'Slowing' 2023 market still means higher housing prices for most of SW Florida but not all (2024)

Inventory is surging, with lots of choices on where to live.

Homes are taking longer to sell. Pending deals are falling through, and sales are down.

A recipe for lower housing prices in the latest Southwest Florida data, right?

Nope, with an exception or two in the areas hardest hit by Hurricane Ian a half-year ago.

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Here is a look at how the region is doing:

How much did median jump in the Naples area, which has cash buyers?

The median price for the Naples Area Board of Realtors jumped again to $600,000, from $550,000 a year ago.

That despite its February inventory soaring by 131% to 2,835 properties. At the same time, closed sales dropped 17.2% as compared to February 2022, part of that tied to the Hurricane Ian aftermath, analysts said.

“February’s report revealed to us that there are still a considerable number of sellers who listed their property prematurely instead of fixing storm-related issues because they didn’t want to miss out on winter buying season,” said Adam Vellano, a Naples sales manager at Compass Florida. “This decision is backfiring, because buyers today are less willing to accept and pay full price for a home in Naples with major defects.”

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During the boom of the pandemic, buyers had been picking up homes in the frenzy, sight unseen without inspections. Now houses are sitting longer compared to last February, up 129% to 55 days.

“We’re not seeing ‘as is’ contracts anymore like we did last year," said Wes Kunkle, president and managing broker at Kunkle International Realty, "Contract cancellation rates went up in February, which tells me that sellers need to either fix the problems found during inspections or become more agreeable to negotiate on the price.”

The drivers on price in the Naples area include cash buyers, which accounted for 62.1% of sales.

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Did Bonita Springs and Estero have the highest bumps in median prices?

The Bonita Springs-Estero group known as BER also saw a rise in median prices, up almost $100,000 from last year to $575,000. Sales are down 10.2% and average days on market escalated by 117% to 39 days.

"The increase in the median price was due primarily to increased sales of $1 million-plus properties, which is an indication of our strong luxury market,” said Steve Kolenda, managing broker for BHHS Florida Realty, noting how there is more negotiation happening. "We are seeing where properties go under-contract, and sellers are agreeing to the buyers' request for repairs to keep things moving along.”

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The inventory has ballooned by 123.5% as compared to a year ago, but BER Realtors say their 742 total homes aren't that far off from where it had been prior to the market's shrinkage in the sizzling COVID era.

“The market is slowing but not depreciating in value due mainly to the low inventory available,” said Erin McDonald, managing broker at Premier Sotheby's International Realty. “We have a bit of a lull where we started the year off very strong and things have slowed down. Buyers are shopping but waiting until the end of season (to purchase). Things are getting picked off. It's not like the buying has stopped."

And that's not going to change with the area's appeal, despite the Sept. 28 hurricane, and the flooding and damage that came with it, said Joe Pavich, broker and owner at J. Pavich Real Estate.

“For some, this has just encouraged them to buy more inland," Pavich said. "For others who never thought they would have a chance to build near water, they are now getting their opportunity to build their dream house on the beach with the mindset of this being a 100-year storm."

How is Fort Myers-Cape Coral doing in the housing market?

While not in the same stratosphere as the Naples and BER groups, the Lee County-based Royal Palm Coast Realtor Association saw its median kick up 5% from a year ago to $379,000 despite bearing the brunt of Ian and being in the middle of a recovery.

At the same time, sales dipped 16% to 1,361 in February, with more than 1,000 of those being single-family.

Fort Myers and Cape Coral have seen a drop in houses that sold for more than $2 million, selling about half as many since Ian than it did in the same period a year ago, said broker Mike McMurray of McMurray & Members, who does a podcast with industry leaders including Royal Shell Real Estate President Michael Polly.

"2021 and '22 were just out of sight," McMurray said. "I mean, that was the peak of the market."

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Confidence still prevails, considering sales of homes under $2 million since Ian are consistent with what it was during that period a year ago, he said.

"What I see is that we're selling 1,000 to 1,200 homes a month after a hurricane, and I'm just talking single-family," Polly said. "I don't think I would have guessed that a week or two after the storm. We're still Southwest Florida. We still have the warmth, the water, the sunshine that bring people here 365 days a year, and I don't think that's going to change."

Days on the market may have shot up by 283%, but that translates to a total of 23 days total. A year ago, it was only six, and Polly said it's all about perspective with stats like those.

