ARE HOME PRICES STILL FALLING?
THE ZILLOW HOME VALUE INDEX indicates that home prices have risen by 2.5% nationally year-over-year from January 2023 to January 2024. However, 31 of the 300 largest housing markets in the US have experienced falling home prices.
An analysis of these declining markets shows that nine of the top ten are in Florida. Additionally, the top four worst markets are in Southwest Florida, including the Cape Coral–Fort Myers market, which registered a decline of 6.7% year-over-year. The most significant decline in the country was our neighbor to the north, the Punta Gorda market, which saw prices falling 8% year-over-year. Could this be because our area had experienced a considerable increase in prices in recent years, followed by two hurricanes in the past three years?
The pressure on prices persists as the market has an oversupply of homes and slow sales. Buyers can negotiate for the best price with so many homes available. For instance, home sales in Whiskey Creek numbered 72 in 2024, the lowest amount in five years. The median cumulative days on market (CDOM) was 104, the highest in five years, and twice as long as the 52-day CDOM in 2022.
For local sellers, this means more pressure on prices and a longer time needed to sell. Local buyers continue to hold an advantage, even though they are facing high mortgage rates and increasing homeowners and flood insurance costs. Cash buyers are often obtaining the best-priced homes.
Another indication of a slowing market is the Selling Price as a percentage of Original Listing Price. In 2024, this statistic in Whiskey Creek was 92.4%, compared to 99.9% in 2022. This indicates that those homes that sold had to reduce nearly 8% from the original list price to achieve a sale.
The housing market, like most markets, is cyclical. Eventually, the market may shift again and favor sellers. Buyers might get a better deal if they wait longer, and sellers may receive more money if they delay selling. However, there are no guarantees. Currently, the market is declining locally. Waiting to sell or buy may be more costly than acting now. The cost of owning a home that is not needed is significant. Also, renting instead of buying a home is typically higher.
It is often said that the happiest days in the life of a boater are the day they buy and the day they sell. The same could be argued for a homeowner, except that the homeowner usually sells for more money than they paid, even in the current market.
If you have any questions or comments about this article or other real estate issues, please contact Bob Oxnard at [email protected].
