Because we are writing this article this week before official numbers are released, we decided to go inside the numbers and focus on listing inventory and sales data. According to preliminary numbers researched by the Ellis Team, listing inventory rose again for the 3rd consecutive month.
Lehigh Acres has been holding fairly steady while Cape Coral is seeing the largest gains in inventory. Fort Myers is inching higher ever so slightly.
What’s interesting is the distressed sales market. We track a variety of graphs. One graph not shown here because it’s a little tangled and hard to read in newspaper format shows large drops in distressed sales in Lehigh Acres, Fort Myers, and Lee County overall. Cape Coral has held steady at 50.45% of all single family sales being distressed. Lee County stands at 48% distressed rate in November.
We have included a Foreclosures Vs Short Sales graph that is a bit easier to read. It fairly well shows the history of the foreclosure and short sale market in SW Florida. As you can see, the height of foreclosure sales was in June 2009, while the height of the short sale market was March 2011.
Banks revved up their short sale departments to handle an increased load. It can be said that potentially each of these successful short sales may have saved a corresponding amount of foreclosures, so it was in the banks and the markets best interests to sell these homes as short sales rather than as foreclosures.
Going into 2012 we’re going to continue to watch the listing inventory and the mix of inventory. Traditional sales are on the rise as a percentage of all sales, although many homeowners are not selling at today’s bargain basement prices.
Speaking of bargain prices, many buyers are calling wanting to buy homes for investment and expecting 2009 prices. It seems like sellers are always the last to recognize when prices are dropping and buyers are the last to recognize when prices are rising. Why is that? Could it be selective hearing or denial?
We can definitively say that investment homes in Cape Coral and Lehigh acres bottomed in 2009 and have risen since. Buyers today can no longer pick up a home for $35,000 in Lehigh unless it has major problems. $70,000 is more common place for the low end now, so essentially prices in the low end have doubled.
Sales are flat in December versus November; however we are expecting sales to pickup in season again. We’ve had no trouble selling homes. The biggest challenges we’ve faced are closing these homes. Lately we’ve been encountering title issues, mortgage re-disclosure issues due to any delays, and buyers not waiting patiently for the short sale approval. We’re getting short sales approved within 60 days in many cases, but buyers are impatient. Going forward the industry will have to do a better job educating buyers as to what the realistic expectations are for approval and closing time frames on short sales.
We’ll also watch foreclosure inventory as we are expecting a few more in the 1st and 2nd quarters of 2012.
We’ll keep our eye on the SW Florida real estate market for you, and whether you’re a buyer or seller, we hope Santa is better to you this year than he was last year. The market is looking up, and we hope your holiday spirits are too.