It is no surprise that real estate transaction dollar volume dropped in May.  May closings were a result of March and April pending sales which were impacted by covid-19 and stay at home orders in Florida.  Going forward, new pending sales have been strong, and top agents are having an exceptionally good year.

Real Estate Transaction Dollar Volume Drops in May

Dollar volume is the number of transactions multiplied by the average sales price.  That number dropped from $569.1 million last year to $326.0 million this year.  That is significant.

One of the things holding down sales is the limited inventory.  The other is travel has been limited during this period from other states.  That is not to say the motivated didn’t find a way to get here and purchase, but it did limit many.  Properties at the lower to mid end have been doing well.  Because of this, it has pulled the median price down .7% and the average price down 6.2%.  I would not say prices are falling though.  Right now, it is more of the mix of properties that are selling that is causing this.

We have seen this pattern before.  When real estate transaction dollar volume drops, it is not long after that agents start looking for the exit door.  These agents do not head directly for the door, they take a detour.  First, they are attracted to low cost brokerages with higher splits and fees based per transaction versus monthly.  It is an attempt to salvage their fledgling real estate career, and it does not work.  They were struggling before the crisis, and the real estate transaction dollar volume drop exacerbates it.

The detour is simply a speed bump to slow down the inevitable.  The exit door is approaching.  Sellers should be leery of listing with an agent who does not have listing transaction experience and has not had recent sales.  One question you might ask is, how long you have been with your current company?  Another would be how have your sales been in the last two months?

If you are considering selling, we have a list of questions you should ask the Realtor you are interviewing before you sign any agreement.  Another tell tale sign is when they agree to cut their commission.  This tells you two things.  Number one, they need a deal badly, and since profit isn’t a predominant factor, survival is, they may not be around by the end of the transaction.  Secondly, if they cannot negotiate their own transaction, how in the world can you trust them to negotiate on your behalf? Lastly, if they say they can do it for less, you must wonder if they’re spending money marketing your home, or just relying on the price and MLS to sell it.  If they don’t do anything for you, why pay them anything?

The whole point of using a Realtor is because they put more money in your pocket at closing than selling By Owner does, and that is a fact.  Realtors spend money, and each has their own value proposition.  If their value proposition is dropping, it means their value to you as a seller is dropping too.

Before you shortchange yourself and hire the least expensive agent you can find, call us, and explore the difference.  If netting more in your pocket at closing is more important than the low fee you pay, we need to talk.  Most people believe the less cost you pay the more money should flow to your pocket, and that makes sense.  The only problem is it is not necessarily true.

Brett and Sande will answer your questions and show you how we are able to get more money for our sellers.  In times like we are in today, experience matters.  Put the experience of Brett and Sande Ellis to work for you.  239-489-40402 Ext 4 or email us Brett@topagent.com or Sande@topagent.com

We’re excited to talk to you!  Good luck and Happy Selling!

See last week’s article “Hurricane Damage Roof Claim Settlement Deadline Approaches

Ellis Team Open House

Open House Sunday 1-4 PM

14120 Reflection Lakes Dr

New Listing in Reflection Lakes
Open House Sunday 1-4 PM

 

 

We thought you would like to know some changing real estate trends we are watching and how we are adapting.  This is only the 2nd time in my 30+ years in real estate I can remember changes so significant like we are seeing today.  The trends we are seeing today are different than normal economic cycle’s ebb and flows.

The last changing real estate trends we saw was back on 9-11, 2001 The United States was rocked by an enemy.  The country banded together, and Americans decided it was safer to nest at home versus travel abroad.  So, they did.  People hunkered down, traveled to within driving distance of their home and made home renovations, because home is where they were going to enjoy life and their family for a while.

Changing Real Estate Trends

Today, we are seeing similar tendencies.  Cruises, airline travel, and International travel are scary to many considering covid-19.  Workers learned to work from home, and companies learned it’s feasible.  Once companies learned this, they also learned they can save on high cost lease space in the city and setup shop in either the suburbs, or far away from where they originally thought they must be.

