According to william pitt sotheby’s SW Florida home appreciation rate intensified beginning in September of 2020. The official average single family home price in SW Florida was $391,168 and by February 2021 it rose to $486,406. That is a 24.35% gain in just 5 months. It was slightly higher in January.
The median home sales price was $295,000 in September and rose to $329,950. That is a 11.85% price gain in just 5 months. For the year, average home price gains were 32.3% while the median was up 22.2%. The SW Florida home appreciation rate is very high.
As you can see, the average was up 32.3% but 24.35% of that all happened since September. Median prices were up 22.2% in the past 12 months, with 11.85% of that being in the last 5 months.
We have been talking a lot about falling inventory levels, and at last check inventory has fallen yet again to the lowest level we have seen in decades. Demand is strong which is causing prices to rise. As prices rise, affordability shrinks. Back in early March we were reporting how home affordability was near an all-time high nationally. That story is available on our blog https://blog.topagent.com In fact, all our articles are available on the blog dating back years. The blog is a great way to keep up with how our market is doing over time.
Today home affordability is shrinking for two reasons. Prices have continued to climb, and interest rates have risen. Rates earlier this year were around 2.75%. Today they are about a half percentage point higher. Rising rates are like a hidden tax borrowers must pay. It raises the cost of buying a home, and you do not really get anything for it. When you purchase an upgrade for a home you at least get something for it. Not so with rising rates.
Will rising rates be the headwind that stops the real estate market in its tracks? We don’t think so, at least not in Florida. It does take some fuel from the fire though. Affordability caps a market, so it can only appreciate so far unless you have a secondary home market where wages don’t enter into the equation as much.
Florida is blessed in that all kinds of people want to live here. We have primary workers, remote workers, secondary homes, retirement homes, investment homes, etc. Demand is strong from all segments, and people are flocking to the area and escaping other areas.
We see demand remaining strong in Florida, but rising prices and rising rates do put pressure on home buyers. Many buyers will be forced to settle for a home they do not love, but happy to be in a location they prefer over where they came from. This may be a case where a buyer buys what they can afford now and rides the wave, propelling them to their dream home later.
In an instant gratification world people like to get what they want now. Historically people bought what they can afford and work their way up the ladder to what they liked later. We may be returning to that model.
Many people are stunned to find out what their home is worth today. If you have been contemplating a sale, you should call Brett or Sande Ellis 239-310-6500. For those of you that have not thought about selling, let me ask you a question?
At what price would you sell your home? What number would make you move? When you come up with that number, call Sande or Brett. Perhaps we already have a buyer in our database looking for a home like yours. We might be able to make that Make Me Move number work for you. Call us 239-310-6500.
Good luck and Happy Easter and Happy Passover!
Check out 3 New Hot Listings This Week!
15820 Portofino Springs Blvd Unit 101
