Southwest Florida Real Estate Market Update (New for November 2022)
It's the time of year when everyone is bustling around and preparing for the holidays. But whether you're a home buyer or a seller, it's important to know what's happening in your local real estate market. Here's a November update from Palm Paradise Real Estate to help you out.
For informational purposes only. Always consult with a licensed real estate professional before proceeding with any real estate transaction.
How did the market perform in the weeks after Hurricane Ian during the month of October? And how will Hurricane Ian impact the real estate market across Southwest Florida going forward? Hi, it's Marcus Larrea with Palm Paradise Real Estate.
Your November 2022 Southwest Florida Real Estate Market
The devastation of Hurricane Ian from the wind, rain, and unprecedented storm surge was felt all along the coastline of Southwest Florida, especially on the beaches and in lower-lying flood zones. But our community is stronger than ever, and the rebuilding efforts beginning immediately after the storm have been no less than remarkable.
Power was restored to most customers within a week. The Pine Island Bridge was repaired in less than three days, and the Sanibel Causeway was reopened within three weeks while officials thought it would take months. Community residents and outside aid have come together to help provide the basic necessities of food, water and shelter to those who lost their homes or whose homes were flooded. Remediation on many of these homes has already begun. While the effects of the storm will continue to be seen for years to come, much of Southwest Florida is already back up and running.
The effects of the storm were definitely felt in the real estate market during the month of October.
Single Family Stats for October 2022
| Oct 2021 | Oct 2022 | % (+-) | |
|---|---|---|---|
| Closed Sales | 1,380 | 706 | -48.8% |
| Closed Sales YTD | 15,551 | 12,885 | -17.1% |
| Median Sale Price | $365,500 | $435,000 | 19% |
| Average Sale Price | $494,427 | $539,111 | 9% |
| (Inventory) Active Listings | 4,331 | 4,776 | 10.3% |
| Months Supply of Inventory | 3 | 7 | 133.3% |
| Close Price to List Price Ratio | 100% | 99% | -1.1% |
| Median Time to Contract | 7 | 20 | 185.7% |
| Oct 2021 | Oct 2022 | % (+-) | |
|---|---|---|---|
| Closed Sales | 479 | 340 | -29.% |
| Closed Sales YTD | 6,875 | 4,743 | -31% |
| Median Sale Price | $659,000 | $805,000 | 22.2% |
| Average Sale Price | $1,043,731 | $1,363,630 | 30.6% |
| (Inventory) Active Listings | 1,892 | 2,243 | 18.6% |
| Months Supply of Inventory | 4 | 7 | 75% |
| Close Price to List Price Ratio | 100% | 97% | -3% |
| Median Time to Contract | 9 | 35 | 288.9% |
Townhouses & Condo Sales in October 2022
| Oct 2021 | Oct 2022 | % (+-) | |
|---|---|---|---|
| Closed Sales | 568 | 323 | -43.1% |
| Closed Sales YTD | 8,258 | 5,763 | -30.2% |
| Median Sale Price | $275,050 | $335,000 | 21.8% |
| Average Sale Price | $339,657 | $406,857 | 19.8% |
| (Inventory) Active Listings | 1,388 | 1,684 | 21.3% |
| Months Supply of Inventory | 2 | 5 | 150% |
| Close Price to List Price Ratio | 100% | 98% | -2.2% |
| Median Time to Contract | 5 | 23 | 360% |
| Oct 2021 | Oct 2022 | % (+-) | |
|---|---|---|---|
| Closed Sales | 500 | 376 | -24.8% |
| Closed Sales YTD | 8,298 | 5,268 | -36.5% |
| Median Sale Price | $375,000 | $450,000 | 20% |
| Average Sale Price | $561,835 | $642,980 | 14.4% |
| (Inventory) Active Listings | 1,509 | 1,614 | 7% |
| Months Supply of Inventory | 3 | 4 | 33.3% |
| Close Price to List Price Ratio | 100% | 97% | -2.5% |
| Median Time to Contract | 6 | 24 | 300% |
*Data pulled from Southwest Florida MLS on 11/7/2022
The number of single-family homes sold in Lee County was down 49% from last year while the number of condos and townhomes sold in Lee County in October was down over 43% from last year.
Collier County performed a bit better than Lee County, but the number of sales for single-family homes was down 29% from last year while condos and townhomes were down almost 25% from last year.
This dip in the number of sales was to be expected considering the property damage that took place and the fact that many closings were delayed or canceled after the effects from the storm. While the total number of sales decreased year over year in both counties, both the median and average sale prices in both counties actually increased month over month from September to October.
This is an interesting stat to keep an eye on in the coming months. Many people who lost their homes and had the means to purchase another property while their primary property in the area is repaired may have overpaid for convenience.
The other possibility and more likely longer-term cause of prices continuing to increase locally is that inventory of newly constructed or recently updated move-in ready homes will be in short supply. At the same time, we have also seen many investors entering the market purchasing damaged older homes or flooded low-lying homes from those that do not wish to take on the task of rebuilding.
It can be time-consuming, stressful and costly to rebuild with or without the help of insurance. These investors will help raise property values in the long run by building newer homes and upgrading older homes and in many cases bringing these homes up to better, newer building codes, and even elevating new homes to current FEMA flood regulations.
Considering The 50% Rule
The 50% rule could prohibit rehabbing older low-lying homes from being rebuilt. For those unfamiliar with the 50% Rule, it is a regulation of the National Flood Insurance Program. It prohibits improvements to a structure exceeding 50% of its market value unless the entire structure is brought into full compliance with current flood regulations. So how will the storm impact the real estate market across Southwest Florida in the years to come?
Considering an abundance of investors from all over the world are hoping to scoop up damaged properties along the coast, limited inventory of move-in ready homes in need of minor to no repairs, an even more limited inventory of rental properties which will continue to drive rental prices up, and a possible population surge as people relocate to Southwest Florida for longer term construction related job opportunities, the storm will actually help insulated Southwest Florida even more from the recession the rest of the country is facing in the long term. Some may argue that rising insurance costs may deter people from moving to Florida, but Florida still has the advantage of no state income tax, which could help offset rising insurance costs.
It's still hard to see it now due to the destruction, but in a few years when new construction with newer building codes and elevation standards begin to be more and more prevalent with capabilities to withstand the effects of these storms, property values will continue to increase. Just look at Punta Gorda now compared to pre-Hurricane Charley. After all, this is still paradise and there is only a finite amount of coastline in paradise.
We're Here to Assist You With Your Buying & Selling Needs
If you have any other questions about the impacts of Hurricane Ian on the real estate market across Southwest Florida, if you would like a free post-storm home valuation or if you are interested in buying or selling, please reach out to one of our experienced team members today at www.PalmParadiseRealEstate.com.
Thanks for watching, and we’ll see you in the next video.
For informational purposes only. Always consult with a licensed real estate professional before proceeding with any real estate transaction.
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