Season, as we know, is in full swing. Perfect 80 degree sunny days, spring training baseball underway, and jam packed roads and restaurants all mean good things for the Southwest Florida real estate market…or do they?
Many of you have been asking me lately what I think about the market. Let’s dig into the facts. First, I want to show you a few important stats then go into detail about how to interpret them. Since we service all of Southwest Florida, these stats will be based on all residential properties in our MLS which includes both the Greater Naples and Greater Fort Myers markets.
Current level of inventory: 7-8 months
Feb 2016 Median Price: $230k
Feb 2016 # Transactions: 1,859
The level of inventory simply tells us if new homes stopped coming on the market and we maintained our current pace of sales, we would run out of inventory in 7-8 months from now. The general rule of thumb in the real estate industry is that 6 months of inventory signifies a relatively healthy, balanced market not significantly favoring buyers or sellers. For the first time in many years our level of inventory has increased above the 6 month time frame, which signifies more options on the market for buyers and ultimately more of a buyer’s market.
That being said, let’s focus on the next number, MEDIAN PRICE. The median price of sold real estate in SWFL for February 2016 came in at $230k, which is significantly higher than February 2015 at just $205k. February over February, we experienced a 12% increase in median sales price. Still a far cry from the height of market 2005-2006 numbers which were over the $300k mark, but still a very strong increase from the previous year.
Finally, and in my opinion most importantly, the # of transactions. 2016 started off with major losses in the stock market and caused a major pause in the market and a bit of anxiety about the overall economy. These scenarios in the market always have a direct impact on confidence and ultimately translates to affecting sales in the real estate market. February 2016 transactions came in at just 1,859 while February 2015 totalled 2,412. The number of transactions plummeted by nearly 23%.
WHAT DOES ALL OF THIS MEAN?
The market speaks louder than anyone. If you are considering selling in the near future, selling sooner rather than later would likely be in your best interest. If inventory continues to grow, we could see a slow down and ultimate reversal on pricing, which would be the first downturn in nearly 7 years for our market. Let me know if you would like me to run a market analysis on your property to see what has happened to your property value.