Median Southwest Florida home prices fell 5% in June this year versus last year. Average home prices fell 4.1% year over year.
Good News?
Is there any good news with Southwest Florida home prices falling? The answer is yes. This is good news for home buyers. Secondly, we are seeing fewer listings on the market. The gap between the available listings on the market and pending sales has lessened, which creates less inventory. The other piece of good news is pending sales increased last week on single family homes. We saw inventory decrease for single family homes, condos, and manufactured homes across the board. The real question is what will happen with listing inventory heading into season?
Insurance
We just got word last week that two more carriers entered the Florida market. That’s 14 new carriers that have entered since 2023. Consequently, rates are dropping. 27 companies have requested a rate decrease for policies in effect in 2024 or later. 41 companies have requested no rate hike. Citizens Property Insurance multi-peril policies are down to 9% of all policies in Florida from 16.7% last September. Currently Citizens carries 74.5% of the wind-only policies, down from 80%. Insurance reforms are working, which is driving down rates.
Property insurance lawsuits were down 23% in 2024, and so far, this year they’re down another 25%.
Southwest Florida Home Prices
So, what is the future of Southwest Florida home prices? Prices are still declining. Interest rates haven’t changed much yet, and insurance costs are decreasing. This all helps affordability. As the economy improves it should lead to more home sales. Last week we wrote about shadow inventory and what that could mean for the future direction of home prices. A lot of variables are working together to influence home prices. These variables are not all working in the same direction, which is typical. When they all work in one direction, we typically see a shift in the market approaching down the road.
Timing the Market
We’ve written in the past about timing the market. (See May 15th article at https://blog.topagent.com) It’s almost impossible to do this, and anyone who did has had some luck on their side. The May 15th article offers some strategies for those wondering if now is the time to buy or sell. We might see Southwest Florida home prices decline further, then flatten out until inventory and shadow inventory are depleted.
Buyers are in a strong position here and these positions don’t last forever. Just ask those that wish they would have sold back in 2022. The bottom of the market may be in the next 6-12 months, or not. It’s always better to buy 1-2% before the bottom than 1-2% after the bottom. Prices are the same, but when the market begins to rise buyers get panicked and start buying. This creates competition for the best listings amongst all the buyers now getting off the fence. Additionally, buyers have less leverage with sellers because everybody knows the bottom has passed.
Prices may not rise wildly like they did in Covid, and we had less than 3% interest rates. If you see a home that meets your needs, consider buying it. This market will stop declining and level out until economic forces align to push it. It takes time for economic forces to gather momentum, and we’ll report when we see the first signs of momentum change.
Check out www.SWFLhomevalues.com to track the momentum of the price of your home. If you have real estate questions, reach out to Brett Ellis or Sande Ellis 239-310-6500.
Good luck, and Happy Selling!