Lee County Florida housing inventory levels stabilize at the end of season. This is true for single family homes and condo listings. To be fair, there were 111 single family homes that expired on April 1st and some of them will come back on the market. Those 111 expired listings would not have changed things that much.
We’ll be watching pending sales going into April and May, and of course new listings. All eyes will also be on interest rates this year as well. I did a little digging into the market and analyzed last week’s price reductions.
12.62 % of all single-family home listings reduced their price this past week. The average price reduction last week was 3.59%. As the season draws to an end it is clear that many home sellers are adjusting to the market as they are motivated to successfully close and move on to their next venture.
Pending Sales
Pending and pending contingent sales picked up slightly last week to 2,226, which was up from 2,174 the week before. However, that number is down from the 2 weeks prior to that. We should note we would expect pending sales to be highest close to the end of the month, especially at the end of season.
Interest Rates
Experts have been predicting up to 9 interest rate cuts this year going back to the 4th quarter of last year. We have been saying, not so fast! The Fed’s latest announcement suggests up to 3 rate cuts this year, but again, we are saying, not so fast! While we would love rate cuts in 2024, we’re not sure the Fed is going to cut if they follow their own criteria. They might very well cut due to political reasons, but the numbers do not meet their criteria. The Fed has added an unemployment number criteria which was not met. I am writing this article before the Wednesday CPI number comes out, and that is not expected to help either.
Oil
I can’t tell you how many times we have said the price of oil influences inflation interest rates, and the economy. Oil prices have been stubbornly high because we are not getting cooperation from OPEC. We have released much of our strategic reserve, and we don’t have more to release to bring prices down, albeit temporarily. It seems so long as our policies are favorable to Iran, Saudi Arabia is not going to help us. High oil prices are not good for inflation. Neither is spending, and we have both problems right now. The Fed cannot risk lowering rates too soon and risking double-dip inflation later. The Fed wants to lower in June to avoid the appearance of waiting and interfering with the election.
Assumptions
If we assume the Fed is not going to lower rates in June, how will that affect consumer confidence and affordability in the housing market? Many buyers are buying and enjoying the selection of homes. Other buyers, however, are reluctant, possibly due to affordability issues. Others may fear prices will fall and wish to wait until they do. Ironically, when interest rates fall, it adds to affordability and could give fuel to further prices increases later. Invariably buyers try to time the best time to purchase, and invariably they get it wrong. Buyers are not alone though. Sellers try to time the market as well, and most get that wrong as well.
We’ll be watching the CPI numbers this week, and charting housing inventory levels and pending sales.
Hurricane Season
Predictions call for a record year for tropical systems this year, and the Gulf of Mexico is supposedly in the cross hairs. We know several sellers have stated they do not want to be here for another season. If you’re one of those people, the time is now to get your home on the market and sell before hurricane season heats up.
Overall, we have a good market. Prices are stable enough, and buyers are looking, so long as they see value. Homes must be marketed to attract as many buyers as possible, both near and far. Homes do not sell themselves. Changes are coming to how homes are marketed.
Call Brett or Sande Ellis 239-310-6500 to find out how your home can stand out and sell this year! We’ll market your home for all it’s worth. Or visit www.Equity-Analysis.com to track your home’s equity position.