Two things happened.  Workers realized if they could work from home anywhere, why be in the city, and why be in high tax states?  Why not move to warmer climates that are tax friendly?  Not long after that, companies realized the same things.  If our workers are moving, why couldn’t we?  Companies have been reluctant to move for fear of displacing so many workers and not having talent in the location they might move to.  Now that workers are willing to move, combined with fact they can still work and not have to live where they work opened the doors for companies to explore options.

Then another thing happened; the unfortunate death of George Floyd, the protests that ensued, and more specifically, the riots and mayhem.  Combine this with talk of disbanding police departments and it sent some companies over the edge.  Companies like steady, predictability. Chaos and mayhem are not business friendly.  The thought of closing stores, losing inventory, and putting employees in harms way was too much to stomach, and many businesses are leaving.  It’s not good business practice to operate in unstable environments.

This is also a reason why some companies are relocating from China back to the US; predictability and stability.  So, who benefits and who loses in such a scenario?

Florida is Attractive to Buyers

States like Florida are big winners.  Florida has done well with covid-19.  Riots have been well contained in Florida and leadership at the state and local levels have been strong.  Sure, some will always disagree with this stance or that, but leadership itself has been strong.

Consumers are looking to migrate out of cities and move to suburbs, smaller towns as well as rural. RV sales have picked up tremendously.  RV dealers are practically sold out in some cases.  I checked with an RV dealer locally who confirmed sales are off the charts and they are having a hard time keeping inventory.  Sound familiar?

Gun sales have increased.  People are worried they may rely less on the government for protection.  The events of 2020 may shape real estate decisions in a way we have not seen since 2001, and this time it appears to be more dramatic.

People crave predictability and stability.  Companies do too.  When they do not have that, they take control to the extent they can, and that’s their family’s personal safety and housing.

Changing Real Estate Trends We are Watching

Shifts in Advertising

We have shifted our advertising.  We still advertise locally, and we are bumping up our advertising into areas where we know people are migrating out.  It is working.  We have buyers coming in from all over.  Our artificial intelligence can identify where buyers and referrals are coming from for any city.  For example, here is the map for incoming referrals to Tampa.  Each city has its own patterns.  Hire us and we’ll put the SW Florida data to work for you.

The Ellis Team is forging relationships with top agents in each of these cities, as well as taking out targeted ads directly to buyers in those cities.  They are coming here and buying.  Our team sold 3 homes last weekend to leads we have been working using targeted ads.

If you are thinking of making a move, call Sande or Brett Ellis 239-489-4042 Ext 4, or visit www.SWFLhomevalues.com to see what your home is worth, or www.LeeCountyOnline.com to find your next home.

See last week’s article “Agent You Choose Matters When Listing Your Home

Agent You Choose Matters When Listing Your Home

Ellis Team Open House

Closed and pending sales outpace new listings in the SW Florida real estate market once again.  Looking at the latest 7-day Lee County numbers shows 192 new single-family home listings and 349 new pending sales.  There were 222 closed sales.  The closed sales number will only increase because numbers were taken Wednesday April 29th at the time, we are writing this article.  It takes a few days to report out closed sales end of month. As pending sales outpace new listings we’ll have to track and see if there is eventual upward price pressure.

Pending Sales Outpace New Listings

Pending Sales Outpace New Listings

The Lee County Florida real estate market has been busy this past month as new pending sales outpace new listings. Closed sales did as well. The Ellis Team has been busy too this past month.  We hold daily sales huddles and yesterday we counted 10+ pending deals for month of April and we did not have all our agents on call.  That is not bad for s state that is been on stay at home orders.  Keep in mind, real estate is considered an essential business, so we’ve been able to conduct virtual showings and virtual open houses, but the public hasn’t been out shopping models and showings like they used to.  Most all of this has been done virtually with minimal in-person showings.

Our team takes the real estate business seriously.  It’s a full-time profession for us, which means we don’t have other jobs paying our bills.  Because we take it so seriously for our clients, we’ve learned to innovate and adapt to changing conditions.

We know many buyers still want or need to buy.  Many sellers want or need to sell, so it’s up to us to find a way to make that happen for them and find a way we did.

Other agents are switching companies, and some companies are even contemplating closing their doors.  We are fortunate to belong to a national company with no debt and full of ideas.  We share best practices and ways to get the job done for our customers.

