Single family home sales in SW Florida climbed in March to 1,068 sales. This is down 7.1% from last year but up 37% from February’s home sales figures. We would say this is good news for the local real estate market as sales are holding up nicely. We think they could have been higher if there were more listings on the market ready to compete for buyers.
In speaking with several real estate agents and new home communities it seems that buyers this year watched the huge price increases we’ve seen over the past few years and many decided it was time to consider new construction. For many years new construction was priced out of the market because existing homes were far less expensive. Existing homes were undervalued and new home construction basically had to sit on the sidelines or risk building at a loss.
With the recent run-up in prices builders can compete again. This will be news for many sellers in SW Florida as they’re not used to competing with new construction in many years, but those days are back. Our market was undervalued and had to rise. Now that it has, competitive forces come into play and will temper large price increases going forward. We may be back to a normal market where we’ll be watching indicators that may affect our market like supply and demand, along with inflation, the economy, interest rates, consumer confidence, insurance rates, and others.
All these forces affect the local and national market. Because we’re no longer undervalued by a wide margin, and because free money is leaving the scene, and flood insurance rates may rise, the market now must react to natural market forces. We were insulated the past 5 years.
This market wasn’t a lot of fun on the way down, although it was fun on the way up, but now we’re getting close to market equilibrium. There is still much room for market growth, but it may need to be sustainable growth based on reasonable market factors. Most agents would agree it’s actually kind of healthy to get back to a stable growing market.
Even in a stable growing market there will be pockets of sub markets that will thrive and some may struggle. Some areas of town will be hotter than others. Some subdivisions are still fighting off remnants of short sales and foreclosures, or the association is making up deficiencies left by members that didn’t pay.
Some price ranges have less supply and more demand, and vice versa. You cannot price your home by how the overall market is doing, just as we can’t price SW Florida based upon how the National market is doing.
If you’re considering selling, it pays to consult an agent who understands the market and what is really taking place. You don’t need an agent that simply reads the headlines and prices your home based upon where they heard the market is heading. By the time you read about it in the papers or see it on TV, chances are the market has already shifted. The market rarely stays in one place for long.
Listing inventory is rising again. In the next few weeks we’ll be introducing a new system that will really shake things up in the SW Florida real estate market. We’re not ready to release details just yet, but if you’re considering selling your home, now might be a good time to call the Ellis Team at RE/MAX Realty Group 239-489-4042 or stop by our office at 7910 Summerlin Lakes Dr Fort Myers, FL 33907
We’ll make sure you understand the market forces so you can make a good pricing decision, and you’re going to love the new program coming soon!