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There is good news and bad news in this months Current Market Index Report. First, the good news. I decided to pull this data a few days earlier than normal because I will be out of town. The good news is that traditionally, pendings pick up in this part of the month, and I didn’t give the extra 3 days for that to happen, which would lessen the CMI Index number if this pans out.
Secondly, I’ve noticed a fair number of duplicate listings for the past several months in the data source we’re using. We’re using an Alliance database which allows us to pull in from several MLS sources. The disadvantage is that many Realtors across SW Florida are inputting their listings into multiple MLS’ which duplicates the reporting to the Alliance. The good news is there are far fewer listings than 15,000 being reported.
Lastly, listing inventory is dropping, even with the duplication of listings, so this can be viewed as a good sign.
Now for the bad. The CMI number is rising because pendings are dropping slightly more than the listings are dropping. A rising CMI number is not good for the market, and it has been rising each month as you can see from the chart.
Secondly, when you duplicate active listings, you also duplicate pendings, and some of these numbers being reported may be too high as well.
This may be a sign that weary home sellers have simply given up trying to sell. Sales have not picked up yet like we would like, and some sellers may be taking their home off the market, or are giving the home back to the bank. These listings could eventually come back on the market, but it will be some time as banks take forever to make decisions on short sales and the foreclosure process is slow. And don’t look for banks to offer deals on these properties either.
Builders have been making tremendous deals, if you know where to find them. The good news is the deals will end soon as builders have done a good job of unloading inventory. Existing home sellers one day won’t have to compete as much with new construction, and when that day occurs, there will be somewhat less pressure on home sellers.
All in all, we have a mixed market, as is par for the course the past several months. Will tremendous buying opportunities in this buyers market, along with low interest rates, property insurance costs dropping significantly on July 1, 2007, and lower property taxes spur buyers to buy in this market? Stay tuned as we have some interesting months ahead of us.
The higher the CMI Index, the more supply we have relative to demand.