Naples real estate impacted by Federal Reserve cuts

It is a beautiful home on a nice, quiet street in Naples. Take a quick peak inside, and you’d assume it’d sell quickly. Well, think again.

“Despite the fact that the owners have put so much money in it, they renovated all the bathrooms; they pretty much remodeled the home. It sits on the market for way too long,” said Dirk Fischer.

And that’s the story across Southwest Florida.

“For a very long time, buyers’ activities have been reduced to just looking. Nobody wants to pull the trigger,” said Fischer, a real estate broker and owner of 5th Homes.

Fischer said there are two things to blame.

“A) The prices are not where everyone expected them to be. They are lower, but they are not as low as people were hoping for. And B) the rates are way too high,” said Fischer.

Interest rates that is.

Take the multimillion-dollar homes out of the equation, and the average single-family home in Naples is $714,000.

“And if you have to finance this, well, then you come about $3,000 to $3,500 out of your pocket every month just to pay the interest,” said Fischer.

However, on Wednesday, the Federal Reserve made a major decision by lowering current interest rates by 0.5%.

That is exactly what Fischer was hoping for.

“Half a point would be tremendous. A quarter would be disappointing. I want to be brutally honest because right now we should be much, much lower than we are,” said Fischer.

It’s also interesting to note that the Fed typically only lowers by a quarter point, but they say the big cut on Wednesday was needed.