The Florida Association of Realtors released real estate sales numbers for Florida today, and the Fort Myers – Cape Coral single family home sales slid 39% from 694 last year to 426 this year.  This was in line with what we expected based upon 2007 sales trends.  See SW Florida Real Estate Homes Closed 2005-2007 graph.

Median sale prices of single family homes were down 7% from $264,600 last year to $246,100 this year.  This was in line with what we were thinking based upon our SW Florida Real Estate Sale Prices 2005-2007 graph and closed sales data obtained through the MLS.  Median sale prices have been down 3 straight months, and has trended down 4 out of the 7 months so far in 2007.  See SW Florida Real Estate Month Over Month Prices graph.  Median sale prices are down 13.1% in three short months.

Prices are down significantly from the highs of the market in 2005, and coupled with recent market price adjustments and the volatile credit availability supply, we think now is the time for buyers to jump in and purchase.

The home buying climate is as favorable as it has been in a long while with excellent supply selelction, lower demand, and prices making affordability an option again for many first time home buyers.  What may hurt home buyers in the future is limited financing options.  We are seeing credit programs dry up by the day, which means many buyers who qualify to get financing today won’t in the future.  The sooner they get locked in the better.

View July statewide sales numbers for single family homes, and view statewide sales numbers for July condo sales.

The Ellis Team at RE/MAX Realty Group is proud to announce it is getting back into the Virtual Tour game as a marketing tool for their listings.  We went away from virtual tours for a few years because studies showed providing virtual tours was the #1 way to lose a potential customer on a website.

Viewers quite often would become dizzy watching moving pictures, or waiting for tours to load, and waiting on multiple scenes per home.  Studies showed in the past that viewers would watch 2.1 virtual tours, then leave the site they were using altogether.  Instead, the Ellis Team provided multiple photos on one page so customers could see at a glance if the property was something that interested them, saving them much time and aggravation.

The technology has now changed, and we’re able to provide much needed data at a glance, as well as still and moving pictures that load quickly and do not make people dizzy.  The tours are also visible to Spint PCS Vision mobile phone users.  Sprint users can enter a tour number directly into their phone and the tour will display the photos and information on their phone as they are sitting outside.

In addition to making the tours more friendly to buyers, sellers will also appreciate certain benefits, like weekly charts showing home many times their property was viewed online, a CD of their home after it is closed, and automatic distribution to Move.com, Google Base, Yahoo Real Estate Classified, Home Debut, Dupont Regsitry, and more.

Other agents are cutting back in a down market, and the Ellis Team knows this is the time to bump up the marketing to give their listings the added boost to stand out from the crowd.  The online virtual tours are just one more way the Ellis Team is stepping up to get property moving again.

To view the tours, simply go to www.topagent.com and click on the Virtual Tours link, or visit the Ellis Team Inventory of Virtual Tours.  Check back daily as we’ll be adding all our listings shortly.

Have you heard the old cliche, "There’s always two sides to every story?"  While only a cliche, it certainly rings true in most things in life, and media reporting of the real estate market is no exception.  Each week a different expert; some local and some national, chime in about what they think will happen to the real estate market.

The problem is, such reporting is usually one-sided, and while they quote facts, the facts are carefully selected to promote the same old story, week in and week out.  The real estate market, especially the market we have here in SW Florida is constantly changing, and sometimes at a high rate of speed.  It’s incumbent on the reporting to change with the market and not be attached to the outcome.

It’s less important to be right with your predictions than it is to be current and factual.  Our focus in writing for the News Press will be factual, current, and balanced.  We intend to tell both sides of the story.  We’ll report poistive as well as negative facts, and offer our interpretation as to what they mean.

This balanced reporting should offer both buyers and sellers a fair way to assess their position and motivation in this ever-changing market, and should help everyone benefit.

Being fully informed will help everyone make up their own minds, instead of being forced to make heads or tails from what has been presented.

Our first article tackles the issue of short sales and foreclosures, and whether they will cause further decline in the SW Florida real estate market as some have speculated.  Read this article for yourself, and make up your own mind.

Active inventory fell slightly in SW Florida again for the 4th straight month, as did pending sales.  The market seems to have settled into a holding pattern.  Foreclosures have been rising to about 1,000 per month.  Foreclosures are sold on the courthouse steps, so many of these would be in addition to these numbers.  The wildcard in all this is that many times there isn’t a buyer at the courthosue steps and the bank ends up taking the home back.  These units will eventually hit the market, and some are already included in the exisiting inventory numbers.  We have many short sales listed in MLS too which are included, so if and when those go into foreclosure they will not add to the inventory.

The higher the CMI Index, the more supply we have relative to demand.

