August 2025 Real Estate MARKET UPDATE

BY: D. MICHAEL BURKE, Mich Kanigsberg, & HUNTER D. HABIB

The Southwest Florida housing market continues to shift. While most headlines are still focused on elevated inventory and longer days on market, one trend has emerged that’s worth watching closely: active listings are now declining month-over-month. That’s right—after peaking during the high-end season in May, inventory has dropped for two consecutive months. Let’s break it down.

📉 Inventory Continues to Drop – Finally

As of August 1st, 2025, there are 18,036 active listings across Southwest Florida. Compare that to:

• 24,688 in May (seasonal high)

• 20,974 in June

• That’s a 27% decrease in active listings since May.

Why does this matter? Because high inventory has been one of the biggest challenges for sellers in the past 12 months. While 18,000+ homes on the market is still a lot, the trend is reversing—likely due to a combination of expired/withdrawn listings and hesitant new sellers waiting for better market conditions.

🔻 Price Reductions & Days on Market

In the last 7 days alone, 1,320 listings across SWFL have dropped their price. Sellers are realizing that simply being on the market isn’t enough—homes need to be priced aggressively to move.

Average days on market continues to tick upward:

• Lee County: 66 days

• Collier County: 85 days

That’s about two to three months from listing to sale, even in some desirable neighborhoods. The days of selling in 48 hours are gone (for now).

📦 Months of Inventory

• Lee County: 8.1 months

• Collier County: 8.6 months

A balanced market is typically considered 5–6 months of inventory. Anything above that tilts in favor of buyers. Right now, we’re still firmly in a buyer’s market, although shrinking inventory could change that dynamic later this year if the trend holds.

🏦 Fed Holds Rates – But Pressure Is Mounting

The Federal Reserve held interest rates steady again in their July 2025 meeting, maintaining the target range at 4.25%–4.50%. This was expected, but it wasn’t without controversy. Two governors dissented—calling for cuts—citing the weakening job market and rising unemployment.

Translation for real estate?
Mortgage rates remain elevated. The Fed doesn’t control mortgage rates directly, but as long as they hold steady, borrowing remains expensive, especially for first-time buyers and investors.

While many are hoping for a rate cut by fall, don’t count on dramatic drops. If we see one, it’ll likely be modest. Until then, buyers remain cautious and sellers need to stay flexible.

🧭 What This Means for You

Buyers:

• You still have leverage, but that window may be narrowing.

• Watch for well-maintained homes with price reductions—they’re more motivated than ever.

Sellers:

• If you’re on the market, make sure your pricing reflects today’s conditions—not last year’s headlines.

• The good news? Less competition if this inventory trend continues.

Investors:

• Inventory is still high, days on market are long, and there are price drops left and right.

• This is your market—just be ready to move fast when you find the right deal.

📊 Quick Snapshot

⏭ Looking Ahead

If inventory continues to shrink into fall, we may see a softening in the buyer’s market. That could mean less negotiating power and fewer price reductions. However, until mortgage rates fall meaningfully, we’re not likely to see major upward pressure on prices.

Want help navigating this ever-changing market? Whether you’re buying, selling, or investing, I’m here to help you make strategic, informed decisions.