Official sales numbers are in and it shows August median local home prices down 3.6% from last year. Average home prices were down 7.5% from a year ago. August median prices were $405,810 this August in Lee County compared to $420,750
Average home prices this year were $535,629 compared to $578,873 last year. If we go back and compare against the height of the market back in April and May of 2022, median home prices are down 13.66% and the average local home prices down 18.71%
We have been amazed at how stable pricing has been given two factors. Interest rates have gone from the 2’s into the 7’s in a record amount of time. Secondly, inventory has quadrupled in the last 18 months. While prices have remained amazingly stable the last 12 months, most people don’t realize the price declines we saw last year from May through December as rates began rising rapidly.
Buyers Waiting For Prices to Fall
We hear many buyers are cautious to purchase because they believe prices are going to fall. Nobody knows for sure if prices will continue to drop. However, most buyers do not realize prices have already fallen almost 14-19%
Buyers listen to the news, and the headlines say prices may fall out and foreclosures could rise. We believe the economy would have to get a lot worse for anything like that to happen.
We do know that for every 1% rise in rates it takes away approximately 11% purchasing power away from the buyer. Because rates have gone up more than 4%, you might fear buyers can now afford 44% less than they could 18 months ago.
This may be true. The hope is that enough people with money will continue to come to Florida. Interest rates have hurt a large portion of the market, but people moving here are the wildcards.
What We’re Watching
We are keeping our eye on inventory levels. They are spiking. If the trend continues it would tell us more people are putting their home on the market than people moving here. For right now, inventory is OK.
However, we have noticed the rate of increase in listings the past few weeks. If the rate continues to climb while pendings continue to go down, this could change the dynamics in a matter of weeks.
Thinking of Selling?
I would call the Ellis team now 239-310-6500. Our inventory is still low as our homes have been selling. We hear from other agents they expect a slew of homes coming on the market starting in October. We have been on several listing appointments in the past 9 months where the sellers haven’t decided to sell yet. It could be that many decide all at once the time is right. Or visit www.SWFLhomevalues.com to get an instant online estimation of your home’s value now.
We are writing this article the Tuesday before an anticipated government shutdown. Any shutdown will not help real estate sales, as new national flood policies will not be written. Buyers will be forced to buy private flood insurance at sometimes much higher prices, or wait to close. We may be able to assume a seller’s flood policy if they have one.
FHA, VA, USDA loans may cease as well. This would disrupt a certain portion of the financed buyer market and would certainly harm home sales.
Tricky times call for experienced agents. Home insurance is difficult on a good day. Throw in possibly higher rates, or high rates lasting into 2024 and 2025, and a government shutdown and you’ve got a mess. If you are selling today, you need an expert who’s been through market shifts, government shutdowns, and insurance problems before. About 85% of the agents working today have never worked in a shifted market, and even fewer were here for the 1995 and 2013 shutdowns.
Always call the Ellis Team at Keller Williams Realty 239-310-6500. The Ellis Team has been voted Best in Real Estate 11 years in a row by News Press Readers.
Good luck, and Happy Selling!