New Virtual Programs

If you read this article or subscribe to our blog you know about the programs we’ve introduced the past month.  Programs like www.virtual-listing-appointment.com, or www.virtual-open-houses.com, or www.virtual-showings.com None of these programs existed 30 days ago and they are so critical to what we’re doing today.

It is not the website themselves that makes this a success.  It’s the concept.  For instance, sometimes another Realtor has a buyer and they ask a question about one of our listings.  We have options to show them the home or answer their questions.  We can visit the property and do a live or recorded video.  Our team can schedule a 3D showing online with the customer and their agent, so they can ask any question.  As the listing agent we can answer those questions and even point out a few things the other agent might not have shared.  Nobody has to be at the property because we utilize cutting-edge technology upfront to be able to show the property over and over again with the 3D tour.

The bottom line is successful agents will thrive and adapt no matter what the market throws at them.  I have sold real estate through several recessions, double digit interest rates, and a housing and financial collapse.  Those experiences taught us how important it is to adapt quickly.  What seems like an obstacle to many agents is a simple pivot for us.

The Future of Real Estate

Going forward we can see this may become the future of real estate.  We believe there will be a new normal.  Many agents you see today won’t be here 6 months from now, and next year there will be a new crop of agents eager and ready, but they won’t have the experience of what it takes to survive and thrive in a shift.

The shift can be economic, health, or just mindset.  Let’s face it, few in America look at things the same today as we did 60 days ago.  The world has changed, and so must we, regardless of which industry we are in.

If you have a property to sell, visit www.SWFLhomevalues.com, or call Brett or Sande Ellis at 239-489-4042 Ext 4 and we’ll be happy to talk to you about your options.  Yes, we’d love to show you how we’re selling properties with advanced marketing we can put to work for you, and we can do this virtually with you as well.  We look forward to hearing from you.

See last week’s article “Southwest Florida Real Estate Market Update April 2020

Ellis Team Weekend Open Houses

Getting a Mortgage Today

New Listing of the Week

5314 Chippendale Cir E  Whiskey Creek

It is time for another Southwest Florida real estate market update. It seems everyone I talk to asks how the real estate market is doing during this Coronavirus shutdown. During the last 7 days in Lee County 212 homes came on the market and 301 went pending. 289 closed in the last week.  This tells us that we’re pending and closing more homes than are actually coming on the market.

This also tells us that now is a great time to sell. You have less competition from other sellers, and homes are actually selling. This past week our team held 9 virtual open houses. All open houses received over 200 video views and our best one had 3,300+ people tuning in. You might ask how do we get so many people to view our open houses online. We will answer that later in the story.

As you can see from the graphs, inventory levels were falling pre-Coronavirus. In other words, this is not a new trend. More homes have been selling than what is coming to the market. This was indicative of a strong housing market locally and a strong economy. Given the shutdown, we have no idea what shape the economy is in today. What we do know is the housing market has remained strong.

Southwest Florida Real Estate Market Closed Sales by Year

We have official sales numbers through March, and you can see that 2020 was on pace to eclipse the previous 4 years. Some people feared we would lose closings in March as buyers became fearful of the unknown. That scenario did not play out. The question going forward will be how does the disruption affect the market going forward?

Nobody knows for sure the answer to that. Hopefully answers about when states will open back up and to what degree will become clearer soon.  What we do know is that it is a good time for sellers right now! It’ always more fun to sell when there is less competition from other sellers.

Buyers still need to buy, and when you see low inventory and buyers buying sight unseen, you know it’s a good time to sell.  What will happen when this virus thing is over and all those sellers who did not want to put their home on the market during the pandemic decide to sell?  Sellers will have more competition. It does not mean the market will be bad, it just means it may take longer to sell as they’ll have more competition.

Pricing is still a critical component. The market either accepts or rejects the price, and some sellers will never get that point regardless of if the market is up, down, or sideways. Proper pricing is important.

Back to the question about how we drive so many people to our online open houses. It’s all about the marketing. The Ellis Team are Southwest Florida real estate experts at driving traffic, whether it be old-school like print marketing or cutting edge like targeting buyers. Our brand is wide and our reach is deep because we have a large digital footprint to draw from.

