Real estate recession? National trends indicate no in SWFL
The Southwest Florida real estate market continues to defy national real estate trends and statistics. “This is our new normal,” said Steve Kolenda, chief broker at Berkshire Hathaway Florida Realty’s office in Bonita Springs. “We’ve been through the pandemic and market shifts and now find ourselves with a strong market in an area with low inventory and high desirability.”
Inventory in the Bonita Springs-Estero area continues to be low from pre-pandemic levels with 1,376 active listings in August 2019 and just 486 in August 2022. Local brokers agree that people are still buying homes in Southwest Florida and plan to use them as primary residences, second homes, and/or rental properties.
Monthly inventory supply came in at 5.1 in 2019, which was very close to the balanced market indicator of 6 months of active listings. This number has dropped to 1.6 months in 2022 in the Bonita Springs-Estero area, as opposed to the national average which is currently 3.3 months of inventory. This underscores how different the Southwest Florida market is from the rest of the country.
“Real estate is hyperlocal. It’s important for buyers and sellers to focus on local, not national trends,” said Erin McDonald, chief broker at Premier Sotheby’s International Realty. Ms. McDonald added that the current local market can be characterized as a buyers’ and sellers’ market. The seller’s advantage is due to the shortage of active listings, but sellers have had to react to the fact that the frenzy of the past 2 years is over. Buyers are benefiting from slightly higher days on the market, fewer multiple offer situations, few properties selling above list price and some sellers having to reduce their list prices before closing a contract.
Currently, the median price is $583,000, an increase of 42.9% from August 2021. This, coupled with 65.4% cash transactions, illustrates the continued demand for this market. While the number of days on the market has increased from a low of 10 in April this year, August 2022 recorded an average of 24 against 107 in August 2019.
“The current prices we face will simply become home prices here in Southwest Florida,” said chief broker Jerry Murphy of Downing-Frye Real Estate’s Bonita Springs office. “Prices are based on inventory and local desirability. There is a struggle for good neighborhoods and there are only a limited number of houses available. The good news is that everyone wants to live here; the bad news is that they do their best to do so. Those who straddle the fence should make a purchase, otherwise they could end up living on the fence.
Taking into account the surge in sales due to the pandemic, our current market is stable and showing healthy growth compared to 2018 and 2019, which were locally strong years for real estate. Local brokers encourage anyone interested in buying a home not to wait. Even with the buying spree ending, demand remains high and values are not expected to drop much, if at all.
Bonita Springs-Estero Realtors provides the public with up-to-the-minute real estate reports, trends and information about the Bonita Springs and Estero real estate market. For more information, visit www.bonitaesterorealtors.com/. ¦