Hi everyone, it’s Chelsea here, bringing you another segment of Living in Southwest Florida. If you’re thinking of moving to Fort Myers, Cape Coral, or any of the surrounding areas then you’ve probably done enough research to know that it’s been… a bit of a roller coaster in housing around the entire country over the past year. If you didn’t catch last year’s predictions, feel free to click up top and go check to see how right or wrong I was. I’m going to take a quick second to pat myself a bit on the back because I’d like to think my hit ratio was pretty spot on. But that’s enough about last years predictions because today we’re going to get into what 2023 real estate looked like, what I’m currently seeing out there, and what I expect to see as we move into 2024.
But before we jump in, really quick it would mean a lot to me if you could hit that like button so the YouTube algorithms share this info with others and let me know what you’d like more of. And my video releases can sometimes be erratic, so don’t forget to hit that subscribe button. And real quick - I just wanted to shout out that in between videos you can also follow me on social media like Facebook and Instagram because we are posting pretty much daily all the things happening here in Southwest Florida - including videos of daily life, helpful tips, market information, news about new projects and all that sort of stuff you might find useful around here.
As a thank you, here is a video from Planet Monkman, who is the king of Cape Coral light displays. People from all over the city come to enjoy his half hour or so set with holiday music synchronized to holiday lights.
Alright let’s jump right in.
(intro)
So let’s start by discussing what a whirlwind 2023 was. Nationally speaking, 2023 was a bit of a cluster in the housing market. Both interest rates and housing prices raised through the first half of the year, and by summer it had caught up with most markets and began its decline. 2023 was the most unaffordable year on record to buy a house thanks to the high interest rates and the housing prices that weren’t dropping due to low inventory supply. Interestingly enough, despite the higher interest rates, which finally peaked over 8% - the first time in 20 years - there was still low inventory and that kept prices supported. This was in part because we had the least amount of new listings last year on record as well. This is probably not surprising given how many people either had no mortgages or low interest rates and didn’t want to take on higher rates in order to move. But we did begin to see some relief on the national level as the interest rates finally began to drop near the latter months.
Okay, it’s great to know what’s happening on a macro level - but real estate is really a micro market. EVERYTHING is localized, so let’s look at the trends we saw here on a much more granular level.
Well - January historically always signals a rise for us. With our snowbirds beginning their return, those who do not have winter homes here begin looking around to see if this is the year they buy a second home. And knowing the snowbirds are returning, homeowners began to put their homes on the market. And last year was no different. We began the year here in Southwest Florida with a January median sales price of $441, 967 and throughout snowbird season we raised to our year high of $473,000 in May. By September when we were really feeling our crunch, we hit our 2024 low of $430,000 and then picked up a little to close December out at $440,000. So, while we rode peaks and valleys throughout the year, we did have a relatively flat year overall. This isn’t a bad thing, ya’ll. While a lot of the country talked about how much their markets dropped, we didn’t. And looking at it from a much larger scale, We are still way, way, way above normalcy that was pre-pandemic numbers. I doubt we’ll ever see anything in our lifetimes as pre-pandemic numbers.
Let’s take a look at what we’re seeing now. In typical snowbird season fashion, sales prices were up in January. We saw a modest $10,000 rise of 2.3% month December and 1.3% year over year - ending January at $450,000.
Closed sales dipped in January to 1,637 sales - but also keep in mind that we often see January sales as one of our lowest months of the year. This is because closed sales is a lagging data point. Majority of closings in January come from escrows that were opened on offers in December - and everyone knows that the buyer pool that are house hunting during the holidays is reduced. In other words, this is common and normal.
Also typical and normal for this time of year is that our pending sales are up. 2,674 homes are under contract, which is actually up almost 65% from December and - more importantly for tracking over a long period of time - is also up about 1% from 2023. I love looking at pending sales because this is real time data. As I mentioned previously, closing sales is lagging. Those are buyers that used to be in the market a few months ago. But pending sales is active buyers hunting right now - and as you can see, the amount of buyers out there is still strong.
BUT… and where it’s going to start getting a little murkier… is our new listings and active inventory. January we always see a lot of sellers list their homes in anticipation of the snowbird season. But this year we saw an extraordinary amount of new homes hit the market. In fact, we saw our 3rd highest month for new listings that we’ve seen in the past 8 years. And because of all of these new listings, we also saw our markets swell to 9.2 months of inventory.
I’m going to digress for a second and explain what that means. Our months of inventory relates to how long it would take us to absorb every active listing. If we did not list another home on the market and only sold what we had, it would take 9.2 months currently to sell off every single one. For a balanced market we’re looking at 5-7 months of inventory, so being above 7 months means that we are very firmly in a buyers market right now.
So what does all this mean? Well - while we have a typically strong amount of buyers in the market, our inventory exceeds our amount of buyers able to purchase them, and it’s causing us to shift into the buyer’s market. So I want to dive into WHY we have so much inventory right now.
