What is the future of the housing market after Yang? Industry leaders have ideas.

FORT MYERS, Florida. Real estate experts say the housing market in southwest Florida has taken two different paths since Hurricane Ian. Coastal communities such as Fort Myers Beach flourished. Domestically, interest rates have crippled the market, which began before Yang.

Industry leaders focused on this reality at the Market Trends of Southwest Florida convention in Fort Myers on Tuesday night.

“His [Hurricane Ian] caused a frenzy of investors, buyers and developers in our market that has not been here before,” said Randy Thiebaud, founder of LSI Companies.

Thibaut specializes in land use and the sale of new homes. He says that Jan pushes prices in coastal towns into the millions, sometimes just for lots.

“If you’re in Fort Myers Beach or Sanibel and you’re looking at $3 million, $4 million, $5 million in real estate, interest rates don’t matter,” Thibaut said.

What is going on in the interior communities that came into being before Yen came to our neighborhoods?

“Now it has gone awry,” Thibaut explained. “Sales fell about 40-50% due to high interest rates.”

Danny Grimes, realtor at Keller Williams, says this has different implications for our market.

“It’s not exactly a buyer-friendly market because there’s a shortage of inventory and high interest rates, but it’s friendlier than it was,” Grimes explained.

Part of the reason for the shortage is twofold. Jan pulled the houses off the market due to damage. However, Thibault says it’s coming back to people who don’t want to sell.

“Those who bought a house and locked it in at 3% are kind of holding that house in anticipation of lower interest rates,” he said.

Grimes believes that because of this, sellers will eventually have to cut prices if they want to sell, leading to increased inventory.

Thibault says a stable market will have six to eight months worth of inventory, i.e. houses for sale. Lee County now has a two-month supply, he said, in part because construction workers are backing out.

Thibault said 26,000 permits were approved in Lee County in 2022. In 2005, it was 44,000 people.

“Builders are not going to want to have that much inventory in the market right now because of interest rate volatility,” he said. “But when interest rates come down again, when the supply chain is balanced and we see declines in the construction and labor markets… once they level off, be careful. This market will be on fire.”

Grimes thinks it’s cooling down and says asking prices are coming down. He says that because of this, renters who can afford it should buy.

“They should do everything they can to fix the cost of housing, even if it is painful at first,” Grimes said. “If this interest rate is preceded by a five, buy.”

However, it depends on who you ask.

“I think it’s time to cool down, let the market calm down a bit, and then there will be big opportunities,” Thibaut said. “If you are buying a house for the first time and entering this environment right now with those 7% interest rates, it will be difficult for you to qualify.”

While sellers listing their homes for sale will help inventory, Thiebaud believes density is a key factor, especially in workforce housing.

“You should either be able to offer a new product at lower interest rates for development, or the government should work with developers to create housing for the workforce,” he said.

Grimes says overnight interest rates will change and real estate values ​​will rise. Thibaut says it could happen by next year, but no one can predict that.

Grimes believes that Yang will not have a long-term impact on the market, despite the damage that the hurricane left in its wake.