Official sales numbers haven’t been released yet, so we study inside the numbers to see what the market is doing. Our analysis shows single family home sales in December shot up 32% over November, and condo sales shot up over 54%. We’ve been reporting the past few months pending sales have been building which could lead to a surge in closings. December began that surge.
Foreclosure closings in Fort Myers proper almost doubled from 65 to 123. Short sales climbed from 49 to 68. 57.19% of the Ft Myers single family home market was distressed, up 10% from the previous month. This tells us banks allowed more short sales to close, and we were finally able to close some of the foreclosure sales that were tied up.
Cape Coral experienced a 35.81% rise in home sales. All facets of the market rose, foreclosures, short sales, and regular sales.
County wide foreclosure sales were up 55.19%, while short sales were only up 13.33% So of the 32% increase in overall sales, a large part was due to an increase in foreclosure sales. Like it or not, foreclosure sales are not only leading the market, they’re almost dictating it. Distressed sales county wide last month accounted for 59.90 of all single family home sales, and foreclosures accounted for 41%.
So here’s the breakdown. Traditional sales 40.1% Foreclosure sales 41.3% Short sales 18.6%. Distressed sales are driving this market, and probably will for some time until employment rises in the area. Many national news outlets are running with stories that Florida and our area will see further declines. This is a case where the authors really don’t understand the market.
We’re not ones to fluff up the market. In fact, we predicted declines in prices, and most would say we’ve been pretty spot on in our price and volume predictions. While nobody can be perfect about something that hasn’t happened yet (The Future) we believe SW Florida was the first in crisis and our crisis may last longer because it was more widespread, but we’re in the later innings of the foreclosure crisis.
Most of our investors have already folded their cards and ran. Today we’re left with more foreclosures, but they’re due to people losing jobs and income versus legacy investment choices. Oh sure, there are some investors still losing their properties, but the debt issues (Resetting Adjustable Rate Mortgages) set to reset later this year isn’t much of a factor here as those investors are already gone. This will be an issue up North more than here.
I hear people say today’s foreclosures are a result of bad loan decisions. Again many of the early defaults were, but today’s defaults are more from average people losing one or more incomes. These loans were a good decision at the time, but things change when unemployment exceeds 14%.
We look for solid sales volume going into season as visitors realize our prices are bargains and they’re trying their best to scoop them up. A few are going for blood and are realizing they’re not in competition with the bank, but other buyers and they’re losing out in multi-offer situations.
Buyers in this market are wise to listen to local experts rather than national experts who haven’t studied our market and what factors are influencing it right now. If I had a dime for every buyer who said they should low-ball because our market is going lower I’d probably have more money in my pocket than I do now. Those same buyers would have a nice home at a nice price and wouldn’t be on the outside looking in wondering how they’re going to buy their little piece of SW Florida paradise.
Sellers are the last to realize a market has topped and buyers are last to realize a market has bottomed. While all segments of the market may not have bottomed, many have, and the wise buyer will reset their expectations and go get their piece of paradise before someone steals their gem right out from under them.
In case you missed it, be sure to check out our SW Florida Real Estate December 2010 Video Update