We have a better real estate market heading into 2026 than we did at this time last year. I was just analyzing market data from early last January and some numbers stood out to me.
Ellis Team Current Market Index
The Ellis Team current market index stands at 5.80 this week which is much less than the 7.04 the first week of January 2025. Remember, the lower the number the better the prospect of stable or rising prices in the future. While 5.8 is still higher than I’d like to see, it is an improvement from last year. The market doesn’t care what I’d prefer, it just is what it is.
Better Real Estate Market in 2026
It not only feels like a better real estate market in 2026, but it is also for several reasons. Closings were up in 2025. Homes are more affordable as prices have come down the past 3 years. Insurance costs are declining as regulatory reforms have kicked in. Lower inflation costs have probably helped insurance costs too.
Interest rates on loans have come down by about .75% in the last year, which has helped with affordability as well. Inflation is down significantly, which helps with ordinary expenses leaving more money to afford a home. We believe that when people receive their tax return for 2025 combined with more net pay after taxes going forward in their paycheck, people will have more money in their pockets. What they do with that money remains to be seen; however, many will use it to afford a home.
No Hurricanes
We had no hurricanes in 2025. In 2024 we had 2 that came close enough to our area to flood some properties. We had no flooding in 2025. Before Hurricane Irma in 2017 we had a long spell of zero to minimal flooding. If we can get back to a period between events it will do wonders for our area.
The economy looks to be shaping up heading into 2026. As more capital spending comes back to the US along with jobs, it will offset jobs lost due to AI. Bringing factories back to the US is critical, and it’s happening.
Oil prices have come down by about 20% in the last year. Not only do we have more money in our pockets, but oil also influences the cost of everything. Roof shingles, clothing, and so much more are directly tied to the cost of oil. Lower oil prices will reflect in lower prices of almost everything else going forward.
Affordability Reset
Everything was high in 2022. Home prices, inflation, insurance, etc. A reset was not only needed, but it was also inevitable. The economy couldn’t sustain those kinds of costs. Now that home prices have reset, and costs are coming down like insurance and interest rates, home sales are picking up steam. When official figures are released for 2025 sales, we expect it to be the 4th best year on record. 2026 might be even better.
Don’t expect home prices to skyrocket. First, they will level off, then eventually gain. We don’t want it to happen overnight. Slow and steady wins the race, and we’re finally getting closer to that point. Covid through 2024 was a mess. 2025 picked up steam even if home prices were declining still. It will be fun to watch what happens in 2026. Truthfully, nobody knows, but there are signs not present the past several years.
If you have real estate questions, call the SW Florida experts. 239-489-4042 or visit www.SWFLhomevalues.com for an instant free estimate of your home’s value.
Good luck, and Happy Selling!
Reflection Lakes Update
