The December 2008 Ellis Team SW Florida Real Estate Current Market Index again showed improvement from last month’s index. The Current Market Index now stands at 6.65, down from 6.89 in November. The lower the number the better the market is for sellers. Transactions in the Fort Myers and Cape Coral real estate markets were up again significantly over last year as our index predicted it would be. Single family home sales in Fort Myers and Cape Coral were up 78% over last year’s numbers in October.
Single family inventory is down 12.42% from last year’s numbers. In December 2007 we had over 16,000 single family homes for sale in Lee County and now that number is down to slightly over 14,000. With sales up around 80% over last year’s numbers and inventory declining, many would say that 2008 has been a year of recovery for the SW Florida real estate market, but we cannot do so until prices stabilize. Median prices have continued to head lower all year and this is why Fort Myers and Cape Coral has bucked the state and national trends, because value and affordability are back in the market.
In fact, prices are so far below replacement costs that first time home buyers and investors alike are scooping these properties up as fast as they come on the market. While more foreclosures are scheduled to hit the market in 2009, many are condominiums and vacant land. We are doing a study right now along with the SW Florida Real Estate Investment Association to determine how many Lis Pen dens filings are actual home foreclosures. Keep in mind, a property may have multiple Lis Pen dens filings which may skew the numbers, so we may not see as many foreclosures in 2009 as some are quoting.
Local mortgage companies are reporting fixed rates in the 4.5% range today with 1 point. Loan amounts are also on the rise, which could signal an up tick in future home buying in higher price ranges. We don’t look for drastic upward changes to median home prices, however we do like to look at mortgage applications to get a reading on potential future purchasing activity.
We see regular negative articles and news stories about the real estate market, but the numbers tell another side of the story. Sellers do not like today’s prices, and nobody knows where tomorrow’s prices will be for sure, however we can report there is a market at the right price and this market has been posting large gains all year. We think many buyers and investors have figured out there are tremendous buying opportunities available now and they’re not listening to the Downers in the market.
If you really want to know how a market is doing, follow the money. Buyers are back in this market because the prices are Right. It’s a lot like the BCS polls. Don’t follow what the polls say; follow the Vegas odds, because that’s where the money is. It’s amazing how much better the money does in picking games than the experts do. The numbers always tell a story. The real wisdom is deciding not which expert to listen to, but which numbers you should follow. In the SW Florida real estate market you can look at falling median prices, or increased sales. Both tell a story, and we’ll leave it to the market to decide what the numbers mean. We just thought we’d present another side you may not be seeing in the media or hearing from other experts and let you decide.