SWFL Housing Market: Latest Stats & 2023 Predictions

The SWFL housing market has been on a wild ride over the past two and a half years. What started as a balanced market with low mortgage rates was turbo-boosted by COVID stimulus, work-from-homers, and supply chain disruptions which nearly halted new home construction. These factors led to record high demand for resale homes, triggering one of the greatest home appreciation periods in U.S. history.

The rapid rate of appreciation and inflation, however, was unsustainable. To combat this, the Federal Reserve began raising interest rates, and for the first time in U.S. history, 30-year mortgage rates doubled within a 1-year period. Going from 3.22% in January 2022 to a high of 7.08% in October 2022.

Rising rates have many SWFL sellers and buyers wondering, “what’s going to happen with our local housing market?” So keep reading, because we’re going to go over how the new rates have affected everything, including sale prices, inventory levels, and days on market. We’ll also discuss future market predictions so you can sell or buy your home in SWFL, armed with full knowledge and confidence!

SWFL Home Prices

After hitting a record high of $468,500 in May 2022, the median sale price in SWFL started to ease up in response to increasing mortgage rates. The median price plateaued around $420,000 from July to November and was actually back up to $429,000 in December 2022. The fact that we aren’t on a steady decline due to higher mortgage rates is evidence that we’ve achieved a “soft landing” and not a severe market correction.

Along with this overall decrease in sale prices, there’s also been a decrease in the closed price to asking price ratio. Typically, in a balanced market, we see homes selling at 94% to 96% of asking price. However, from February 2022 to June 2022, homes were selling (on average) at 100% of asking price! From June to December, that percentage crept downward and we ended the year with the average home closing at 95.8% of asking price. This is great news for fatigued SWFL buyers. Don’t worry though, sellers, this is just a drop from the bucket of appreciation you’ve seen over the past 2 years.

Median Home Price By City | January 2023

Bonita Springs: $571,000 | Average 95.9% of asking price
Naples: $590,000 | Average 95.8% of asking price
Estero: $505,000 | Average 96% of asking price
Fort Myers: $353,500 | Average 97.2% of asking price

SWFL Housing Inventory

‘Months of inventory’ is one of the best metrics for finding how balanced the housing market is. ‘Months of inventory’ is simply how long it would take to sell all active listings, at the current rate of sale, if no new listings were added. A ‘balanced market’ (when buyers and sellers have the same negotiating power) usually has between four and six months’ worth of housing inventory. Earlier in 2022, Southwest Florida had just two months’ worth of housing inventory. As expected with the rising interest rates, that number climbed and we closed out the year with a healthy 5 months of inventory.

Housing Inventory By City | January 2023

Bonita Springs: 6 months of inventory
Naples: 6 months of inventory
Estero: 3 months of inventory
Fort Myers: 4 months of inventory

SWFL Days On Market

This refers to the number of days a property is actively on the market before the sellers accept an offer. From May 2021 through May 2022, Southwest Florida saw a median range of 6 to 8 days on market. By August 2022, we were up to 20 days on market, and it has hovered there since.

Days On Market By City | January 2023

Bonita Springs: 16 days on market
Naples: 24 days on market
Estero: 13 days on market
Fort Myers: 13 days on market

2023 SWFL Housing Market Forecast

At the end of this first and second quarter, you’ll likely see a lot of headlines about how much prices have fallen and days on market have increased. This is because most analysts use year-over-year comparisons. As we all know, the market at the beginning of 2022 was still crazy. We did not begin to see it cool until after the second quarter. For this reason, the data may seem a lot worse than it really is! Here is what we do expect to see this year:

Interest Rates

Based on all of the data above, the SWFL housing market appears to be achieving the “soft landing” that we all hoped for. Now that the higher rates have effectively cooled off the housing market, they are expected to start slowly coming back down. This process must be done gradually or else we will end up right back where we started in 2020! Experts predict that the average 30-year mortgage rate will be back down to around 5% by 2024, which will help keep prices stable.

Home Prices

The housing market is slow to respond to changes, unlike stocks which respond almost instantly to market factors. For this reason, we should continue to see a very slight decline in sale prices (possibly a percent or two) over the first half of the year. By that point, rates should be lower and the market even more stabilized. Then, we should begin seeing our typical 3% yearly appreciation again.

Foreclosures

Some are quick to compare any unfavorable market shifts to 2008. However, this market is far healthier and does not share the same risk factors. The main reason? Well, on a national level, the average homeowner has over $300,000 worth of equity in their home. This is in stark comparison to the crash of 2008, where many homeowners had very little equity, making it easy for them to ‘walk away’ from their homes after defaulting on their mortgages. Additionally, mortgage lenders now have much more strict guidelines for approval. (Those of us who recently qualified for a mortgage can definitely attest!)

Both nationally and locally, all the data point to a healthy and balanced market that will continue for the foreseeable future.