If you are considering putting your home on the market today, you want it sold for top dollar and fast.  You want to limit the in-person showings. The faster we get your home sold for market value, the better it is for everyone. The Ellis Team digital reach can help you achieve that.

If you’d like to get a quick feel for the value of your home, visit www.SWFLhomevalues.com  It you’d like to setup a meeting with Brett or Sande to talk about the market, your home, or your options, we can jump on a video call and talk about it. Simply visit www.Virtual-Listing-Appointment.com and fill out the form, or call 239-489-4042 Ext 4 and ask for Brett or Sande.

If you are thinking of selling, let’s talk about your opportunity today versus waiting and figure out what’s best for you.

Good luck and Happy Selling!

See last week’s article “Virtual Open Houses Sells Homes in a Virtual World

Check out this weekend’s Virtual Open Houses

Today we’d like to show you how virtual open houses sell homes in a virtual world.  People may not realize that real estate is still selling.  In fact, I just checked MLS and in the last 7 days 224 homes went pending and 247 homes closed.  In fact, more homes went pending than actually came on the market in the last week, and Florida is under a stay at home order.

Virtual Open Houses Sell Homes in a Virtual World

How is it that so many homes are selling?  Top agents are adapting to market conditions.  We know some buyers still need to purchase and some sellers still need to sell.  The market didn’t go away, even though access and the way we show homes did.

This weekend the Ellis Team is hosting an online virtual Open House Extravaganza.  We’ll have 7 virtual open houses this weekend. The neat thing is we can do this during the week too.  Our Virtual Open Houses website www.Virtual-Open-Houses.com has links to times and locations of each open house.  Each open house will be its own event and also streamed live.  The beauty of this is customers can tune into the live stream, and the virtual open house can live on long after as a posted video.  If you miss one of our open houses you can go back and watch a previous open house. Virtual open houses sell homes and the Ellis Team wants to be at the forefront of that process.

Who knows what you’re going to see?  Because this is live and reality based, you might see some unexpected things.  We’re not saying this will become as popular as the Tiger King, we’re just saying you never know.  These live events will be streamed on our Facebook page www.facebook.com/Ellisteam as a live event.  Check it out or check out our virtual open house page mentioned earlier for a complete and changing schedule.

We’ve been getting hundreds of people attending live open houses.  Not only do we get the live views, there are many more views later through shares.  Who knows, this may set a new trend in how open houses are conducted.

Consumers also love it when we do a virtual open house from a gated community.  They no longer must worry about getting through a gate.  Consumers can see if the home and property interests them before deciding to give up time to go visit a gated community.

Our agents are getting better and better.  Each home is unique, and the internet or cell phone access can vary greatly by location.  They are stepping out of their comfort zone to bring you properties you can see.  In addition to our listings we can bring you new developments and new construction homes as well, so stay tuned for all kinds of opportunities.

Perhaps you’ll find a listing you love.  Perhaps you won’t.  Our agents also show homes virtually through our www.Virtual-Showings.com program.  The virtual showings program differs in that we have a virtual meeting with you and listen to what you’re looking for.  We then select properties that match your criteria and show those homes to you versus a live stream virtual open house.  The virtual showing is sort of like your custom virtual open house only we can do that live or through a 3D tour anytime day or night.

If all this is confusing to you, we’re still available to talk to.  If you’d like to sell your home, you should call Brett or Sande Ellis 239-489-4042 Ext 4 and we can show you all the tools we’re using to sell homes today.  Remember, 247 sellers closed this past week.  It might as well be you.

If you’d like a Free online instant estimate of your home’s value, check out www.SWFLhomevalues.com  It’s quick, free, and pretty darn accurate in most cases.

Our team is here to help.  Hopefully we’re providing the tools you need wherever you are, in whatever situation you’re in.  If you need to talk, we’re a quick phone call away.

Take care and stay safe.  This will all be over soon.  Maybe not soon enough, but hopefully soon.

