A Market in Turmoil

We’ve been in Southwest Florida for a combined 60 years (the founders of the company). One of us, the slightly older one – had the “opportunity” to live through the great banking and real estate crisis and recession of the mid-2000s. Now, as we come down from the insane highs of the fever pitch the market reached during the peak of COVID insanity, we’re getting the same feeling as the crash of 2006/2007 – in fact, since housing prices moved up so precipitously there’s the possibility we may see an even greater crash.

As you know we’re one of the top companies that helps homeowners liquidate their homes for cash quickly in Fort Myers and surrounding areas. Unlike many conventional agents we get to talk with and understand the needs of individuals in all kinds of situations (not just a turn key ready scenario). As such we see all kinds of property, in all kinds of condition and all kinds of owners and hear their stories. What we’re seeing across the board can be summarized as follows:

• Market boomed in 2020 and 2021
• It then began to fizzle and flatlined back in 2022
• The boom “stayed alive” – if only in spirit – The market and narrative continued to support the idea (and corresponding prices) that real estate was booming. However we already began to see drops in prices.
• Sellers started putting homes on the market in mass, but demanding the new high prices, refusing to settle for anything less than their expectations
• 2023 was basically back to a normal market – inventory began to increase, again more inventory at high price levels
• As we’re now fully settled into 2024 and can see all of the historical data, we’re seeing that the sellers from the last two years are beginning to get desperate, they’re lowering their prices, the new condo laws in Florida are greatly affecting condos (prices, sales, etc.). Things STILL aren’t selling while inventory is SKYROCKETING

We’re in for some tough times ahead in the housing market based on a number of factors. As we suggested in our two part series on the housing market as well as our NABOR update.

As we move through 2024, the Fort Myers housing and real estate market continues to reflect broader regional trends across Southwest Florida. This Q3 Fort Myers Housing & Real Estate Market Report dives into the latest data and trends, offering valuable insights for investors, homeowners, and real estate professionals. With fluctuating sales figures, shifts in median prices, and evolving market dynamics, this report will help you understand what’s happening in one of Florida’s most vibrant real estate markets.

Market Overview: Sales Trends and Price Movements

The real estate market in Fort Myers, much like the rest of Southwest Florida, experienced a notable shift in the last quarter of 2023. This period was characterized by a decrease in sales across all major property types, coupled with stabilization in pricing. Despite the downturn in sales, the area remains a critical focus for investors, given its historical appeal and potential for future growth.

Residential Sales: A Decline Across the Board

According to the Southwest Florida Real Estate First Quarter 2024 Report, residential unit sales in the region witnessed a significant downturn during the fourth quarter of 2023. Specifically, multi-family and condominium sales saw a year-over-year decline of 30%, while single-family home sales dropped by 23%. This trend indicates a cooling market, reflective of broader economic factors such as rising interest rates and affordability challenges​​.

However, the decline in sales was not mirrored by a similar drop in prices. In fact, while the volume of transactions fell, sale prices largely stalled, with single-family home median prices decreasing by just 1% and multi-family home prices actually rising by the same percentage​.

Commercial Property Sales: A Mixed Bag

The commercial real estate sector in Fort Myers also faced headwinds, particularly in the retail and office spaces. Retail property sales plummeted by 52% in the fourth quarter of 2023 compared to the previous year. Office property sales were slightly more resilient, with a smaller decline of 14%. This contraction in commercial property sales is indicative of a broader trend seen across the region, where economic uncertainty and shifting consumer behavior are reshaping the market​.

Price Stability and Affordability Concerns

While the decline in sales might suggest a weakening market, the stability in pricing tells a more complex story. For instance, the median sale price per square foot for single-family homes in Fort Myers remained relatively stable, with only a slight decrease of 2% year-over-year​. This price stability amidst declining sales suggests that while fewer homes are changing hands, those that do are maintaining their value, a crucial indicator of the market’s underlying strength.

Housing Affordability: A Growing Challenge

Despite stable prices, affordability remains a significant challenge in the Fort Myers real estate market. The Southwest Florida Housing Affordability Index (HAI) illustrates a troubling trend: affordability in the region has reached its lowest point in over a decade. For first-time homebuyers, the situation is particularly dire, with affordability metrics falling below the threshold needed to purchase a median-priced home in all key coastal counties, including Lee and Collier​​.

This affordability crisis is driven by several factors, including stagnant wage growth compared to the rapid increase in housing prices over the past few years, coupled with rising interest rates. As a result, even though the market appears stable in terms of prices, the reality for many potential buyers is that homes are increasingly out of reach.

The Role of Economic Conditions

The current state of the Fort Myers real estate market cannot be fully understood without considering broader economic conditions. Over the past year, the U.S. economy has faced a range of challenges, from inflationary pressures to fluctuating interest rates, all of which have direct implications for the housing market.

Impact of Interest Rates

One of the most significant factors affecting the Fort Myers housing market is the rise in mortgage rates. As interest rates have climbed, the cost of borrowing has increased, putting additional pressure on buyers and contributing to the decline in sales​. The Federal Reserve’s ongoing adjustments to monetary policy continue to be a critical variable in the equation, influencing