April Home Prices Declined 9.57% Since 2022

April home prices declined 3.0% from last year, which was down 6.8% from the year before that. Median single family home prices in Lee County were $470,000 in April 2022, $438,000 in April of 2023, and were $425,000 in 2024

When we go back and look at March numbers they tell a similar story, so April wasn’t an aberration. So, what does this information tell us? Home values are still falling, however the greatest decline occurred last year. The SW Florida real estate market is still normalizing to the new market. It is rebalancing itself, and when prices reach a certain level, the market will be in perfect balance and prices should stabilize.

We think we are getting closer to the balance point. Pending sales are down slightly from 2023 levels and inventory is almost double what it was a year ago. Single family inventory levels began falling at the end of March but reversed that trend on May 21^st and have started rising again. Condo inventory peaked on April 30^th and fell in May, only to begin rising slightly this past week. Condo inventory levels are still down compared to April 30^th.

Interest Rates

Interest rates are up compared to last year, but showed signs of falling until inflation numbers revealed it is higher than the Fed thought. It appears the Fed will not lessen the Fed Funds rate, which means mortgage rates may not fall in 2024 like the experts had hoped. Rates may stay higher for longer, and that may hold back the real estate market from recovery.

White House

The White House policy has not helped interest rates. Inflation is influenced by housing costs and transportation among other things. The US oil policy has led to higher fuel costs, which leads to higher prices in almost everything we consume. Combine that with stimulus, subsidies, debt forgiveness, and other giveaways and you realize the Fed is pumping too many dollars into the economy chasing too few goods and services. When this occurs, it leads to inflation. The government has got to quit giving money away and spending excess money.

More taxpayer money is now going to debt interest than defense and Medicare. If we don’t start paying down that debt, this will get worse by the year. We are nowhere close to paying down debt because we can’t even get to a balanced budget.

Election Year

Many are waiting for a change in the White House. Trump would immediately improve the cost of oil and reduce much of the migrant costs, but it is unclear whether he would cut spending in a meaningful way. His historic tax cuts raised revenue, and he may go that route again as the tax cuts are expiring. We think a combination of tax cuts and reducing spending is in order, but Washington politicians show no appetite for doing that.

Regardless of who is in the White House and congress, people want a change. Inflation and the business of politics as usual is costing the average family over $10,000 each year. That is like a tax, and it is hurting the economy and housing. Mind you, with that much money floating around, housing and the economy haven’t been too bad, but it could be better. As we get closer to the election, more people may make purchasing decisions based upon how they feel the economy and leadership will go next year.