See Last Week’s Article “Guided Virtual Showings Program Helps Buyers Tour Homes Safely

Be sure to check out our video on virtual showings too

Sellers can take advantage of our Virtual Listing Appointment

Last week we focused on keeping sellers safe using the virtual listing appointment program.  Today we’d like to talk about buyer’s safety. Guided virtual showings program helps buyers tour homes safely and efficiently.

Let’s face it, no matter what is going on in the world many sellers need to sell, and many buyers need to purchase.  Did you know that in the last 7 days 254 new homes came on the market, 240 homes went pending and 354 homes closed in Lee County?

So how can we show homes safely and efficiently in today’s environment?  The Ellis Team guided virtual showings program helps buyers tour homes safely.  The guided virtual showings program consists of several steps.

Virtual Consultation.  Our agents listen to what you’re looking for.  We ask detailed questions about the type of home you’re looking for.  Based on your answers we get to work finding the best properties that match your criteria.  An Ellis Team agent sorts through all the clutter to get you to the best homes at the best value.

Guided Virtual Showings Program

6 Easy Steps

We set you up on a favorite list whereby we email you new or modified listings each day that match your criteria. We want you to know about hot new listings first.  Speed wins and the best homes go fast.

We setup virtual showings online. Together we go through each of the best homes.  You tell us what you like and what doesn’t work for you.  Many times, we’ll have found the home on the first attempt, if we’ve done a good job of listening.  Sometimes we tweak the search a little bit, and sometimes we must go back to drawing board.  The neat thing is, because this is all being done virtually, the process can happen quickly.

Electronic Signatures– All of the purchase agreement can be created and signed electronically. The advantage to buyer is it can be done quickly which means your offer may get accepted before another higher offer comes in from another buyer.  Speed wins the day.

Home Inspections– Many home inspectors will inspect the home and send you a report along with photos and proof of items needing repair. Home inspector can even setup a virtual meeting to discuss items.  This limits people needed at the home inspection and keeps you safer with social distancing.  Sellers appreciate it too because there are less people invading their home potentially getting them sick.

Closings– Much if not all of the closing can be done remotely or by Fed Ex. You do not need to attend closing.  In the days of social distancing, why be present for something you don’t need to be?  You can focus your time on more productive things.  We’ll arrange to meet you with the keys to your shiny new home.

We Listen-Then Suggest

The key to the whole system is listening to what you’re trying to accomplish, educating you on the market, and helping you find and negotiate to a successful transaction.  We have lenders that offer low rates and zero lender fees.  Our team has access to so many resources.  We can discuss your needs and ways we can save you money and make the process easier for you when we meet.

To get started, simply go to www.Virtual-Showings.com or you can request a virtual consultation and virtual showings from any of our websites like www.LeeCountyOnline.com

If you’re a seller, you’ll be interested in www.Virtual-listing-Appointment.com Sande and Brett will use the same tools to get your home sold fast, and safely.

As always, we can always talk on the phone the old-fashioned way too.  You can reach Brett or Sande at 239-489-4042 Ext 4

See last week’s article “Virtual Listing Appointment Program to Safely List Your Home

The Ellis Team is introducing our virtual listing appointment program to safely list and sell your home. People still need to buy and sell property, but in today’s social distancing environment meeting people isn’t always a good idea.

For years we’ve used various technologies to bring a consumer experience to the buyer.  We’ve adapted to bring this same experience to the seller, with a few new twists.  Our website can be found at www.Virtual-Listing-Appointment.com

Virtual Listing Appointment Program to Safely List Your Home

How the Virtual Listing Appointment Program Works

The first step is a virtual listing consultation with Brett or Sande.  We’ll discuss your situation, what you’re trying to accomplish, where you’re going, and what your ideal timeframe is.  We can do all of this with an online video conference we’ll setup for you.

Next, we can do a virtual walkthrough with you.  On your phone you can show us the house using our video conferencing application.  If you don’t have internet at the home, we can do this through photos and other methods.  Brett and Sande can discuss comparables and market conditions with you on the video conference just as if we were meeting in your home or at our office.

Once you feel comfortable and make the decision to place your home on the market, all listing documents can be signed electronically by e-signature.  We have the software to do that as well.