August 15, 2007 Active Pending CMI
Single Family 14,919 955 15.62
Condo 8,190 417 19.64
July 12, 2007 Active Pending CMI
Single Family 15,095 975 15.48
Condo 8,380 443 18.91
June 14, 2007 Active Pending CMI
Single Family 15,164 1,014 14.95
Condo 8,761 485 18.06
May 17, 2007 Active Pending CMI
Single Family 15,607 1,107 14.10
Condo 9,205 560 16.44
April 15, 2007 Active Pending CMI
Single Family 15,896 1,152 13.80
Condo 9,660 569 16.98

January 23, 2007 Active Pending CMI
Single Family 13,769 1,016 13.55
Condo 9,002 529 17.02

November 27, 2006 Active Pending CMI
Single Family 13,186 1,031 12.79
Condo 8,344 535

15.60

Has the SW Florida real estate market bottomed out yet?  One noted economist thinks so, others are not so sure. This is one of the questions we hear most, perhaps second to "what’s my property really worth?"  To put the SW Florida real estate market in perspective, let’s visualize a championship boxing title fight for a minute.

The "Champ" is the SW Florida real estate market.  It’s been the champ for many years running, easily since the 80’s.  The "Challenger" is the market correction since mid 2005.  The challenger has surely gotten his punches in, scoring many, many times.  In Rd 1, (Sept-Oct, 2005) the challenger rocked the champ before the champ even knew what hit him. 

By Rd 2 (Jan-Mar 2006) the champ rebounded, trading punch for punch with the challenger.  The challenger didn’t realize that the champ had a few unknown punches up it’s sleeve (price reductions from educated sellers).  This champ was far more experienced than the challenger, and yet the challenger had youth, energy, and resilience.

The challenger scored knock-downs in Rds 4 and 7, stunning the champ with a series of upper-cuts (low ball offers) and body shots (Actually walking away from counter-offers).  The champ hit the canvas, and each time picked himself up, dusted himself off, and returned to boxing.  This was the champ after all, and no smart-mouthed inexperienced challenger was going to take his title away, at least not yet.  The champ has experience, and remembers back to 1991 when recession hit and sales were slow.  This time seemed different though, perhaps a little harder.  Is the challenger stiffer competition now, or was the champ just soft and fat from the good times.  Time would tell.

The fight would wear on, and both would exchange blows.  The champ would bounce back and rock the challenger, and vice versa.  At times it looked like the challenger was about to put the champ away and other times it looked like the champ was about to foil the challenger’s bid to become champ.  Each fought mightily, heroically, without reprieve.

How does this fight end?  Right now the champ is on the ropes, staggering.  The champ is not defenseless, but it is growing weary.  The champ didn’t realize it was in for this much of a fight.  The champ hadn’t trained for this.  The champ had many handlers, and not all were in the best of shape.  Some had become lackadaisical, complacent, and content.  The champ needed new blood, but blood with experience and know-how.  Many of the champ’s trainers have left the business.  The champ is leaner, meaner, and angry.  We’ve identified 10 key areas that will decide this title fight, and we’ll tell you what they are here:

1.  Demand- Demand has held fairly steady.  This market would really be in trouble if demand fell due to economic conditions, layoffs in a community, etc.  In fact, we believe there is pent-up demand from nervous buyers who have been waiting for prices to come down. See NAR Pending sales outlook, and SW Florida Homes Closed Chart.  You can also look at July Current Market Index.  August Index due to be released tomorrow, (Advantage Champ)

2. Supply- Supply has fallen each month from all-time highs set back in April of 2007.  We’ll be posting new Current Market Index numbers tomorrow once we pull the new data.  Supply is still considered very high, and we will not see any price appreciation until we eat into these high levels.  (Advantage Challenger)

3. Interest Rates- Interest rates are historically low, but have been rising in recent months.  Each rise in interest rates works against buyer’s purchasing power.  Buyers on the fence should purchase now.  If they don’t, they may be squeezed out of the property they wish to buy.  (Advantage Champ)

4. Insurance- Insurance costs affect total cost of ownership.  As insurance costs rise, buyers purchasing power is lessened.  The Florida legislature passed sweeping legislation designed to lower insurance premiums in 2007.  Results have been mixed.  Some rates have fallen, other rates have still risen.  Had the legislation had the intended affect of lower premiums across the board, we would have put this category in the champ’s column.  We just cannot do that today. (Advantage Neutral)

5. Taxes- The Florida legislature did pass legislation that will lower taxes for many, and provided a constitutional amendment that if voted and approved  in January 2008, would really help new homebuyers afford taxes in their new home.  Essentially new homebuyers were subsidizing long-term residents.  Even long-term residents complained because they felt trapped in their existing homes and could not afford to move due to tax consequences.  This new tax system dramatically lowers property taxes on purchases, and could spur a frenzy of buying activity once enacted. (Major Advantage- Champ)