"When you look at the number of days it takes to get a property under contract, we were on fire the last couple of years," he said. "That's still below what we'd consider a standard time, 60 days or 90 days to get the market exposed to the property and get an offer. I think that bodes well for the interest that we're seeing. (It) still was a great two years previously, and we're going to see that kind of stabilize and continue throughout the year. (We) are just kind of back to the levels where we were a year or two ago."

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How much are prices dropping in Fort Myers Beach, Sanibel after Ian?

Two of the most hammered areas by Ian have experienced a drop in median prices as some damaged properties have hit the market.

As we reported last week, Fort Myers Beach's sunk by 7.2% for Royal Palm as compared to February 2022 to $605,000, with sales dipping 2%. Closed transactions are up on Sanibel, going from 35 a year ago to 48 last month, but overall median prices are a challenge, particularly for single-family, which are off by more than 50% to $813,750, according to the SanibelRealtors.com group.

More:

McMurray said he sold four of six homes, as of March 22, that went for more than $2 million on Sanibel and Captiva since Ian. One was a bay-front house for $7.5 million that would have done better had it been on the market prior to the hurricane.

"That would have been a double-digit number before the storm," said McMurray, expecting improvements especially after complete repair of Sanibel Causeway, which has traffic backups. "I say a lot of times I'm selling pre-construction, or I'm selling decorator-ready. (We) have the markets going through what they're going through, and we'll get there. (We) need 12 more months. I think this time next year I think we're going to be in a positive direction, very much so. Not that we're not now, but I think things are going to just continue to get brighter.

"It's unfortunate what we went through, but each day just gets better. (A) lot of Naples builders are coming on the island. A lot of builders and people coming to the island that I've never seen before so I think there's a lot of great energy coming. (We) are going to see a lot more double-digit numbers on the beach, on Sanibel."

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What kind of tough decisions are coastal residents having to make?

The areas are in reset mode as "we see a recovery coming for some of the submarkets that have been severely impacted," said Polly, who has seen Royal Shell grow from three offices on Sanibel and Captiva when he joined it in 2010 to 20 locations in Southwest Florida and beyond.

"It's something that we never wanted to see in terms of what we all had to go through, but in terms of the future it's probably one of the best things that could have happened. (It) is a tremendous opportunity," Polly said. "We've got to work through the immediate, (but) those areas now are going to go through a little bit of a regentrification process, where old is new again. Now, there's opportunity to rebuild in some of those areas and get away from low ceilings, poor elevations and things.

"We will see a lot of new product come up. It's going to be different. It's going to be newer. It's going to have a newer look, a new code, and I think the values are going to escalate. (Once) we've gotten past all the recovery efforts I think it will be right back on track."

Like the hurricane did, that's going to affect the lives of residents, McMurray said, noting conversations he's having.

"Maybe that person that used to live on Sanibel and Captiva, maybe they just can't afford it anymore," he said. "Maybe they're going to Miromar Lakes, or they're going to Babco*ck Ranch, or they're going somewhere else in Southwest Florida. It's still Southwest Florida. So those are the decisions that people are going to have to make, but they still want to come to Florida, and they still want to enjoy our beaches, our waters, our climate, everything about it."

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What is the science at Babco*ck Ranch?

As more residents move into Babco*ck Ranch, science is the name of the game along Innovation Way, near the Lee-Charlotte county line.

Babco*ck, known as the Solar City, is serving as a test site for a collaboration involving Pulte Homes and Ford Motor Company, which is experimenting with an electric truck's backup power feature and has been able to use a vehicle battery to energize a two-story, 3,654-square-foot five-bedroom home.

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In fact, it has the potential to keep a house running for three days or more during an outage, the companies said.

“As a living laboratory, the Innovation Way neighborhood gives us the opportunity to test sustainability from different perspectives, including advanced electric vehicle technology as a solution for backup emergency power to homes," said Josh Graeve, president of Pulte’s Southwest Florida Division. "There’s incredible potential for creating a critical lifeline for homeowners during natural disasters.”

Based at the Naples Daily News, Columnist Phil Fernandez (pfernandez@gannett.com), who grew up in Southwest Florida, writes In the Know as part of the USA TODAY NETWORK. Support Democracy and subscribe to a newspaper.