3D Virtual Tour

3D Virtual Tours

The Ellis Team then springs into action.  We hire a professional photographer to photograph your home and do a 3D virtual tour of your home.  This allows us to setup online showings via our websites and 3D tour solutions for buyers.  Our team has sold several homes over the years sight unseen online.  We can do the same for your home.

Some buyers will purchase via virtual tools, and some will not.  At the very least, we can eliminate a lot of shoppers.  Most all buyers love the technology and can narrow down their choices online.  In this way we’re helping sell our listings and reducing the foot traffic in the home.  It doesn’t do a lot of good having 100 showings to find one buyer.  Now we create the online showings and still find the buyer.  If we can cut the actual showings down significantly and still sell the home, we’ve made the selling process safer for buyers and sellers in the process.

Virtual Open Houses

Our team holds virtual open houses.  This is another way we can cut down on people entering your home and potentially spreading the Coronavirus, the flu, or any other germs.

Ellis Team buyer agents can also do virtual showings with buyers.  Let’s say the virtual tour or online photos don’t address all the buyer’s questions.  Instead of setting up showings and bringing buyers through your home, our agents can go to your home a do a video walk-through guided by the buyer.  The buyer sees exactly what they want to see and gets all their questions asked, and the seller doesn’t have a large group of people going through their home.

Sellers also appreciate that with less showings, the home doesn’t have to be stage ready at a minute’s notice every day.  By having the home show ready on day of photos, it takes a lot of pressure off keeping home show-ready every single day.

Once we list a home, we can continue to host virtual meetings with our sellers.  We can provide listing updates, walk through the MLS together, and present sales contracts.  Our technology brings us closer together than ever before.

The Future of Real Estate

And who knows, this may become the Future of Real Estate.  A crisis like this forces us to adapt, and by thinking out of the box we may have created a better way to communicate with our sellers on a consistent basis.  Now we can have scheduled virtual meetings anytime, just as if we’re sitting together in your living room.  Put the virtual listing appointment program to work for you.

If you’re thinking about selling, Always Call Brett or Sande Ellis 239-489-4042 Ext 4 or visit www.Virtual-Listing-Appointment.com

See last week’s article “Coronavirus Changing Real Estate Transactions

The world as we know it has changed, at least for a few months.  Today we’d like to talk about how the Coronavirus changing real estate transactions affects consumers and what needs to happen going forward.

Let’s face it, people are scared about their health, job, economy, etc.  This virus is scary and causes us to feel a loss of control.  We as humans like to control our destiny and protect our family.  We also know some buyers need to buy, and some sellers need to sell.

What can be done to alleviate fears, calm anxiety, and still allow for real estate transactions to occur.  We’ve come up with some strategies to help our customers who want or need to make a move while all this virus stuff is going on.

One of the things we do is create 3D tours of our listings so buyers can walk through a home virtually.  We also use professional photos to make the home look as real as possible to a potential buyer online.

The second thing we’re doing is creating virtual showings.  Let’s say we have a buyer out of town, or local but trying to eliminate the number of homes they enter.  Our agents can setup a virtual showing whereby we show the home on video and walk-thru.  Buyers can ask questions and have us go back and show them certain things on video in real-time.  We’ve had several buyers purchase homes using this technique without ever having to visit the home in person.  We can video the back yard, neighborhood, amenities, etc.  Anything the buyer wants to see in person we can do online.  We also have some video walk-throughs  like this one at 19694 Villa Rosa Loop in Estero.

We offer online mortgages too with zero-lender fees.  This speeds up the lending process and requires no human interaction in person.  Our team uses electronic documents as well, so customers can sign purchase or listing agreements, required disclosures, and all necessary paperwork electronically.

We now have a mobile app that let’s customers view properties anywhere in the country.  Simply go to www.mobilesearchapp.com and search away.  Be sure to select Brett Ellis as your agent.  The app shows you how much you’ll save with the zero-lender fee option, as well allow you to search at the neighborhood level, not just the city and zip code level.  Just type in a neighborhood and you’re good to go.  It will also show you nearby open houses.