6. Oil and Economy- Oil prices have retreated, and the national economy is actually doing very well.  Unemployment is low, and the economy is growing.  Inflation is still a risk, but overall the economy isn’t much of a factor one way or the other.  A significant change could affect our local real estate market.  (Advantage-Neutral)

7. Terrorism- Terrorism incites fear of safety.  The fact that the US hasn’t really seen a terrorist event on US soil since 9/11 bodes well for the war on terror.  Ironically, the real estate market shot up after 9/11 because people decided family was important and they decided to "bunker" the event.  "Bunkering" refers to people investing more in their home and traveling less, and developing a sense of home, family bonding, and safety. (Advantage Champ)

Here come the 3 Big Wild Cards:

8.  Buyer Confidence- It seems every day buyers read how bad the market is, both locally and nationally.  Each day so called experts proclaim the market will fall, prices could plummet, the sky is falling.  Simple economics of supply/demand are in play here, but we’re dealing with people’s emotions.  Sellers are emotional, as are buyers.  Newspapers sell headlines, and experts make names for themselves by predicting this and that.  These predictions have served to knock some sense into stubborn seller’s minds, but not all national stories have properly educated buyers as to what’s really happening.

Sensational headlines don’t make every seller reduce their prices so it will sell, because in fact not every seller can reduce to where the market is even if they wanted to.  Sellers need to be educated in this market, and that’s true in any market.  Certain people will always be greedy and think whatever they own is worth more than it is.  Most sellers we meet with do understand the market is down significantly from its highs and they see their neighbors For Sale signs go up and not come down.  Most sellers are tuned in, some are not and will never be.

Sensational headlines do scare buyers though and destroy their confidence.  Buyers mistakenly low ball homes that are a real bargains when they shouldn’t, and cause some to sit on the fence when their best deal is in front of them.  Destroying buyer confidence hurts both the buyer and the seller.  Buyers need to be educated just as sellers do.  Buyers should not assume All properties are over-priced, or that there aren’t bargains out there when there clearly are if you know how to find them.  Buyers should only look at the homes that are priced at or below the market and leave the above the market properties alone.  (Advantage Challenger)

9. Foreclosures-Foreclosures are at an all time high, and it remains to be seen how the banks will respond.  Traditionally banks have been slow to respond on price.  It’s taking banks longer to acquire property through foreclosure because the banks and the system are backlogged.  While the properties sit in foreclosure proceedings for many months, bad things are happening.  Lawns are not being mowed, air conditioners, appliances, and doors are being stolen, and the home can be vandalized, not to mention all the routine upkeep that’s not being done.  The foreclosed property is usually a blight on the neighborhood, and some neighborhoods have more than one foreclosure in process.  Nobody knows the full effect foreclosures will have on the market, but we can say this situation will linger for some time as banks acquire and dispose of these eye sores. (Advantage Challenger)

10. Lending- Buyers with pending contracts are about to find out that their loan comitment may not be as secure as they thought.  Banks and Wall Street are tightening up.  See Mortgage Market Mayhem article. Much of the sub-prime lenders received their financing money through Wall Street, and Wall Street is under intense scrutiny for these investments.  Mortgage brokers who specialized in getting alternative financing for people without verifiable income or marginal credit are seeing their lending sources squeezed to almost nothing.  Money for these types of loans is drying up fast.  Banks still have money to lend, but you may not get it unless you have excellent credit, verifiable income, or are putting substantial down.  Too many fraudulent loans occurred in recent years, and SW Florida was a hotbed for such illegal activity.  Lenders are scrutinizing SW Florida deals, and banks are taking a hard look at all appraisals, especially whereby the buyer has little down or less than perfect credit.

Banks have raised minimum credit scores for making loans.  We predict we’ll see a comeback in the government FHA and VA programs.  We had a falloff because simply it was easier to receive one of these other types of loans in the past.  Not any more.  Buyers, if you’re sitting on the fence waiting for a deal, you might want to go find one of the deals that are out there now and get the financing while you can.  It could be that you may not qualify 6 months from now for the loan on the house you wanted, and you could miss out on buying at or close to the bottom. (Advantage Challenger)

We apologize in advance for the length of the article.  We could have said so much more, so we tried to bring you the bare minimum as to what’s affecting our market.  Whether the Champ wins or hits the canvas once more is up for discussion.  We’re not into painting a one-sided picture.  We’re not tied to the outcome.  We’d rather present you with the facts and let you make up your own mind.

As you can see from the charts, showing activity fell modestly from May 2007 levels.    Encouraging news is showing activity has picked up each week of the average listing.  There are slightly less homes in MLS than in months past, so this could be a factor, or it could be that agents and sellers have priced homes much closer to where the buyers are now and it’s generating more showings per listing on average.