A lot of this is in part to being cyclical. Typically we’ll see somewhere around 4,000 homeowners give or take list their homes in any given month. And that number is always a little higher during January with the start of the snowbird returns. But part of it is also unique to us thanks to hurricane Ian. You see, after hurricane Ian many structures needed repairs of some sort, whether it was major or minor. And even if it is a minor repair, it is going to take time to sift through insurances and wait on any necessary wait lists in order to get it resolved. Particularly, if a homeowner has an active insurance claim open, new insurance cannot be written on the property and needs to wait until that process is over. Soooo, people who may have been going through that process likely deferred their moves until a more favorable time of year, causing an additional influx of inventory to hit the market at once.
Let’s talk about what opportunities there are out there for buyers. Well, like I mentioned, we have homes for people to select from right now AND we’ve interest rates come down a tad which is good.
The investor market has also quieted down a little after being so hot and heavy after Ian. There are definitely still opportunities out there as homeowners who’ve struggled with insurances finally walk away or get tired of trying to fix projects from Ian. Those who can handle these more challenging scenarios are able to swoop in and save the day.
But I would say our biggest sector at the moment is in new construction. Builders are finding themselves with extra inventory and are willing to give concessions or negotiate sales prices in order to move properties off their books. Thanks to these concessions, new construction is being priced pretty competitively against resale homes and it’s enticing for many buyers who want to be in SWFL but are afraid of the repairwork that came after the hurricane. Maybe they just don’t have the stomach for repairwork, or maybe they are concerned with inheriting an Ian repair. Either way, it’s making new construction super enticing.
A good thing for resale sellers moving into 2023 is the absence of foreclosures. Southwest Florida has always had a good chunk of cash with secondary homeowners, but there’s an even higher percentage right now ESPECIALLY after the covid migration where northern property owners cashed out up north and came south with cash. One of my specialties is assisting preforeclosure homeowners and the amount of homes hitting the list is only .3%. In fact, out of the roughly half a million homes located in Lee County, less than 100 hit the preforeclosure list in January.
So let’s talk about where I think 2024 is going to head.
For starters, 2024 is an election year. Traditionally speaking, the government typically likes the economy to be strong and stable during election years so there is high expectation that the interest rates will likely continue to lower and at the least, hold firm. Despite the heavy increase in inventory, I still feel pretty optimistic about pricing holding strong. I suspect that we’ll see two times of big inventory this year - January which we saw, and again at the end of snowbird season. This often happens because the snowbirds use their homes through their last season and then sell them before they head home. Otherwise, I expect our inventory to remain pretty typical.
Being more in a balanced market isn’t a bad thing. Now buyers have more options of homes than they previously had. Our days on market is right back to where it was before the pandemic, in a normalized market. Since the pandemic lasted for a couple years, sometimes it’s hard to remember that it was NOT the norm. And maybe having more normalized expectations isn’t a bad thing.
That being said - I’m cautiously watching the inventory rates. I know that’s going to create a lot of opportunity for buyers, but I also know as a seller it’s hard to see so much competition. Its important for sellers to not be comparing themselves to a timeframe that just doesn’t typically exist. The pandemic was like winning the Mega Millions and the Powerball on the same day. It was a perfect storm that went in the sellers favors. All we can do now is look at the CURRENT market we’re in, and prepare to be competitive in that.
The great news is for those sellers that we do still have a strong buyer pool. And the fact is that there is often other reasons for people to move. People still get married or divorced, have children or become empty nesters, or want to live out their dreams or leave the snow or whatever their circumstances call for. There is still value in living the life you want to live and no matter what happens with interest rates and inventory there will still be movement out there. Just be prepared to move competitively within the market place.
If you’ve talked to me in the past I usually hesitate to forecast much more than 6 months at a time. Let’s be real - the real estate markets have been a little volatile over the past few years. And with the financial segments being volatile right now as well - up and down and up and down - I hesitate to give too much weight to past the 6 month mark. But at this stage, I am expecting to see the additional inventory balance out our snowbird increases, leaving us fairly flat this first half of the year, with possible slight increases if the buyer pool really increases thanks to lower interest rates as they continue to fall. With a slew of new businesses moving into the area and an unemployment rate lower than the national average, I think once some of the fear out there subsides, we’ll see buyers who are resting come back to the market again with more confidence.
Alright I hope you found that useful. Please leave a comment below and let me know what you find most interesting about the numbers. Also, I have a LinkTree list of links in my description below if you’d like to reach out. This is where you can find the brand new 96 page beautiful guide to Moving to Lee County that has been a huge labor of love for me. There’s also links to be able to call/text or email or you can book an appointment with me so we can discuss the best options for your family, answer your specific questions about the market data, or even compare specific neighborhoods. These calls are a completely complimentary service to you. During that one on one we can set up your personalized home search directly on the MLS so that you can continue to see only the properties meaning to you. Also, I do have a network of Agents throughout the United States who can help you with your move that you can tap into. If you’re not quite ready for a conversation, the LinkTree also has my website, CapeCoralFortMyersRealEstate.com and like I said in the beginning - you can find all my social media links where we are posting all the time things like small clips on life here, all the active happenings, new information about things happening around town and other information that you may find handy and give you insight as to what life in Florida looks like. As always we really appreciate it when you leave us a comment and hit that like button, subscribe button, and notification bells so you can be notified when we drop future videos that may help YOU with Living in Southwest Florida.
Thanks so much for watching and until next time I wish you much health and happiness.
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