Coronavirus Changing Real Estate Transactions

Video conferencing is a nice option to meet with your agent and discuss your needs.  We can share our screen so you can see items on a contract or MLS printout, or simply talk face to face without any risk of transmitting or receiving Coronavirus.

The bottom line is just because the world is going through a health scare doesn’t mean you have to give up on your real estate needs.  If you have a lease expiring, your landlord may not care that you don’t have a place to go.  We’ve got to find alternative ways to accomplish our goals.  The restaurant industry is adapting by offering drive thru, takeout, and delivery service.  The real estate industry must adapt as well.  In fact, this could become a model going forward.

We posted a video on our YouTube channel www.youtube.com/brettellisfl about how we’re changing to meet the needs of our customers.  The current situation demands it.

We also created a Real Estate Coronavirus Mastermind Task Force for top agents to meet and discuss ways to help buyers and sellers conduct transactions in this challenging time.  Buyers and sellers have needs, and we want to deliver results in a safe way for our clients and our families as well.  Together we’ll weather the storm, and who knows, we might even create a model to more efficiently and safely sell homes in the future. As we study the effects of Coronavirus changing real estate transactions, we’ll constanly provide solutions to meet those challenges.

If you’d like to talk to Brett or Sande, give us a call at 239-489-4042 Ext 4.  We can setup a video conference with you as well.

Good luck, stay safe, and Happy Home Buying and Selling if you’re in the market.  We’re here to help if you need an agent with experience working through challenges like this.

See last week’s article “Real Estate Inventory Supply Tightens in SW Florida Since December

People are talking and wondering what effect the Coronavirus will have if it comes to the US.  We should prepare for and expect that it will as it is spreading across the globe, and we are not immune no matter how hard we try.  Today we’d like to focus on a potential Coronavirus impact on real estate.

Let’s talk about what we know first.  From a health standpoint, the death rate appears to be about 2%.  Most people experience cold and flu like symptoms which might persist a bit longer than a cold.  The flu death rate was about .1%.  In 2018 61,200 people died from the flu, while about 42.9 million people were infected.

While Coronavirus appears to be very serious, it’s not something to freak out about.  We can try to slow it down, but if it reaches pandemic status it will come. The young and the old are most at risk, like many illnesses.

What Will be CoronaVirus Impact on Real Estate Nationwide?

If it comes, what will be Coronavirus impact on real estate?  Several things could happen.  First, the economy will slow down.  The virus is already affecting business worldwide.  We are seeing oil prices drop, in addition to interest rates.  A slowing economy lowers the demand for oil.

Coronavirus Impact on Real Estate

Home buyers can take advantage of lower rates.  Yesterday at our meeting a lender was quoting under 3.5% conventional and under 3% for government backed loans.  It’s a good day to be a buyer right now, and if you’re in the market, you should act now.

Rates are 1% lower than they were this time last year.  This adds 11% purchasing power to a buyer.  In January the median home price was up 2.1% over last year while the average was up 13.8% At the median level, buyers just gained about 8-9% purchasing power on interest rates alone, which adds fuel to the market.

The Coronavirus could impact travel plans for international visitors and Americans alike.  Tourism could drop and vacation rentals could be hit from foreigners.  However, we could see a boom from Americans who may become afraid to travel abroad and decide to stay in the US.  We could see people decide not to take cruises and vacation in Florida instead.

Florida May Fare Better Than Others

While airline and cruise stocks may be hit hard, the impact on Florida may not be as severe as people can drive here.  Luxury markets could be hit as we may have less foreign buyers here this year due to the virus.  California comes to mind as Chinese buyers are not traveling and spending money here right now.  Right now the virus is spreading across Europe, so expect to see more US luxury markets affected going forward.

Amazon has admitted it expect lower sales on its big sales day coming up.  A lot of product will not come from China, so global sales will suffer.  Short-term we could see an economic pull-back.  Some people could lose their job over the virus.  The only silver lining to all this was it’s happening at a time our economy was doing well, so at least it didn’t happen in a downturn.

While the economy could suffer a bit if we have a full-blown outbreak, there will be opportunity due to lower rates.  From a human standpoint we hope they contain this thing and get it under control soon.  The cat might already be out of the bag.  If it is, we’ll deal with it as best we can.  It may become a big inconvenience.  Meetings may get cancelled.  Schools and major events might have some choices to make.

