Last year we warned about interest rates and what it could do to home buyers and sellers.  Since that warning interest rates have climbed .82%.  The consensus on the street is we’re not done yet.  Today we see rising interest rates squeezing home buyers and lowering affordability which can ultimately affect both buyer and seller.

Rising Interest Rates Squeezing Home Buyers and Lowering Affordability

A simple rise in rates robs a home buyer of between 10-11% of purchasing power.  In the example in the graph, a $200,000 home buyer before the rate increase now only qualifies for $180,000.  Let’s say the buyer still qualifies for $200,000.  Their monthly payment just went up $114.82.  Nothing else changed.  The purchase price is the same, the amount financed is the same.  The only thing that caused that payment to go up was the interest rate.  Over 30 years that increase adds up to $41,335.20.

Simply by waiting a year to purchase it cost a home buyer more payment or less house.  When you combine that with home price increases, it’s a double whammy for buyers.

We’re not done yet.  Experts are predicting rates to shoot up to 5% by the end of the year, and perhaps 6% by the end of 2019.  Even if they only raise half of that, you can clearly see that waiting costs more than it’s worth.  For home buyers, the time is now, and the sooner the better.

We have buyers just waiting for their lease to end.  In some cases, it makes sense to break the lease and pay the penalty.  Some apartments have a 1-month rental penalty.  Other landlords charge much more, so it’s wise to look at your lease and consult with an attorney.

Right now, we have limited inventory, so homes go fast.  As rates continue to climb, it will put more pressure on more buyers.  The pace at which the market can appreciate will have pressure on it.  If you’re a seller, you might want to think about listing now, for several reasons.

If you have a mortgage, chances you’ll get a mortgage on your new home.  Waiting to sell your home will cost you too when you go get a new mortgage.  Additionally, as rates rise, there will be fewer buyers that qualify for your home.  Lastly, as buyers begin to qualify for less and move down a price bracket, listings may rise in your price bracket.  When this occurs, price appreciation can stop.

If you’re waiting for prices to climb further, it’s a risky strategy.  Sure, price may climb higher, but it may still cost you.  You may not gain anything, and you’re taking a risk.  It’s more fun to sell when inventory is low.  And it’s more fun to purchase before rates rise much further.

Rates are still pretty low historically speaking.  We’re still in the 4’s.  I remember double digit rates.  The point is, even though rates are low, why pay more than you need to?  Next year, you’re likely to pay more.  The economy is heating up, and this drives pressure for rates to rise.

You know you want a new home.  The only thing holding you back is your home is still appreciating, and you don’t know where you’d go.  Give Sande or Brett Ellis a call at 239-489-4042 Ext 4 and we can walk you through the steps of a possible move.

We can figure out how much you’d net on the sale of your current home, and what it would take to get you a new home.  We can discuss financing options and how we’d structure the deal to make it work for you.  You never know until you speak with us.

Or, you can search the market online at www.LeeCountyOnline.com We’re here to help you today, tomorrow, or down the road when the stars align for you. We just want you to have the best information available, so you can make the best decision for your family.

Always call the Ellis Team at Keller Williams Realty Fort Myers & the Islands!

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Big Online Advertising Changes Affecting Realtors Marketing Results Visitors by Country

We knew online advertising changes were coming.  Facebook, under increasing pressure from the government, changed its targeting of consumers to avoid discrimination claims for things like housing and other industries.  Let’s talk about big online advertising changes affecting Realtors marketing results.

The funny thing is, many of the things we were targeting were not discriminatory at all.  For instance, we used to target a group in Facebook “Likely to Move” or renters.  Renters are always a good group of people to target as eventually many of them would love to own a home.  Many Realtors would send out mail pieces to apartment complexes specifically targeting renters.  I don’t see how targeting renters on Facebook is any different, but whatever it takes to satisfy the government, I guess.

Big Online Advertising Changes Affecting Realtors Marketing Results

We believe going forward realtors will give up on Facebook advertising when they no longer get the results they’re used to, but they shouldn’t.  This past week we had 4 open houses which we advertised in the newspaper as well as several online sites.  Additionally, we selected 4 Facebook target groups.  2 groups were accepted.  Facebook denied 2 groups even though I made the appropriate changes they suggested.  Their system just wasn’t equipped to allow the ad.

