 versus May 2021, while overall pending inventory fell 11.5%

The drop in pending sales comes at the exact same time as inventory rising to 57.1% year over year in May. This explains why we are seeing price reductions. New supply to the market is outpacing demand. We still have excellent demand, but the market is not absorbing all the new listings coming to the market.

Local Pending Sales Drop
Local pending sales drop as inventory rises

The month’s supply of inventory rose to 70% to 1.7 months supply. 1.7 months is a historically low figure, and yet we know the supply is outpacing demand.  This number will not stay at 1.7 months’ supply.

Price Reductions

Today I looked and there were 2,629 single family homes on the market in Lee County. 947 of the 2,629 homes on the market recently had a price reduction. This means 36% of all homes on the market today have had a price reduction since they listed the home.

Local pending sales drop as inventory rises
7-Day Market Watch

The most fun time to be a seller statistically was back in February.  Don’t get us wrong, it’s still a great time to be a seller, and homes are selling well, if it is priced correctly.

The question is, is it more fun to be a seller today than it will be a month or two from now?  We know it was more fun a few months ago, and by the trend we are seeing in the numbers, it very well could be more fun today than in the future.

We have been telling sellers for months, the sooner you decide to sell the better off you may be. This is true today as well. We are studying preliminary sales numbers for June, and it looks to us that median sales prices will be down against May numbers.

Sales Prices Lower

Official May median price was $469,950. I just pulled up all single-family home sales in Lee County as of June 28th, the day this article was written, and median sales price came in at $449,950. That is a $20,000 drop if the number holds up. Keep in mind, there are some outstanding sales yet to be recorded for the month.

Average sales prices look to be lower in June as well. Official May average was $658,886 and the preliminary average is $598,413. That is a $60,000 drop. Again, there are some outstanding sales that could change these numbers.

Top Dollar

While we have an excellent market, the data suggest the market is cooling. Your Top Dollar may be today, and every day you wait may cost you money. If you are thinking of selling, sooner may be better than waiting. If your home is on the market, adjusting your price to get it sold today may be better than waiting. If the market continues cooling, it may not be as fun a few months from now.

A word of caution though. Median and average home sale prices traditionally decline about this time of year, so don’t make too much out of it.  More luxury homes sell in first quarter every year. What is different this year is inventory is rising.

The Fed is also tightening, and the lending market has risen. We may be in a recession, or close to one. With all these events happening simultaneously it may be safe to assume prices have stalled until we get back to a lower interest rate environment.

If you have a property to sell, you should talk to Sande or Brett Ellis 239-310-6500 We study the market and can give you up to the minute advice. When the market changes you need an experienced agent who’s been through a shifting market and knows how to handle it. Check your home’s property value on our site at

Good luck and have a Happy July 4th Weekend!

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