Overall the SW Florida real estate market has steadied, and each time we report this the numbers slip ever so slightly.  These numbers really aren’t surprising as December is the Holiday season.  We do close homes and condos for year end, and not as many go pending during the holidays.  January will be a month to watch going forward as we enter season.

Lee County Florida Current Market Statistics.

   

December 27,2006 Active Pending Months Supply of Inventory
Single Family 13,330 1,029 17.68*
Condo 8,559 546 32.67*

 *We project there will be approximately 9,048 single family closings reported in Lee County MLS, and approximately 3,144 condo sales reported.  Months supply of inventory are based upon these projections. 

December 8,2006 Active Pending Months Supply of Inventory
Single Family 13,173 1,078 17.47*
Condo 8,444 543 32.23*

 

November 27,2006 Active Pending Months Supply of Inventory
Single Family 13,186 1,031 17.49*
Condo 8,344 535 31.85*

November 9,2006 Active Pending Months Supply of Inventory
Single Family 13,148 1,046 17.44*
Condo 8,096 534 30.90*

October 18,2006 Active Pending Months Supply of Inventory
Single Family 12,669 1,128 16.80*
Condo 7,834 543 29.90*

 

The Florida Association of Realtors released their monthly home sales report.  Single family home sales were down 21% in Lee County, from 810 to 637 from year ago levels.  The median home sales price in Lee County was down 12% from $295,400 to $258,600.  While down from last years level, this is up from last months price of $249,200.  From this chart you can see sales in Lee County have steadied the past 4-5 months.

Condo sales in Lee County were down 8% from 130 last October to 119 this year.  Median condo prices in Lee County were down 14% from $285,000 last year to $245,000 this year.

Naples single family home sales didn’t fare as well, as home sales were down 45% from 333 sales last year to 182 this year.  Median sales prices were down 13% from $479,800 to $415,200.

Naples condo sales were down 53% from 273 sales last year to 128 this October.  Median condo prices in Naples were down 11% from $377,400 last year to $334,500.

Not surprisingly, foreclosures in SW Florida are on the rise.  This can be caused for several reasons, most notably investors who should not have been in the market, marginal buyers who bought with an adjustable rate mortgage so they could qualify and the adjustments are adjusting right now and they can’t afford the new payment, rising insurance, and rising property taxes.

All combined have put pressure on the people who could least afford it.  Some agents have speculated that when the foreclosures happen, it will make for sweet deals for investors and home buyers.  I respectfully disagree, and I’ll explain why.

Many people bought with 100% or 95% financing at the top of the market.  The market has dropped around 20%, and the sellers are now upside down on their loan.  They don’t have the cash reequired at closing to offer the home at today’s market value, so they cannot sell.  No deal for a would be investor/buyer.  Many foreclosed homes are also in need of much repair, so you wouldn’t want to pay full market value on a property that needs money thrown at it.

Most people who buy foreclosures want a deal.  The deal just isn’t there from the seller.  You’ll get a better deal waiting for the bank to take it back.  Banks are no dummies, they get BPO’s (Broker Price Opinions) and appraisals.  They limit what they’ll lose by selling it for as much as they can get.  Some banks actually try to make a profit because it was insured with PMI (Private Mortgage Insurance) so the bank’s exposure is only 80% of the original market value.  Coincidently, that’s about how much it may have gone down, plus repair costs, attorneys fees for the foreclosure, and lost interest.

Boiling this all down, it’s usually better to purchase from a seller who has priced their home at today’s market value, not what they owe, what they paid for it last year, or what they think it was worth last year.  There are many sellers out there who are listening to the market, and pricing it at market.  Those sellers are selling.  The backlog of inventory is from sellers who either won’t listen to the current market, won’t listen to their Realtor, have the wrong agent who also doesn’t know, or have a property that’s really hard to judge what the real value is.

If the seller doesn’t know the real value, the buyer isn’t likely to gamble on it either unless it’s a unique to what a buyer is looking for, or is simply irrestible.

Bottom line is, there are good values out there, just don’t count on the foreclosure market to provide them.

Your piece of paradise!