Buyers and sellers have choices too.  Our suggestion would be, if a move is something you’re considering, do it now.  Rates are in your favor.

Best Way to Search For Properties On The Go

If you’d like the best search option available, check out www.mobilesearchapp.com It’s simply the best mobile search app on the planet.  It allows you to search at the neighborhood level anywhere in the US.  This is a great way to beat the crowds and see what’s available.

If you have questions feel free to call us 239-489-4042 Ext 4 Ask for Sande or Brett

Good luck, and wash those hands every chance you get!

See last week’s article “Interest Rates and Housing Inventory Levels Shape Direction of Market

Check Out Lee County’s Best Real Estate Values

Ellis Team Weekend Open Houses

For the past two years we’ve been talking about lower interest rates fuel home sales and their impact on pricing.  Today we have some data to illustrate how lower interest rates fuel increased pending sales.  And we all know pending sales lead to closings.

Last year the Fed made a mistake and began raising interest rates, which led to higher 30-year mortgage rates as well.  These two are not always tied together, but in this case that was the effect.  As you can see from the interest rate chart, rates began rising in 2018, especially in the latter half when the Fed did what they did.

Lower Interest Rates Fuel Increased Pending Sales

As rates shot up to 5% at the end of 2018, home sales lagged.  Beginning in November 2018 new pending sales fell off about 20% and continued its slide until April of 2019.  March 28th is when we saw our first real dip in rates, which led the turnaround in new pending sales immediately.  Beginning in April new pending sales turned around, and they’ve continued since.  In fact, this September we saw the largest increase of 19.6% This is a function of lower rates now combined with rates that were rising at that time last year.

Lower Interest Rates Fuel Increased Sales

Last September new pending sales were falling and this year they’re rising.  These two charts illustrate perfectly well the effect lower interest rates can have on home buyer’s motivation.  Lower rates open more opportunities for buyers as well, as they can afford more home for the same payment.

Lower Interest Rates Fuel Increased New Pending Home Sales

The interesting thing will be what happens moving forward.  Interest rates are moving up while the Fed is lowering rates now.  The Fed is in pause mode now to see how monetary policy shakes out both here in the US and globally.  Like I said earlier, these two rates are not always tied together.

When word gets out that rates are going back up, it will have one of two effects.  It may spur some buyers who were on the fence to act, which could increase new pending sales.  It could also have a chilling effect, because as rates go up, sales can go down.  Fewer buyers qualify at various price points, so it essentially takes some buyers out of the market.

We can’t say moving forward where mortgage rates will be next year.  There are plenty of variables, not the least of which are trade deals.  Secondly, the sad reality is the world is broke.  Nobody really has any money, it’s all borrowed.  We see countries in Europe with negative interest rates because their economy is in trouble.  The United States is still the strongest economy on the planet, so we don’t have the need to go negative like these other broke countries.  However, we owe a lot too, so we must be careful with spending programs to avoid the fate of some of these countries.

The good news is our economy is booming and could be better once these trade deals are worked out.  Ironically, certainty in the market may spill over and help these other countries too, if they pay attention and rein in spending.

So how does all this affect real estate here in Southwest Florida?  Lee County prices have been very stable the last few years.  We haven’t seen big price run-ups.  We should be in good shape no matter what happens globally.  While the Fed made a mistake last year, they’ve been doing a reasonably good job reading the financial tea leaves and keeping the US steady.

30-year rates today are at 3.78% on average.  That’s really good, and if we keep rates below 4% we should continue to see excellent sales numbers moving forward.  It’s when rates hit 5% last year that we saw slowdown.

We’ve helped buyers save big on closings costs through a lender we work with.  If you’re thinking of buying, you should call the Ellis Team at Keller Williams Realty.  239-489-4042 and speak with one of our buyer agents.  If you’re thinking of selling ask for Sande or Brett at Ext 4, or visit www.SWFLhomevalues.com

Good luck and Happy Home Buying!

We have 7 open houses this weekend.  Call our office for complete schedule 239-489-4042