Home prices fall locally as rising interest rates and back to work states takes toll on the housing market. The Fed began raising interest rates in earnest in 2022 and the chilling effect on real estate prices was noticed almost immediately.
Home prices are right back to where they began in January, around $414,000 for the median price. The average price is a different story as prices went backwards by about $40,000. Headlines show price gains year over year between 12 and 16%, but that was based on last September and not January. We have mentioned in previous articles that later in the year you will see those price gains come down or go away.
Post Hurricane Ian Home Prices
Hurricane Ian may not help prices either, but not because what you would think. Many of our more expensive homes in SW Florida are closer to the coast. We know many coastal homes flooded, so less will sell. This may help bring down the median and average sales prices for a while. It does not necessarily mean home prices are declining, just that the more expensive homes are not closing.
On the other hand, we could argue home prices were already coming down prior to Ian. So maybe that will continue? We analyzed home sales after Hurricanes Charley and Irma in a previous article. In both those cases, prices came down after the storm. With Irma, that price decline continued the next year. In Charley’s case, prices went up, but so did the red-hot housing market everywhere.
Our conclusion was that neither Charley nor Irma stood in the way of what was already happening in the market. It’s as if the hurricane had no effect. If that holds true with Ian, it will be interesting to see where our market heads going into 2023.
Rising Interest Rates
We expect interest rates to rise further as the Fed battles inflation. Forecasts expect rates to level off mid-2023, but then again, they’ve been wrong for all of 2022. The bottom line is nobody knows what the economy, inflation, nor what the Fed will do until it happens.
We are telling people housing is tight in SW Florida, and Ian did nothing to help that situation. If you’d like to search the MLS and see up to the minute listings, search www.LeeCountyOnline.com. Nobody gets data to you faster. Speed wins finding the best listings in this market.
You need a professional to guide you in this market. Some listings have damage and insurance claims. Each day we are learning more and more about claims, the 50% rule, and how past home improvements might affect the 50% rule. Navigating listings has never been more challenging, and most of the relevant information is contained in the confidential remarks section only agents have access to.
It might be a good idea to get a baseline of what your home was worth pre-hurricane at www.SWFLhomevalues.com and compare that each month after the storm. I would do so quickly before the new values come out.
If you have questions, feel free to call Sande or Brett Ellis 239-310-6500. Experience matters after a storm like Ian. Navigating the home sale and insurance process has never been more complicated than today. 85% of agents have never worked after a hurricane, so you don’t want them practicing on your transaction.
We’re here to help. Hopefully you and your family are safe. We know the heartache this storm has caused. It is heart breaking for sure. Our mission is to use our experience to help where we can. Good luck, and God Bless from all of us at the Ellis Team at Keller Williams Realty.