The month of June was another rough month for SWFL - Cape Coral, Ft Myers, Naples. The median home price has dropped almost 5% year to date. Closed sales dropped 16% MoM and YTD is down by over 8%. Days on market went up another 8% for an ASTOUNDING increase of 79% YTD.
New listings and active listings decreased, which often means that months of inventory should also decrease. But, since there was a decrease in "closed sales", "Months of Inventory" increased. This means that there was a huge decrease in sales. Digging in to try and understand why inventory decreases even while sales decrease takes some thought. Imagine you have 1,000 boxes for sale. Over the course of the month 10 boxes sold, which leaves you with 990 boxes. What our housing numbers show us is that we sold 10 boxes, but inventory was 800, not 990. So, where did the houses go?
Sellers get frustrated with the time it takes to sell and that their home isn’t selling for what they think it should sell for. They take the home off of the market and normally do 1 of 3 things:
1. They continue to own and live in the house
2. They leave it vacant and use it as a vacation or second home for themselves
3. Turn it into an annual rental or a vacation rental/hotel
Option 3 is what most people have chose to do and this has created a LARGE amount of inventory on the annual rental market.
I foresee the market getting much worse before it gets better. Real estate is very slow to react to any outside factors – laws, interest rates, government intervention. If and when the interest rates drop it will take at least a year before you see the real effects of that drop. AND, the rate would have to drop by at least 1% point. Even with a change of presidency it will take time for them to implement new policies and it will take even more time for those policies to effect real estate trends.