July 2007 Statistics:

Total Number of Showings July 2007 661
Average Number of Showings Before Selling 9.5
Average number of Showings During 1st Week of Listing .5
2nd Week of Listing .6
3rd Week of Listing .7
4th Week of Listing .4
5th Week of Listing .3
6th Week of Listing .4

 May Statistics

Total Number of Showings May 2007 760
Average Number of Showings Before Selling 6.5
Average number of Showings During 1st Week of Listing .2
2nd Week of Listing .4
3rd Week of Listing .4
4th Week of Listing .2
5th Week of Listing .3
6th Week of Listing .3

 

April 2007 Statistics:

Total Number of Showings April 2007 889
Average Number of Showings Before Selling 6.3
Average number of Showings During 1st Week of Listing .2
2nd Week of Listing .3
3rd Week of Listing .3
4th Week of Listing .4
5th Week of Listing .2
6th Week of Listing .2

 

March 2007 Statistics:

Total Number of Showings March 2007 938
Average Number of Showings Before Selling 6.7
Average number of Showings During 1st Week of Listing .6
2nd Week of Listing .4
3rd Week of Listing .3
4th Week of Listing .3
5th Week of Listing .3
6th Week of Listing .3

 

February 2007 Statistics:

Total Number of Showings February 2007 962
Average Number of Showings Before Selling 5.5
Average number of Showings During 1st Week of Listing .4
2nd Week of Listing .2
3rd Week of Listing .3
4th Week of Listing .3
5th Week of Listing .2
6th Week of Listing .2

 

January 2007 Statistics:

Total Number of Showings December 2006 945
Average Number of Showings Before Selling 6.0
Average number of Showings During 1st Week of Listing .3
2nd Week of Listing .4
3rd Week of Listing .5
4th Week of Listing .3
5th Week of Listing .3
6th Week of Listing .5

Business leaaders want a halt in construction downtown because of the disruption to their businesses.  Others say construction progress will lead to future business in downtown Fort Myers.

Fort Myers Florida Weekly Newspaper interviewed Brett Ellis of the Ellis Team at RE/MAX Realty Group in Ft Myers, and our response was the chicken and the egg theory as it relates to housing downtown.  The article presented both sides and went fairly in-depth on a number of issues affecting development, housing, and business in downtown Fort Myers.

The Ellis Team at RE/MAX Realty Group in Fort Myers, Florida introduces a new way to search for listings inside a subdivision.  Simply by going to www.topagent.com, customers can scroll down to the Neighborhood search section and search from pre-selected neighborhoods.  We will be adding neigborhoods frequently, so check back often.

Additionally, customers can search for specific homes by location, MLS number, size, etc by utilizing our www.Leecountyonline.com  It’s the easiest search tool in SW Florida real estate.

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Hank Fishkind says the Florida housing market bottomed months ago and is on a slow road to normalcy.  Fishkind did mention the Miami condo market is still in serious trouble, but that market will not affect the rest of the state.

In SW Florida closed sales have stabilized, and inventory has fallen just a bit.  We’re seeing buyers regain their swagger and are making offers.  The sluggish real estate market in SW Florida is shifting away from buyer’s fear of buying to credit issues.

In the past, buyers were fearful of buying because they were convinced prices would keep falling.  Buyers are more confident now is a good time to buy as prices have dropped dramatically.  What’s different today is that many banks are not lending like they were a few years ago, and it’s causing a credit crunch.  Banks and mortgage brokers have come under increased scrutiny due to the sub prime lending issues of the past.  Now banks are taking greater care to make sure borrowers have income, assets, and documentation to prove the loan.  Banks are also questioning appraisals, and in many cases looking for any reason Not to make the loan.

This has and will cause pressure on the real estate market for the next few years as marginal buyers are now out of the market.  Solid buyers have been waiting for Tax Reform and Insurance Reform.  They’ve partially received both, and may receive even more by the 1st qtr of 2008.

Long-term investors are wading back into the water scooping up bargains from other weary short-term investors and home sellers in trouble.  This is all a sign the market is recovering.  The process will not happen overnight.  We still have over 14,800 single family homes on the market in Lee County.  Building permits have fallen, which is another good sign.  Resales one day will no longer have to compete with builder inventory and high discounting once this backlog is finished and sold.

Builders are pulling out of SW Florida, among many other places.  Builders realize they cannot continue to build and oversupply the market like they did a few years ago.  It’s not in their best interests, as builders are not in the business of losing money.  All this leads to a market recovery.  This recovery will be slow, and we won’t see large price gains like we have in the past.  Not all markets and sub-markets will react in concert, as real estate has proven to be an inefficient market compared to the stock market.  What is certain is that eventually the real estate market reacts, and it all works out in the end.