How Rising Prices Challenge Typical Homebuyers
Three bedrooms, two bathrooms, a two-car garage and a pool. That’s the standard type of home Southwest Florida buyers are looking for, says Terry Lynn Donna, sales manager at Gulf Coast Associates, Realtors. It’s ideal for these homes to span 1,800 to 2,200 square feet and have been built between 2000 and 2012, she adds.
But these homes cost much more than they used to, Donna says. And prices have surged each year for the past four to five years, due to high demand and little availability.
“We are not able to locate homes with the square footage, floor-plan design, amenities and exceptional locations” that buyers desire, she says.
In late July, 28 homes fitting the “typical home” description were listed in Collier County with a median list price of $519,000. That number is 62 percent above the median sale price of $320,000, according to Donna. In Lee County, 77 homes matching the criteria were listed, with a median list price of $340,000, which is 59 percent greater than the median sale price of $219,500, Donna adds.
“Builders are very much aware of these constraints and are therefore charging significantly more due to high development and land prices,” Donna says. These increases can be frustrating for buyers, Donna adds, but rising prices are happening all around the country, not just Southwest Florida. “What we truly see now is that homes are expensive everywhere in the U.S.”
However, hidden fees unique to the area can throw buyers off. “New buyers to the area are not at all familiar with the issues of gated or fee-based communities,” Donna says. “These rarely exist up north.”
Even so, Donna still considers the market stable, with “sales proceeding at a good clip and many times faster in the summer months compared to seasonal sales, which are more emotional.” Summer buyers show up off-season to carefully inspect these homes and ensure that the rising prices are worth the area’s offerings.