SW Florida listing counts headed higher in the past week. Over listings rose by almost 400 units as single-family homes and condos shared the rise in inventory.
As listing inventory rose this past week, pending sales declined, which is a double whammy for the local real estate market. To be fair, America has been in an election hangover waiting for results.
Post Election Market
We went back and looked at local real estate inventory the last time Trump was elected. This data might deliver clues on what to expect this time.
Listing inventory in SW Florida remained constant until the Fall of 2019. Trump became president in January of 2017. It took about 2 ½ years for his economic plan to take effect. We also looked at local home prices back then. It was roughly Fall of 2019 before they started rising as well.
This tells us two things. Home inventory levels are a good measure as to where pricing will go. Secondly, new economic policies take time to take effect.
Speculation
Some speculate that Trump will be smarter this time and hit the ground running. If his policies are enacted sooner, their effect could take place sooner. Of course, things are different this time around. Our national debt is over $35 trillion and climbing, inflation roared, and interest rates tripled in less than 4 years. Will the president’s policies work with these new conditions? Will he be able to execute every financial option he’d like to because of the debt and interest rates? We’ll be watching to see if the effects work faster or slower than last time.
Slow Your Roll
These are all questions to be answered over time. Trump has proposed ending the cap on SALT deduction. This would help real estate in high tax states like CA, IL, NY, NJ. Those high tax states were responsible for sending many residents to Florida. The high taxes will remain, but the deduction might slow the flow of migration to Florida from these high tax states. This could affect demand in Florida, which would limit price increases.
SW Florida has excellent supply. With listing counts headed higher, we do not need demand to drop off radically. We believe many will still choose to migrate to Florida because of the weather and tax advantages. Allowing a higher deduction for high tax states may keep some there is all we are saying.
The Fed
We are watching interest rates moving forward. The Fed just reduced another 1/4%, but so far the bond market hasn’t liked it. Bond rates have gone up about .8% since the Fed has lowered 3/4%. In fact, many on Wall St are worried the Fed may have to raise rates in 2025 due to the economy doing better and high debt. This would essentially be egg on the Fed’s face because it would mean inflation is not under control.
The worst thing a Fed can do is lower rates before inflation is under control. We saw this back in the 80’s when the Fed was forced to start raising rates again. It threw us into a double dip recession. The Fed was wrong about transitory inflation, and they may have been wrong about lowering rates too soon. The bottom line is, rates may not come down as fast as people thought in 2025. We may need lower taxes and lower cost of oil to help the economy out, or risk recession.
The next year will be fascinating to watch. Many economic conditions will be in play and depending on what the new policies are moving forward and how quickly they take effect will shape which direction our real estate market moves.
Either way, we’ll help you keep track of what is really going on in the real estate market. You can always call Sande or Brett Ellis with Keller Williams Realty 239-310-6500 with your questions, or get a value for your home online at www.SWFLhomevalues.com
With inventory high, who you hire matters! Go with experience, and marketing! With listing counts headed higher, and we have no idea how many more may enter the market in January.
Good luck, and Happy Selling!
Ellis Team Weekend Open Houses
Open House Saturday 12-3 PM
10813 Dennington Rd, Fort Myers FL 33913
Open House Sunday 12-3 PM
4768 Crested Eagle Ln, Fort Myers, Fl 33966
