October 2024 Real Estate MARKET UPDATE

BY: D. MICHAEL BURKE & HUNTER D. HABIB

As we move into October 2024, the Southwest Florida real estate market continues to show signs of adjustment following a dynamic year. After several months of steady declines in active listings, the market has finally seen a slight uptick in inventory, with 15,745 active listings as of October 3rd. This is the first increase in available properties since early summer, following a decline from 17,022 active listings on June 4th to 15,256 active listings by September 3rd. This slight rise could be an early indicator of a shift in the market’s supply trends as we head into the fall.

Price Reductions on the Rise
In the past week alone, there have been 1,126 price decreases across the region. This suggests that sellers are responding to the longer time it takes for properties to sell, as well as the increased inventory levels. Buyers are increasingly cautious, with more negotiations resulting in price reductions. For potential buyers, this represents an opportunity to find more favorable pricing in the market, while sellers may need to adjust expectations to align with current demand.

Inventory and Supply
The months of supply in both Lee and Collier County has been steadily declining since peaking in March 2024. Currently, Lee County has a 6.1 months supply, while Collier County sits at 6.4 months supply. This decline signals a shrinking market in terms of available homes, which could have previously pointed toward a stronger seller’s market. However, other factors such as longer days on market and the increase in price reductions suggest the market may be entering a more balanced or even buyer-favored phase.

Days on Market on the Rise
One of the most notable trends this month is the significant increase in days on market (DOM) for properties in both counties. In Lee County, homes are now staying on the market for an average of 77 days, while Collier County has seen this number climb to 87 days. These figures indicate a slower pace of transactions compared to earlier in the year, as properties are taking longer to sell, even with price reductions and a slight rise in listings.

Snowbird Season Is Approaching
With snowbird season rapidly approaching, we typically see a 20% increase in inventory during this time. For homeowners considering selling, this means more competition is on the horizon. If you’re looking to get the most exposure and attract serious buyers, the sooner your property hits the market, the better. Early listings may have the advantage of standing out before the market becomes flooded with new inventory from seasonal residents.

Hurricane Helene: Coastal Recovery Efforts
It’s also important to address the recent impact of Hurricane Helene. While some coastal areas experienced flooding, the majority of inland properties remained unaffected. We are on the path to recovery, with ongoing efforts to restore coastal areas. Despite the storm’s impact, the overall real estate market remains resilient, and many inland homes continue to show strong demand. If you’re considering buying or selling, it’s crucial to stay informed about how local conditions may affect different areas.

Federal Reserve Rate Drop
A major development that could significantly impact the real estate market is the Federal Reserve’s recent rate drop of 50 basis points, which was more than the anticipated 25 basis points. With more rate cuts expected over the next 12 months, this may put downward pressure on mortgage rates, potentially lowering borrowing costs for homebuyers. If mortgage interest rates decline further, we could see an influx of buyers reentering the market, increasing demand and activity.

Conclusion
The current real estate market in Southwest Florida is seeing key shifts, with inventory slightly increasing, price reductions becoming more common, and days on market rising. With snowbird season around the corner, recovery underway after Hurricane Helene, and the potential for lower mortgage rates following the recent Federal Reserve rate drop, timing is crucial for both buyers and sellers. Staying informed about these evolving trends will help you navigate the market successfully in the coming months.

Stay tuned for more updates as we continue to monitor these changes!