Homebuyer Competition Is Easing
It’s no secret that buyer demand has been extremely high ever since the Federal Reserve substantially reduced interest rates during the pandemic. In fact, skyrocketing home values in 2021 and 2022, have been the result of exceedingly high demand and a relatively low housing supply.
When the market conditions heavily favor the seller, it’s common for bidding wars to take place and home prices to be driven up as a result. While buyer competition is still high, there are signs that competition is easing.
According to a recent report by the National Association of Realtors, the average number of offers made on sold homes has dropped by a considerable amount over the last few months.
The average number of offers per home reached a high of 5.5 in April 2022. Since then, the numbers have dropped steadily with each passing month. In May the average was around 4.0 offers, in June it fell to 3.3, and by July the average was just 2.5 offers per home. This number is expected to drop even further in the months to come.
Higher Interest Rates
This decrease in offers can be attributed to two things. Number one, higher interest rates. Multiple Fed rate hikes this year have made it more expensive to buy a home and have caused some buyers to leave the market temporarily. Number two, a slightly higher inventory of homes on the market. Buyers have more options to choose from and may not be scrambling to put offers in. With lower buyer demand and more homes on the market, competition is effectively reduced.
What These Trends Mean for You
Even though there were a high number of buyers that were searching for homes in 2021, many potential buyers decided to drop out of the market because of the intense competition. Even if you were willing to offer more than asking price, there was a good chance that you could have been outbid throughout most of 2021.
What the last few months indicate is that buyer competition is easing, which significantly reduces the possibility that you’ll need to manage a bidding war. Even though the market is still tilted towards sellers, a greater number of homes on the market means that potential buyers may be able to make an offer and purchase a home without too much hassle.
If you avoided buying a home over the past couple of years because of the high competition, now might be a great time to start searching for a new home. Even though buyer demand is still relatively high, it has dropped considerably over the past few months. If you’re in the market for a new home, you should have less competition when making an offer.
Southwest Florida Real Estate Market Update
September 28th Hurricane Ian hit Southwest Florida. Many homes, businesses, and families were severely impacted. Most areas are in a rebuilding phase. On the real estate scene, we have started to see some damaged homes being listed for sale, in various stages of disrepair. If you are interested in buying or selling a home in Southwest Florida or know someone who might be, please reach out to me.
In September, Single Family Home Active listings in Lee County were up 106.2% compared to September of last year, and Condo & Townhouse listings were up 93.5%. That relates to a 2.7-month supply of inventory for Single Family Homes and a 1.8-month supply of inventory for Condos & Townhouses. Good news for Buyers that are still in the market, as they have more homes to choose from. Although still a Seller’s market, Sellers now have more competition. Year-over-year Sales Prices are still up. September’s Median Sales Price for Single Family Homes in Lee County was up 16.3% and the Median Sales Price for Condos & Townhouses was up 25.5% compared to September 2021. Although prices are up over last year, they’re down compared to the previous month for 4 of the past 5 months (see 2nd data table below showing the Median Sales Prices for Single Family Homes in Lee County by month from 2019 through September 2022 for reference).
During the 3rd week of each month, the Florida Association of Realtors® releases the official numbers from the prior month comparing year-over-year activity. Below are some of September’s numbers, for your reference. If you are interested in learning more about market activity in a specific neighborhood, development, city, or zip code, please let me know. I will be happy to provide you with a free customized market analysis.
Lee County Single Family Home Sales – September 2022
Closed Sales 894 (Sept 2022) 1,416 (Sept 2021) -36.9%
Median Price $414,495 (Sept 2022) $356,250 (Sept 2021) +16.3%
Average Price $534,035 (Sept 2022) $476,279 (Sept 2021) +12.1%
Active Listings 3,601 (Sept 2022) 1,746 (Sept 2021) +106.2%
(Source Florida Association of Realtors, Data released October 20, 2022)
The Market is Shifting
Prices are up over last year, but they are down compared to the previous month, for 4 out of the past 5 months. Below is the historical sales data showing the Median Sales Prices for Single Family Homes in Lee County by month from January 2019 through September 2022, for your reference.
Lee County – Single Family Home Sales – Median Sales Price
(Source Southwest Florida MLS – November 5, 2022, Results calculated from 60,227 listings)
Real estate market conditions are always changing. Invariably, Sellers and Buyers need to turn to a local experienced Realtor® for their expertise, knowledge, and support. I have a proven track record and pride myself in helping people make knowledgeable real estate decisions, as well as making the process as easy as possible. If you are interested in buying or selling a home in Southwest Florida or know someone who might be, please call me at 239-699-3498 or email me at firstname.lastname@example.org.
QUESTIONS? I am always available to answer your questions and help you with all of your Real Estate needs. I have Real Estate contacts all over the world. Please don’t hesitate to call me if there is anything I can do for you or someone you know.
Sue Jones | Realtor®
3409 Del Prado Blvd S #103,
Cape Coral, FL 33904