So, I spent most of the day yesterday studying their system.  I was able to crack the code and I’ve identified several new targeted audiences I think will produce good results for our sellers.  With every obstacle an opportunity is presented.  Not only will these new audiences present opportunities, so will the failure of other online ads.  When other Realtor’s ads are rejected, and they surely will be because Facebook doesn’t know any better, Realtors will give up.  Their ads will either be less effective or won’t run at all.

By spending a whole day studying the system, we’re betting this will pay off big for our clients.  The other thing I think is important is we don’t put all our online eggs in one basket.  The Ellis Team are huge advertisers on Google, Bing, Yahoo, and many other effective sites.  We advertise where they online eyeballs are.  If they shift, we shift.

Big Online Advertising Changes Affecting Realtors Marketing Results Visitors by Country

Facebook made these changes in August, and yet I just pulled up our online numbers.  We have many websites, so I just picked LeeCountyOnline.com for a look.  In the past 30 days we had almost 5,000 unique visitors.  We’re able to track which country they come from, and even what state.  We can track which pages they like, if they’re on desktop or mobile, and lots more.

Big Online Advertising Changes Affecting Realtors Marketing Results Visitors by State

Top Countries

It’s interesting to note that Germany and Brazil are generating lots of visitors followed by Canada and France.  Inside the United States we note that New York and Wisconsin are the most popular outside of Florida.  One of our buyer agents commented on how many people they are working with recently from Wisconsin.  The online numbers bear that out.

New York and New Jersey both made the top 10 list.  It’s no surprise as taxes are high in those two states because they limit out on the SALT deduction, more are moving to Florida from those states.

If you wish to attract foreign buyers, or buyers from other states you must have an effective online advertising strategy.  As you can see from the stats, The Ellis Team has figured it out.  Much of what we do is effective organic content, and much is paid search advertising.  One without the other is only half a strategy.

If you’re thinking of selling your home, please contact Brett or Sande Ellis 239-489-4042 Ext 4.  We’ll show you how we can put our print and online advertising to work for you, so you too can reach these buyers.  If you’re a buyer and you’ve found us, you can call us too, as we enjoy helping people buy their dream home in paradise.  Remember, Always Call the Ellis Team at Keller Williams Realty!

Visit www.SWFLhomevalues.com for a FREE online valuation of your home.  It’s a great place to get started before you’re ready to meet with a Realtor.

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Cape Coral Pool Home

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San Carlos Park New Construction

What a difference a month makes.  A little over a month ago we were reporting rising inventory and median price increases of .8%.  Since then, inventory fell by almost 100 homes and Southwest Florida median home prices rose 8.2% in July from last year.  They rose 2% from June numbers alone.  The average price increase in July was 15.8% over last year and was about steady from the previous month.  One of the reasons we use the median price is it’s more stable and is not subject to wild fluctuations like the average is.

Southwest Florida Median Home Prices Rose 8.2% in July

In any event, both indicators are healthy gains.  All we see or hear in the media is how the water crisis is taking a toll on business and real estate sales.  Perhaps it is affecting waterfront real estate sales, however statistically we can’t say it’s hurting the overall market.  You must be careful not to buy into negative news.

At the Ellis Team, we’re all for reporting the news accurately.  It usually tells a story, but not always the story you think.  We like to look at the numbers and see if there is a cause and effect.  Sometimes there is, and sometimes there isn’t.  What is a problem for some becomes an opportunity for others, and we’re not just talking about the water crisis.

If you let outside influences affect your outlook, it can become your reality.  If you’re a real estate agent and you believe the market is down, you’ll sell as if the market is down.  When you believe the market is good, you’ll sell that way too.  You’ve heard the sayings, “Anything the mind can conceive, it will achieve”, and “Perception is reality”. This is 100% true.

We’re not saying agents should pump themselves up by saying the market is something it isn’t!  The sooner you identify and tackle reality the sooner you are on your way solving an issue. We are saying that agents and the public should seek first to understand before making broad assumptions.

If you were a military planner, you wouldn’t attack New Zealand because Syria was acting up.  You’d look at the whole situation and determine if force was even necessary to begin with, and if so, where.  The same is true in real estate.  Salt water waterfront may be affected while fresh water and non-waterfront might be on fire.

