Bonita Springs Florida Weekly

Naples, Cape Coral/Fort Myers housing markets rank in top 20




FLORIDA WEEKLY GRAPHIC

FLORIDA WEEKLY GRAPHIC

The 2021 inaugural spring, summer, fall and 2022 winter Wall Street Journal/Realtor.com Emerging Housing Markets Index reports captured an economy still looking for its footing, with employment moving toward pre-pandemic levels. Simultaneously, the index highlighted the trends sweeping through real estate markets, with a highly-competitive environment and tight supply driving overheated prices. The re-opening of travel and early return-to-office plans, even with the resurgence in delta and omicron waves, saw homebuyers look again toward larger cities, even as affordability became the central theme.

Now, in the spring 2022 season, and the landscape has shifted once again. The economy entered the year on a strong note, with employment almost on-par with pre-pandemic levels, and a significant labor shortage putting workers in a favorable position to earn significant pay increases. At the same time, building on rising wages and fueled by a year of massive fiscal and monetary stimulus, consumer prices have been accelerating at a pace not seen since the 1980s. The strength of economic growth and steep inflation pushed the Federal Reserve to take a more aggressive stance toward monetary actions. The central bank increased the overnight funds’ rate by 25 basis points at its March meeting and signaled in forwarding guidance statements that it is weighing sharper 50 basis point hikes at subsequent meetings this year, along with likely steps to reduce its balance sheet. These actions highlighted the fact that in the wake of a year during which it considered inflation “transitory,” the Fed found itself having to tame down potentially runaway inflation.

Adding a large dose of uncertainty, the first quarter of this year also saw Russia invade Ukraine, which unleashed a destructive war that led to the loss of lives, and infrastructure, as well as the displacement of over 4.5 million Ukrainians who took refuge in neighboring European countries. As the international community responded with economic and financial sanctions, the war’s impact spilled over into global supply chains and capital markets, leading to increased volatility.

For real estate markets, the combination of geopolitical and macroeconomic factors translated into a sharp and sustained surge in mortgage rates. The typical 30-year loan saw the rate jump from 3.1% at the end of 2021 to 5.0% by early April, adding hundreds of dollars to the typical monthly mortgage payment. Homebuyers responded to rising rates by rushing to find a home amid a landscape marked by a significant shortage of homes. We started the year with 5.8 million new single-family homes missing from a market that had welcomed 13.8 million new households over the past decade. With growing demand meeting insufficient supply, median list prices hit a new record in March, reaching $405,000. For many homebuyers, the 40% yearly advance in the monthly mortgage payment is outpacing the 14% gain in home prices, 17% jump in rents and 8.5% increase in consumer prices from a year ago. ¦

Methodology: The ranking evaluates the 300 most populous core-based statistical areas, as measured by the U.S. Census Bureau, and defined by March 2020 delineation standards for eight indicators across two broad categories: real estate market (50%) and economic health & quality of life (50%). Each market is ranked on a scale of 0 to 100 according to the category indicators, and the overall index is based on the weighted sum of these rankings. The real estate market category indicators are: real estate demand (16.6%), based on average unique viewers per property; real estate supply (16.6%), based on median days on market for real estate listings, median listing price trend (16.6%). The economic and quality of life category indicators are: unemployment (6.25%); wages (6.251%); regional price parities (6.25%); the share of foreign-born (6.25%); small businesses (6.25%); amenities (6.25%), measured as per capita “everyday splurge” stores in an area; commute (6.25%); and estimated effective real estate taxes (6.25%). Note: The Spring 2022 index shifted from using a monthly measure of housing supply to a quarterly metric in order to better capture activity across the entire three-month period.

SOURCE: Realtor.com

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