The SW Florida real estate market has been a steady as she goes type of market through 2015 with mostly upward price gains, falling inventory, and higher pending sales than last year. This changed in September as pending sales fell for the first time to below 2014 levels.
Median sale prices have been up over 2014 all year, and September saw this largest yearly gain for the year at a 20.9% increase in median price. Average price tells a different story. We’ve had three negative months this year compared to last, and we’ve had two months (March and July) with average prices up over 30%. For the most part average sale prices have been more tempered though.
New Pending Sales in SW Florida Fall Slightly in September
New listings in September increased over August by 59 homes but were down 6 homes from last year. So if new listing inventory fell by 6 homes this September versus last year, how is it that inventory actually rose in September versus August?
Some pending deals must have fallen out combined with fewer new pending sales in September would explain it. We would have thought with new Federal lending laws going into effect Oct 3rd we’d see more pending sales in September but that didn’t occur.
Again, we caution about reading too much into monthly numbers. You’ll see from the Active Inventory graph listings in September fell last year, but they actually rose the previous two years. So this isn’t a new phenomenon or trend.
We’re also keeping an eye on median prices versus average prices. Average prices can be skewed by large sales so it isn’t as reliable, but if there is a trend we want to know.
As prices rise the market begins to price out some home shoppers. This can account for why pending sales decline. Rising home prices affects home affordability. If wages increased home buyers could afford more. There is probably more room for price gains as not all of our buyers in SW Florida are dependent on wages. Some are buying 2nd homes, retirement homes, or investments. Rising rents make these investments even stronger.
Another thing that could drastically affect affordability is interest rates. As rates rise it changes the affordability equation. We’ve already seen an uptick in rates and more are expected. With prices increasing we expect more homeowners to put their home on the market. If and when that happens, buyers will have more choices.
We’re about to see all market forces come into play. When the market crash we saw a few market forces cause the crash, and in the recovery since we’ve seen a few market forces influence the market.
Going forward we’re going to see all market forces sway the market. This is a sign of a healed housing market. We’ll see less volatility and more economics in play.
We’ll be looking at wages, inventory supply, new construction supply, oil prices, unemployment, labor force participation, interest rates, national and global conditions. It really is exciting to get back to normal market conditions as buyers and sellers can more comfortably predict the stability of the market.
We are not seeing overbuilding by the builders. In fact we could use some more building. If you’re a buyer and want to search inventory visit www.LeeCountyOnline.com It has all the listings and it’s updated every 5 minutes.
If you’re a seller, you’ll want to talk to us. We have a marketing program we’re sure nobody else has and it’s generating some nice results for our sellers. We’ll be glad to sit down and show you why there is a difference and what it can cost you if you don’t use our “Secret Sauce.”
Good luck and Happy House Hunting!
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