Southwest Florida Market Stabilizes as Price Corrections Slow and Buyers Return

Written by:

Steve Marcinuk

Date:

19 Nov 2025

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The southwest Florida real estate market is showing signs of stabilization after two years of steep price corrections and volatility that followed the COVID-19 pandemic surge. According to Kevin Shelly, broker and CEO of Kevin Shelly Realty and a veteran of more than 20 years in the Bonita Springs area, the market is nearing a turning point as inventory levels, insurance costs, and buyer activity all shift toward more balanced conditions.

From Fitness Industry to Real Estate

Shelly began his career outside the real estate industry, working as a personal trainer and managing the only Gold’s Gym in Bonita Springs after college. “I’d already reached the pinnacle of that industry and was looking for something else that had more growth,” Shelly says. He had long been interested in real estate, recalling that he tried to convince his father to let him buy a house at 17. The move from fitness to real estate paid off, as his network from the gym became a foundation for his new business. “When I got into real estate, a lot of those people wanted to work with me right away, even knowing that I was new to the industry. They trusted me, and those relationships helped me get started.”

A Boutique, Family-Run Model

Rather than building a large team, Shelly chose to operate a boutique, family-run brokerage to maintain independence and control over his brand. “I’m somebody who doesn’t like any corporate restraints. I’m a very independent thinker. I don’t want anybody telling me what I need to say, what I need to do, any scripts,” he says. Shelly’s approach extends to client relationships, emphasizing direct communication and consistency. “The way that I felt like I could maintain that control of having that consistency with my brand would be to keep it a smaller family-run boutique corporation that is only for family and best friends.”

Direct Pricing Advice in a Correcting Market

Shelly has built his reputation on honest pricing guidance, which has been especially important as sellers adjust to the post-pandemic market. “I’m not there just to tell them what they want to hear. My approach is always to be honest and realistic with them about the true value of their home,” he says. Many sellers initially resisted market realities, expecting prices from 2021 and 2022 to persist. “We have dealt with sellers that still had the mentality of the 2021 and 2022 market, and were refusing and objecting to reality, which is that we are in a buyer’s market now.”

Insurance Costs Improve After Turmoil

Insurance costs have been a major obstacle for Florida real estate, but Shelly reports significant recent improvement. “It’s not affecting or killing deals anymore. We’ve seen insurance prices come down almost 50% from the quotes we were seeing a year ago,” he says. After recent storms, several insurers had left the market, making coverage expensive or unavailable and derailing transactions. “Sometimes being able to not secure insurance at a reasonable rate would kill deals. Now, there’s a lot of options. A lot of the companies have come back,” Shelly explains. The return of insurers and lower premiums have removed a major barrier for both buyers and sellers.

From Pandemic Surge to Price Correction

Southwest Florida experienced an extreme price surge during the pandemic. “We saw prices shoot up 100% in the matter of six months. It was insane,” Shelly recalls. The spike was driven by Florida’s open policies, limited inventory, and intense buyer competition. “People were bidding 20% to 25% above list price on some properties just to win the property and get it.” When pandemic-driven demand faded and inventory rebounded, prices fell sharply. “We’ve seen properties come down 30% to 40% or even more from some of those peaks,” Shelly says. Investors who bought during the boom also contributed to the correction by selling off rental properties, increasing supply.

Signs of Market Stabilization

Recent months show signs of stabilization as price declines slow and transaction volume picks up for well-priced homes. “I think our market is bottoming out. We’re getting really close to it,” Shelly says. “We’re starting to see more properties sell, a little bit less days on the market for some of the better-priced stuff.” The shift is visible in both single-family and mid-range properties, where realistic pricing now leads to faster sales.

First-Time Buyers Re-enter the Market

A notable trend is the return of first-time homebuyers, who had largely been sidelined during the pandemic surge due to high prices, interest rates, and insurance costs. “In the last six months, I’ve sold more to first-time home buyers than I have in memory,” Shelly reports. These buyers remain highly sensitive to interest rate changes. “When they dropped to 5.8%, we had a lot of sales, like just within those few days. Then they jumped back up to 6.1%, and they kind of let up a little bit,” he explains. Shelly believes that if rates reach the mid-five percent range or lower, even more first-time buyers will return.

Regional Variations Within Southwest Florida

Shelly observes similar conditions across Bonita Springs, Naples, and Fort Myers, with only slight differences in value. “The Bonita Springs market is a little closer now to the pricing and value of North Naples,” he notes. For buyers seeking more affordable options, Shelly recommends South Fort Myers and Estero, where homes generally offer more space for the price.

The luxury segment, particularly for properties above $10 million, remains slow as fewer buyers are active at the highest price points. In contrast, homes in the $400,000 to $800,000 range have seen renewed activity as affordability improves.

Condo Market Faces Regulatory Hurdles

“Condominium sales are facing unique challenges after the recent storms and the Surfside building collapse led to new “Milestone” inspection requirements and repairs. “The condos have to pass certain inspections now, and they basically have to have everything looked at structurally,” Shelly says. Associations must address any issues identified in the reports to maintain insurance coverage. “Many times, the sellers are signing sales contracts saying that they will cover the full cost of any current assessments as well as any that come up prior to closing,” he notes.

The uncertainty around potential repairs and costs has made buyers and sellers more cautious in the condo market. The good news is that many of the affected condos are now starting to get caught up, with repairs complete or nearing completion, and budgets back on track. This will greatly help the condo market in the coming months and moving forward. 

Outlook for Buyers and Investors

Shelly’s outlook for the next six months is cautiously optimistic. He now sees opportunity for buyers who had been waiting for the bottom. “The bottom of Southwest Florida is between now and the next six months,” he predicts, advising that conditions are unlikely to get much more favorable for buyers in the near term. However, he cautions that any recovery will be gradual. “I don’t think the transition back up is going to be a surge, but it is going to be a nice incline,” Shelly explains.

For those considering a move to southwest Florida, Shelly’s advice is straightforward “You only live once and life is dynamic and precious. I believe in living like tomorrow isn’t promised. Take risks, make moves and figure it all out later. With this in mind, one of the most important decisions in our lives is where we will spend our time; where we choose to live. So, if you want to purchase a home in Florida right now, and that is what makes you smile, makes you happy, then it’s the right time to make that move.”

As the market stabilizes after a period of sharp corrections, local professionals like Kevin Shelly provide perspective on how buyers and sellers can navigate timing, pricing, and regulatory changes. His family-run, independent approach and emphasis on direct communication offer a model for adapting to a more balanced and transparent real estate environment in southwest Florida.