This is the beautiful Alhambra floorplan in sought after Reflection Lakes in Fort Myers Florida. Gorgeous home boasts Mannington wood floors, a built in china closet in the kitchen and gorgeous granite countertops, crown molding, plus oversized lanai (you’ll appreciate the difference) all with a gorgeous lakefront view. This is you opportunity to live the Southwest Florida Lifestyle!

Phenomenal view!

Relax!

What a bath!

Beautiful kitchen

Spacious living room!

It’s the beautiful Ellington model in Magnolia Lakes in Gateway in Lee County Florida. This 4 bedroom and 2 1/2 bath SW Florida home has never been lived in. You will love the extended lanai and the fabulous lake view. A great find in the Fort Myers real estate market!

Fantastic 4 bedroom

Wow, look at this kitchen!

What a view!

Earlier this year we spoke on our radio show about the differences between a market correction and a market crash.  Most people think a market crash is when the bottom falls out of a market, say 50%, or some large number.

Our opinion is that the number has nothing to do with it.  Right now the SW Florida real estate market is in the midst of a market correction.  While the correction may be nearing an end, I’d much rather we suffered a market crash.  I’ll explain why.

The amount of the fall isn’t what determines whether it’s a crash or correction, rather it is the time it takes to get there.  The market is like a body of water.  It will seek it’s own level, and it will get to where it needs to be, at some point.

Let’s say a year ago some real estate Guru had a crystal ball and knew the market would fall exactly 23.6%.  If the market fell 23.6% in one day, transactions wouldn’t be interrupted and we’d have a free flow of properties.  We wouldn’t have near the backlog of inventory we have now, although we might have some.  Everyone would be talking about how the market crashed in one day and how awful life was, and can you believe it?

What we’ve had all year is the market slowly coming down, and many sellers chasing the market down.  Each time they make a price reduction, the market is already ahead of them.  They start out over-priced and they remain over-priced as the market seeks its own level.  As some sellers have reacted more quickly than others, they too are the sellers who have been successful selling in this market.  Buyers are out there, and they are buying at normal levels.

In fact, they are buying at levels in 2003 just before the investor (flippers) came into our market.  And we believe there are more buyers on the sidelines who would truly like to buy, as soon as homes become affordable again for them.  We all know the story of how property taxes and homeowners insurance have eroded into their buying power.  With home prices easing back, this helps bring affordability back to the purchaser.

Anyway, back to our story.  As we know, the market will slip back to some pre-determined level not exactly known to any of us, but becoming clearer over time.  When the market comes down gradually over time we call it a correction.  When the market comes down suddenly, we have immediate transactions, and people scratching their heads wondering about the "Crash." 

I ask this question, which is more painful, the slow, methodical pain of a market coming down in price with sellers holding onto hope of prices from yesteryear, or the quick slaughter in prices where buyers and sellers know exactly where prices are, what the future holds, and a free flowing market where homes are selling?

Of course the answer is the Market Correction is more painful.  And the good news is, the sellers who have priced ahead of the market have been selling all along on the way down and will never face the cruel truth of the market bottom.  They were smart and got out, because they weren’t greedy and holding onto a number in their head based upon paper numbers valid last year.

Which seller do you want to be?

Buyers, don’t get too smug yet either.  We’ve been saying all year that buyers were in control, and this is a "Buyers Market."  While true, the best properties that are priced correctly are selling, and low balling those properties only means another buyer will come and scoop it up out from under you, and you’ll miss the buying opportunity of a lifetime.   Again, the best priced proerties sell in any market, hot or cold. Buyers lowball out of greed and fear.  Greed, because they want to pay as little as possible.  And Fear, because they worry the market may go lower and they don’t want to overpay for that.

Buyers and sellers need to be realistic, or it will cost you both.  It costs to miss buying the home of your dreams and having to buy your 2nd or 3rd choice, and it costs having to sell a home later and for less money had you not been greedy and worried that you’re giving your home away.  You’re never giving your home away, you’re simply selling it at today’s fair market price.

Let a seasoned professional assist you when buying or selling in SW Florida.  Not knowing what you’re doing is a costly mistake for both buyers and sellers.

