- November 18, 2024
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Median home prices are declining in every metro area on the west coast of Florida — even as home prices across 87% of the United States are on the rise, according to new data from the National Association of Realtors.
Punta Gorda saw the steepest decline in the country, the NAR data shows, with a 6.5% drop in median sales price for single-family homes in the third quarter, compared with the same period in 2023.
The North Port-Sarasota-Bradenton metropolitan statistical area, meanwhile, saw median sales prices drop 5.8% year-over-year in the third quarter. That's good for No. 2 in the country in decline, ahead of Abilene, Texas and Pittsfield, Massachusetts. The No. 5 region in price declines nationally is the Cape Coral-Fort Myers area, where prices in the third quarter were down 3.7% compared with 2023.
The price declines, attributable to several factors say a trio of agents and real estate leaders in the region, attracted national media attention. Both Bloomberg and the New York Post reported the NAR data, highlighting the nugget that prices on the Gulf Coast are falling to rates that have not been seen since 2011. The Post's story was under the headline: "Florida’s crumbling home prices haven’t been this bad since 2011." Writes the Post: "Florida’s sun-soaked southwestern coast, known for its wealthy enclaves and retirement appeal, is grappling with the steepest home price drops in more than a decade."
Several factors are driving down prices, according to Tony Barrett, president of the Realtor Association of Sarasota and Manatee. Among them are market correction, insurance, interest rates, lack of buyers and uncertainty.
“The market in Southwest Florida is following a trend,” Barrett says. “This market is cyclical, and we have to eventually [give] back some of the gains that we have shown over the last few years. We had a frenzy a couple of years ago where it was difficult for anyone to contract on a home unless you had cash,” and bidding wars often ensued. That drove up home prices "significantly," Barrett says, with some houses doubling in value.
The influx of buyers coincided with the pandemic, when people were moving to the Gulf Coast from around the country as remote work became more widespread, Barrett says.
In addition, “we had an inventory problem…where we had 0.2 month inventory, and now we’re working our way up to 4.2 or 5 months of inventory,” Barrett says in a mid-November interview, noting a balanced market is six months of inventory.
As interest rates and insurance premiums have gone up in recent years, there has been a “slowdown” in buying, Barrett says.
“Most people are staying in place; they’re deciding not to move,” he says. Because of price appreciation, “if you own a home, you probably can’t afford the same home you’re in now that you purchased five or six years ago.”
Adds Barrett: “Couple that with an election year and consumer confidence, and that’s why I think we’re seeing the median home price reduced in all of the Gulf Coast.”
The decline in median sales price is not necessarily a bad thing, according to Sotheby’s International Realty CEO Budge Huskey.
A “general increase in inventory…and a deceleration in prices are both very positive things, because that creates an environment that's attractive to buyers,” Huskey says. He notes that 2024 is on track nationally to record the slowest pace of sales in 35 years, so bringing buyers into the market is sorely needed.
“There has been a more tempered demand for housing in Florida this year,” he adds, in part due to “fewer buyers in the market now than perhaps a year ago or two years ago” as well as an increase in inventory in some markets by as much as 30%.
"Hopefully 2025 is the year we get back to what would be considered a normal pace of sales," Huskey says.
He too cites the surge in sales during the pandemic as a factor in price declines now.
“If you look at what the gain in average values were in the Sarasota market — and this is true over much of the Gulf Coast of Florida since 2020 — you're looking at over a 60% increase,” says Huskey, whose firm handles properties from Naples to Tampa. That trajectory "was unsustainable for the long run," Huskey says.
Given that there is an "environment in which demand has slowed [and] inventory has increased rather substantially,” Huskey says, “values have effectively held.” In Sarasota County, for example, he notes median sales prices for single-family homes were down 0.8% in September year-over-year, according to data from the Realtor Association of Sarasota and Manatee. That same month, however, Manatee saw its lowest median price for 2024 at $470,000, which is down 6.7% in September compared with 2023.
Despite median sales prices dropping, Huskey sees signs of optimism within the Gulf Coast real estate market.
“You’re still finding a lot of strength in the upper end,” Huskey says. That holds on an individual sale basis, with recent high-dollar deals including:
Huskey and Barrett are not alone in their assessment of the industry in the region.
“The main reason that our market has seen prices fall this year is that we saw so much price appreciation over the previous 3-4 year period,” says Robert Washington, broker at Savvy Buyers Realty of St. Petersburg. “Most Florida markets outpaced other markets across the country, and I think our market is simply taking a breath and coming back to reality.”
That said, Washington adds, the Gulf Coast communities are not alone.
“If you look at other markets that experienced similar price appreciation over the past few years like Texas…they are currently experiencing similar drops in home prices,” Washington says.
And of the 226 markets the National Association of Realtors assessed, 29 of them — almost 13% — saw median sales price declines for single-family homes in the third quarter, up from nearly 10% in the second quarter.
“There’s always something to overcome in this industry,” Barrett says. He adds that Florida's Gulf Coast remains in a positive position because of its location — "there's no better coastline" — and the lack of income tax.
“We’re always a desired place to live,” Barrett says. “Real estate has always been a great investment for the future…[and] we still are continuing to see an influx of people come into our state month after month.”
