Where can you find a 3-bedroom, 2-bath home for under $400,000?

The beaches, the boating and the sunshine – it’s hard to beat living in Southwest Florida. But living in paradise comes with a hefty price tag.

A new report from Redfin shows families need a 6-figure income to buy a median-priced home in Cape Coral.

While the real estate market in SWFL is strong for some people, first-time home buyers are getting priced out.

Kate Morrell knows. She and her husband are ready to own their first home in Estero, but the high prices are pausing the newlyweds’ search.

“Even if we wanted to offer, we were getting laughed out the door because we weren’t cash,” added Morrell. “We thought, ‘It’s just the two of us. Two bedroom, two bathroom for when our families come. That should be reasonable.’ But it seems to be just as expensive as the bigger places.”

Emmanuel Orange sold his duplex in Lehigh Acres two years ago, when the market was just starting to heat up.

“Now that property is probably worth $150,000 more than I bought it,” lamented Orange.

Now he’s having a hard time finding his next real estate adventure – a turnkey duplex that he can call home, but also rent out.

“I think, right now, it’s just the unknown?” said Orange. “With interest rates; not knowing what’s going to happen with the market.”

Home prices have steadied, even gone down slightly, in some areas, data from Florida Gulf Coast University’s Regional Economic Research Institute shows.

Dr. Shelton Weeks, with FGCU’s Lutgert College of Business, told WINK News Anchor Taylor Petras that people with a lot of cash from up north are still moving to our area.

“They’re able to outbid a lot of the folks that are residents here in southwest Florida,” stated Weeks.

Petras asked Weeks, “Are people being priced out of southwest Florida?”

“Absolutely,” replied Weeks. “That’s a challenging point for us in the economy.”

So, where can you find a 3-bedroom, 2-bath home for under $400,000? There is practically nothing from Bonita Springs to Naples. But you can find a home in Lehigh Acres, Cape Coral, and Port Charlotte.

Charlotte County is still the most affordable place to buy a home. One part that is booming is Babcock Ranch. Home prices are up from a year ago.

Brianna Stallins with Palm Paradise Real Estate said more people are opting for new construction, saving money on their home insurance and getting better deals from builders.

“They’re also able to offer closing cost incentives, lower interest rates, and a lot of times, a lower purchase price, especially when they have their year-end sales,” added the realtor.

Right now, those high-interest rates have people holding off on buying homes and selling them. But realtors like Marcus Larrea warn, when and if those rates drop, he anticipates home prices going up.

It’s no longer that market of, you know, you’re going up against all these buyers, and homes are selling in a snap. Peter Davis, John R. Wood Properties

“We’re going to see a lot of buyers that have been sitting on the sideline come into the market, and that’s going to drive prices up again,” said Larrea.

And don’t expect to see those 3 percent interest rates again. Mortgage Broker Michael Bergmann told believes even though rates are high, right now, there’s more room for negotiations to cut costs.

“Homes are staying on the market longer. And, you have more power as a negotiating means, to ask for closing costs. Those closing costs can be used to buy down your rates or payments,” he explained.

Orange is eager and ready to jump back into the market. His real estate agent, Peter Davis with John R. Wood Properties, said if you see something you like make an offer.

“Especially if it’s been on the market a while,” added Davis. “The seller might be motivated. It’s no longer that market of you know you’re going up against all these buyers, and homes are selling in a snap.”

For now, Orange and Morrell will keep renting, but also watching.

“I’m always looking for the right deal. The right deal always exists,” said Orange.

“I feel like there’s going to be one pocket, and that’s going to be the time to buy, and I hope that I recognize that,” reflected Morrell.

Rent prices have dropped about $100 in the Fort Myers and Cape Coral area. Right now the average price is about $2,200. Redfin also predicts 2023 will be the slowest year of home sales since the Great Recession.