5 Bedroom Home!

This home is the ultimate in Southwest Florida value. This Pebble Beach model in Cross Creek Estates in South Fort Myers sits on an oversized corner lot without neighbors on three sides and is professionally landscaped (look for the magnificent Magnolia trees). You will also appreciate the two new stainless Maytag air conditioners (with transferable warranty), newly installed gutters, Centex pest defense system, and rescreened lanai area complete with heated pool and spa as well as an outdoor kitchen and Jennaire grill. Come inside and prepare yourself to be spoiled with new upgraded carpet (take off your shoes and indulge your feet – there is a difference!), new paint throughout, tile on the diagonal, California closets, and a kitchen to awe the most meticulous chef: beautiful cabinets, granite, upgraded appliances including two double ovens and so much more. You owe it to yourself to see this beautiful Southwest Florida home; you won’t be disappointed.

Cool pool!

Gourmet kitchen

Beautiful lanai

Royal bath

Simply gorgeous

As we’ve demonstrated in our previous post, the SW Florida real estate market is showing the first signs of recovery for single family homes. What lies ahead for the condo market?

We believe two things about the condo market:

1. The condo market will lag behind the single family market, as there is more supply and less demand throughout 2006, and many investors getting ready to close or bail in the over $300,000 range.

2. Now is the Time for Condos to Shine. Condos are more seasonal, and sell much better Jan-April. We believe this year will be significantly better than last season. After season, we’ll sit back and analyze how much of a dent buyers made into inventory.

We expect single family homes to steadily improve from here on out as buyers wade back into the market, and sellers who want to sell become more realistic as to prices required to reach those buyers. Many sellers have made the adjustments, and buyers have responded.

Many are optimistic about the Downtown Riverfront District condominium market. We are not. We don’t buy the hype that most who have bought downtown are there now to live there. We believe most are investors, and that is one segment of the market that is and will be a Blood Bath. You can’t stereotype the overall market, and if we could we’d say overall we’re positive about the overall market going forward. We can segment the market, and when we do the Downtown Riverfront market is one segment we’re concerned about.

Earlier this year we talked on our radio show about the difference between a Market Correction and a Crash. Our next article will explain the difference, and the uncanny results.

As we’ve been stating the last several weeks, buyer calls have increased recently and showings have increased.  We believed this was a favorable sign and could lead to a turnaround in Active sales inventory decreasing and Pending sales increasing.  Both occurred this past period.  For the first time all year, inventory decreased and pending sales went up.

The amazing thing is it happened since Thanksgiving and in the first week of December, not traditionally strong showing and selling times.  This could bode well for a strong season as buyers have figured out that home sales are much more affordable this year, interest rates have actually gone down, and sellers have succumb to the fact that they must lower their List Price to get down to where the buyers are.  The sellers that have done that are selling.  The buyers haven’t left the tablem they’re still there, and they’re starting to bite.

Condo sales haven’t changed to the favorable side just yet, however we wouldn’t expect a change until season as condos are more seasonal.

Lee County Florida Current Market Statistics.

  

December 8,2006 Active Pending Months Supply of Inventory
Single Family 13,173 1,078 17.47*
Condo 8,444 543 32.23*

 *We project there will be approximately 9,048 single family closings reported in Lee County MLS, and approximately 3,144 condo sales reported.  Months supply of inventory are based upon these projections. 

November 27,2006 Active Pending Months Supply of Inventory
Single Family 13,186 1,031 17.49*
Condo 8,344 535 31.85*

November 9,2006 Active Pending Months Supply of Inventory
Single Family 13,148 1,046 17.44*
Condo 8,096 534 30.90*

October 18,2006 Active Pending Months Supply of Inventory
Single Family 12,669 1,128 16.80*
Condo 7,834 543 29.90*

 

Now available! Beautiful, newer 3 bedroom, 2 bath home in Lehigh Acres, Southwest Florida. Lehigh Acres is one of Lee County Florida’s fastest growing communities and is an ideal place to raise a family. Lehigh Acres also has so much to offer to those looking for a quiet retirement home in the sun. Southwest Florida has it all!

Spacious Kitchen

Home Office

Lanai