Southwest Florida Real Estate Market Update [New for June 2023]

Southwest Florida Real Estate Market Update - JuneSummer is here, and so is your Southwest Florida real estate market update for June 2023. With our stunning beaches, great year-round weather, and diverse housing market, homebuyers are purchasing homes in the area every day. This is your one-stop source for market trends, developments, and opportunities in the local Southwest Florida real estate market.

Cash is King in Florida, and are FHA buyers making a comeback?

Hi it's Marcus Larrea, Team Lead here at Palm Paradise Realty Group. Let's take a look at how the real estate market in Southwest Florida performed in the month of May.

Single Family Stats for May 2023

Lee County
May 2022May 2023% (+-)
Closed Sales 1,572 1,346 -14.4%
Closed Sales YTD 7,126 5,709 -19.9%
Median Sale Price $455,000 $439,950 -3.3%
Average Sale Price $604,418 $577,196 -4.5%
(Inventory) Active Listings 4,893 5,987 22.4%
Months Supply of Inventory 3 4 33.3%
Close Price to List Price Ratio 100% 98% -1.7%
Median Time to Contract 6 22 266.7%
Collier County
May 2022May 2023% (+-)
Closed Sales 650 514 -20.9%
Closed Sales YTD 2,903 2,216 -23.7%
Median Sale Price $850,000 $850,000 0%
Average Sale Price $1,540,038 $1,698,605 10.3%
(Inventory) Active Listings 2,269 2,538 11.9%
Months Supply of Inventory 3 5 66.7%
Close Price to List Price Ratio 100% 94% -6%
Median Time to Contract 7 31 342.9%

Townhouses & Condo Sales in May 2023

Lee County
May 2022May 2023% (+-)
Closed Sales 670 481 -28.2%
Closed Sales YTD 2,973 2,125 -28.5%
Median Sale Price $331,500 $349,000 5.3%
Average Sale Price $420,728 $424,583 0.9%
(Inventory) Active Listings 1,805 2,620 45.2%
Months Supply of Inventory 2 4 100%
Close Price to List Price Ratio 100% 97% -2.6%
Median Time to Contract 5 18 260%
Collier County
May 2022May 2023% (+-)
Closed Sales 790 599 -24.2%
Closed Sales YTD 3,249 2,573 -20.8%
Median Sale Price $511,250 $512,500 0.2%
Average Sale Price $859,031 $848,903 -1.2%
(Inventory) Active Listings 2,009 2,282 13.6%
Months Supply of Inventory 3 4 33.3%
Close Price to List Price Ratio 100% 97% -3%
Median Time to Contract 6 26 333.3%

*Data pulled from Southwest Florida MLS on 6/6/2023

SWFL's Real Estate Market Heading into Summer 2023

Closed sales remain down significantly year-over-year across all property types in both Lee County and Collier County. Inventory remains down year-over-year and month-to-month across all property types in both counties as well. Months' supply of inventory dropped month-over-month as the available inventory continued to decrease.

Prices remain fairly flat in Southwest Florida year over year. For the second month in a row, single-family homes in Lee County saw a decrease in median sale price from May 2022 to May 2023, but the month-to-month numbers remained even.

As I mentioned in last month's update, we will continue to see inventory drop month over month—as is typical for this time of year—until the end of the year as we head into our local season. The dip in inventory helps to keep prices stable through the off-season. 

Factors Influencing the Local Market

Two of the main factors contributing to the decline in closed sales are the lack of move-in-ready inventory and rising interest rates. The lack of inventory is keeping prices up while the higher interest rates are trying to push prices down. In effect, we are seeing a stalemate in a tug of war taking place between the upward pressure from lack of inventory and the downward pressure from the increasing interest rates.

Interest rates are expected to level off and maybe even decrease slightly with the threat of a national default behind us, while inventory is expected to continue to decrease. This should mean that prices will continue to be stable and even increase slightly as the year goes on.

SWFL & National Trends in Real Estate

According to Redfin, cash sales made up 33.4% (or one-third) of all home purchases in the U.S. in April. This was the highest share of cash purchases in a month in nine years.

During the month of April, cash sales made up an even bigger portion of all sales in Florida. In major metro areas in the state, cash sales ranged from 35.1% in the Orlando market to 53.6% in the West Palm Beach Market. Of the 61 transactions our team at Palm Paradise Realty Group participated in during the month of April, 55.7% of them were cash transactions. 

On the other hand, FHA loans are making a comeback in Florida as well, according to the same April report from Redfin. Nationally, FHA loan purchases are at 16.4%—the highest rate since February 2020. Across the same major metro areas in Florida, FHA loan purchases ranged from 14.5% in West Palm Beach market to 21% in the Orlando market. For our team at Palm Paradise Realty Group in Southwest Florida, 11.5% of our 61 transactions were FHA loan purchases.

So cash is still king, and FHA loan purchases—which enable buyers to put down as little as 3.5%—are definitely making a comeback. 

If there is anything we can do to support you with buying or selling a home, if you would like a free home valuation, or if you have any questions about the market in general, please reach out to one of our amazing team members online at PalmParadiseRealty.com or give us a call at 239-349-2487.

Thanks for watching!

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