May closed home sales rose 2.7% over last year’s numbers in May, showing that buyers are active in the market when affordability shows up.
Interest rates ticked down, which helped with affordability, and single-family median home prices were down 6.7% from last year as well. Both factors contributed to an uptick in closings and pending sales.
Pending single family home inventory is up 18% over May 2023, and internal data suggests inventory has capped in June even though official May numbers show inventory is still rising. Official numbers lag our internal data collection in real-time.
Condos
Lee County condos are another story. Closed sales are down 16.1% from last year, and inventory is up 122.9%. We currently have a 10-month supply of condos on the market. New pending condo sales are down 24.9%. The median sales price of a condo in Lee County was down 2.9% from last year. Some condos are easier to sell than others. Factors that affect salability include whether the master association has a flood policy, because this affects if lenders will lend. Other factors include the total cost of condo/HOA fees and insurance.
Forecasts
Forecasts continue from FNMA continue to show 2024 should be a better year than 2023 in closed sales. FNMA is predicting a 9.0% increase in the number of single-family home sales. This could be because inventory has been tight across North America, and they are expecting more to come on the market. However, this coincides with what we are seeing in SW Florida home sales.
Many people believe nothing is selling, and it only feels like that when you see homes sitting on the market longer. The reality is more homes are selling this year, so long as they are marketed correctly and priced properly. Buyers have less motivation than they did a few years ago, and higher prices, higher interest rates, and rising insurance costs caused this.
While home sales are rising, we can continue to see home prices fall more. 7.1 months’ supply of single-family homes means we are in a buyer’s market. Even though we are tracking declining inventory in June internally, inventory levels have only slightly decreased. Prices are a lagging indicator to inventory. Additionally, we’ve seen a 4-week reduction in inventory, but that’s not enough to call it a defined trend yet.
The Good news is inventory has stopped rising in June. Prices may continue to fall, but at some point, that will level out if we continue to close more units and inventory declines. We expect interest rates to fall slightly by end of the year, and again slightly in 2025. If we can get insurance under control and escape hurricane damage this year, 2025 may be brighter than 2024.
Prime Time
The 2nd half of 2024 may be prime time for buyers. Prices have been coming down while there is an excellent selection of homes available. Sellers are willing to negotiate, and rates are coming down a little. Buyers may lose some leverage heading into 2025 and may look back on 2024 as the prime time to purchase. Originally, we thought the first 6 months of this year would be prime time for buyers, but the timeline got pushed back because of inflation. The Fed was not able to begin lowering rates due to pesky inflation. We hope future inflation readings will be kind so the Fed can act later this year. The absolute earliest they would change would be at the September meeting, and it could go until November, depending on the data.
Home Value Tool
We’ve got a new tool on our website www.LeeCountyOnline.com that provides an instant estimate of your home’s value. Additionally, it provides an equity analysis on your home, and allows you to ask questions about your neighborhood and the market. It’s a great way to explore home value options, even if you’re just curious about the market. Check it out.
And remember, Always Call the Ellis Team at Keller Williams Realty 239-310-6500 with your real estate questions. Brett and Sande are here to listen and help you.
Good luck, and Happy Selling!