I haven’t gone in and done an in-depth analysis of salt water sales, so I can’t even tell you if it’s being harmed nor by how much.  I’ve seen agents on TV telling us how bad it’s affected their sales.  While I don’t doubt that, you must ask the question.  Is that their perception making their reality come true, or is it fact?  It could very well be fact, and perhaps one of these days we’ll research that and report to you what we find.

If you’re a buyer, or seller, it pays to know which segments of the market are hot, and which are not.  It affects how soon you must place your offer when you find a nice home, and how close to asking price you should offer.  The Ellis Team are experts at counseling buyers and sellers.  Sande and Brett each have over 30 years’ experience, and we have a team of agents we meet with every week and discuss market conditions.

Last week one of our agents identified a hot buy alert on a property in Cape Coral.  One of our other agents on the team sold it.  When you have a small army who knows the market and works in it every day, it helps all your clients.

If you’re looking to purchase, call us at 239-489-4042 or check out www.LeeCountyOnline.com  It has some of the area’s best buys, and it’s updated instantly.  If you’re thinking of selling, check out www.SWFLhomevalues.com, or call Sande or Brett Ellis 239-489-4042 Ext 4.

We’ll be happy to give you great advice we give all our clients.  The value isn’t in the agent showing you homes, it’s in the knowledge behind the research.  The Ellis Team has the knowledge and the research.

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The Future of Real Estate Southwest Florida Market Update August 2018

While many agents in SW Florida are complaining about lack of closings the numbers just do not bear this out.  Statistically average sale prices are about what they were in the boom of 2005 and early 2006, and 2018 single family real estate closings almost at boom levels as well.

Back in 2005 we had 12,273 single family closings.  In 2017 we had 12,356, and 2018 is on track to beat that.  The peak for closings was between 2009-2011 when prices were a lot lower.  Today we have peak level pricing and high levels of sales.

2018 Single Family Real Estate Closings Almost at Boom Levels

Looking at the single-family homes sold chart shows 2018 neck and neck with 2015 levels, which was a very good year.  We ran Year to Date numbers and discovered 2018 is just 16 closings shy of the 2015 pace.  When we look at real estate pricing along with months supply of inventory, we realize the 2018 real estate market is doing very well.

2018 Single Family Real Estate Closings Almost at Boom Levels YTD Closings

Back in July 2015 the months supply of homes was 3.8 months.  July 2018 it stands at 4.9 months.  Anything below 5.5 months is considered a seller’s market.  The median price in 2018 stood at $255,000 and the average stood at $350,566.  Back in July 2015 the median sold price was $209,830 and the average stood at $326,883.  In 3 short years that’s a 21.53% rise in median price and a 7.25% rise in average prices.

Real estate agents tend to report on how the market is doing in direct relation to how their business is doing.  This is not a good way to judge the market as shifts in market share can affect your production, and not necessarily the market.  The average agent does less than 1 deal per year.  The average full-time agent may do less than 7 deals per year.  If an agent’s production goes from 7 deals one year to 4 deals the next, it might feel like a drastic market change has occurred to that agent.  The reality is maybe their marketing isn’t working like it used to, or maybe they’re not working as hard or as efficiently as before.  Neither scenario is a good market indicator.

Our team consistently sells over 100 homes per year.  This year our goal is 225.  Because we’re big advertisers, our homes sell fast and for top dollar.  Large teams like the Ellis Team may siphon off more deals from single agents which cuts their production to less than last year’s levels.  In this case, it feels like the market isn’t as strong, and they honestly tell this to their clients because that’s their experience.

It pays to study the numbers.  Agents should study their numbers and compare them to the overall market.  In doing so they’re much more likely to spot actual trends in the market and rely less on feelings and estimates.

We’ve been studying the market for decades, so we know when the market is on the move.  Getting Top Dollar is a function of knowing exactly where the market is, and quite possibly where it’s heading.  The only way you can do this is to know exactly where it is and exactly where it’s been.  Experience and market conditions fill in the blanks from there.

Whether you’re buying or you’re selling, you need to know this information.  Make sure you’re working with an agent that studies the numbers.  If you’re considering selling, call Brett or Sande Ellis 239-489-4042 Ext 4.  If you’re in the market to purchase, our team can help you too.

For a free computer analysis of your home’s value, visit www.swflHomeValues.com  We have an app that has all the open houses every weekend.  If you’re interested, give us a call.

Always call the Ellis Team at Keller Williams Realty!  We’re here to help, when you need us and how you need us.

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