I like to keep up with the state of the local economy, mainly because it impacts just about everything, especially real estate. Real estate is both a big part of the economy and something that is affected by its ups and downs, so keeping track of its health is definitely a good thing.
Florida Gulf Coast University regularly produces a report, the “Southwest Florida Regional Indicators”. It has a rundown of several economic components, from unemployment to taxable sales. One area it covers in detail is real estate.
Here’s what it says about real estate for the month of August. Download the latest report here.
Prices Are On the Rise
Prices have been increasing for Southwest Florida real estate for quite some time, at least the past year or two. Part of this trend is caused by a natural recovery, and a lot of it is fueled by tight supply and increasing demand.
In two of the three counties surveyed, Lee and Collier, median home prices rose. Prices rose by 11 percent in Lee County from last August to August 2014; they rose by 16 percent in Collier County; and they fell by three percent in Charlotte County.
The median home price in Lee County now stands at $182,500, while in Collier County it’s much higher, at $319,000.
Home Sales Decrease
As prices have gone up, supply and home sales have gone down.
Single-family home sales in the area were down four percent overall over the past year, and were down three percent from last month. In Lee County, there was just a 30-unit decrease; in Collier County, the decrease was more substantial, at 13 percent.
Even though home sales have gone down, May actually had the best month for home sales over the past two years. It’s just that January and February were bad months that pulled down the average for the year.
I expect more homes will be sold as prices continue to rise, namely because homeowners will understandably want to lock in any profit they have made if they bought after the market crash back in 2007.
Finally, more people are working, as evidenced by the falling unemployment rate.
Across the five-county area, unemployment fell annually to 6.3 percent from seven percent a year ago. In Lee County, unemployment is now at 6.2 percent from 6.9 percent last August. In Collier County, unemployment is at 5.9 percent, almost a full point lower.
The state of Florida’s unemployment rate, by comparison, stands at 6.3 percent, down from seven percent a year ago.