Since October 2017 listing inventory in SW Florida has risen over 25%, while at same time closed sales have fallen slightly.  This has caused the months supply of inventory to rise to 5.48 months, up from 4.31 months last October.

It’s important to know this information as it’s an indicator of the health of the market and which way prices are headed.  It also tells us if we’ve gotten a little ahead of ourselves in either direction.

Southwest Florida Listing Inventory Rises 25.44% Since October

Much like the stock market, the real estate market also fluctuates.  The market is always testing limits and boundaries, and when it finds them it reacts.  This is true in boom markets, bust markets, and normal variations in between.

When inventory levels got too low back in 2009 we knew the market was headed for a steady rebound, and we sure got one.  It didn’t happen overnight and not all prices ranges reacted simultaneously.  Nonetheless, it happened.  2005 and 2009 were extreme examples.

More realistic are the normal market gyrations most people don’t even see unless they study the numbers.  If you’re a seller and you notice lots of homes in your neighborhood are on the market, and none are selling, you know what this is like.  It’s possible the neighborhood just got ahead of itself compared to other neighborhoods.  A simple market adjustment can usually fix this unless there is a bigger underlying issue.

While not all price ranges react the same, we can tell you all price ranges in SW Florida gained monthly supply.  Not one price range fell, so this was across the board.  We can say the hardest hit ranges begin at $400,000 & up.  The $400-600k range shot up from 6.99 months in October to 9.20 months now.  The $600-1 Million rose from 10.29 months to 14.49 months now.  The $1 Million+ market rose from 14.62 months last October to 19.59 months now.

These are important numbers to know.  Sellers in particular price ranges need to know how their range is doing.  In a rising market you can price just ahead of the market, and if you’re wrong, the market will catch you.  However, pricing too high doesn’t work in a rising inventory market.  The market won’t catch you.  If anything the market is leveling out or could be in for a slight reduction.

Nobody is calling for a market correction here.  The fundamentals are just too strong, and nothing like what we saw back in 2005.  We have end users and renters hoping to buy.  Rising inventory levels can be a sign that sellers have out-priced buyer’s ability to pay for the increases.  Home prices have risen, but wages may not have kept pace.

Rising interest rates can dampen a buyer’s ability to purchase as well.  We stated many times how a 1% rise in rates takes away 11% purchasing power from a buyer.  Do that to enough buyers and you can affect a market.  We’ve seen rising rates, and we expect them to rise more.

Bottom line, if you’re a buyer, get in soon.  Rising rates rob you. They’re like a thief in the night.  If you’re a seller, price your home correctly, and hire the best agent you can find to market it.  You have more competition now.  Exactly 25.44% more to be precise.   The market has stabilized.  A neutral market is defined as 5.5 months supply.  Anything more is a buyer’s market; anything less is a seller’s market.  At 5.48 months supply, we’re about as balanced as you can get, which means prices aren’t going to move up until we work down supply.

To sell your home, call Sande or Brett Ellis 239-489-4042 Ext 4.  To research the market, find your home’s value, or get neighborhood updates, go to www.LeeCountyOnline.com If you’re looking to buy, one of our happy agents will be glad to assist you. 239-489-4042

Good luck and happy selling!

This past week we’ve seen some wild fluctuations in the stock market, so we thought we’d answer some questions people have.  One question we’ve heard recently is does stock market volatility affect real estate values?

Stock Market Volatility Affect Real Estate Values Stock market volatility
Stock Futures Suggest Volatile Open

The simple answer is, not really.  There is a general correlation between stock market values and real estate values.  As the economy does better, both markets tend to do better.  However, we’ve seen instances where people pull money out of the stock market and place it into the real estate market.

Interest rates tend to affect sentiment in both markets.  Rising inflation leads to rising interest rates, which both markets dislike.  Investors will sometimes pull money out of stock market and into bonds for the yields.  Therefore, the stock market doesn’t like rising rates.  Rising rates also hurts borrowers as it zaps purchasing power from buyers in the real estate market.

Stock Market Volatility Affect Real Estate Values Housing vs stock market

However, we’ve seen inverted yield curves whereby sort term rates are higher than long term rates.  This breaks most of the rules as usually long-term rates carry more risk, so investors want more yield in a longer security.  Therefore, we have to look at the reasons for interest rate and stock market volatility before drawing conclusions as to its effect on consumer sentiment and real estate prices.

On Friday February 2 jobs data came out and showed wages climbed 2.9% from the previous year which was the best gain since 2009.  This spurred inflation fears and concern that the fed would hike rates unexpectedly, which naturally draws volatility from the stock market.

The bottom line is not much has changed in the economy in the last week or so.  The only thing that has changed is stock volatility, and the realization that rates will go higher.  We’ve been talking about it for a few years, and reality is finally here.  Everybody knew this day was coming.

The tax reform has spurred wage growth.  We expect to see a tight labor market.  Some jobs are moving back to the US, while some jobs will be lost as business reorganizes.  Retail stores and banks may continue to come under pressure as online wins the day.

I wouldn’t put much attention into the stock market other than seeing how it affects your retirement savings.  The smart money is watching interest rates.  Rising rates don’t necessarily kill the stock or real estate market, but it can stifle or limit its growth.

Wage growth will dictate how far real estate prices will rise.  The stock market doesn’t go one direction forever, and neither does the real estate market.  Wages must eventually rise if you want continued rise in prices.  Rising rates stymie price growth, and rising wages can offset some of that. Unfortunately, rising wages is correlated to rising rates as they can be inflationary.

The stock market did well 2008-2016 due to free money.  It did even better in 2017 due to rising expectations in the economy.  Free money is over, and it must be.  We’re heading into a period of normal market conditions controlling the markets.  This is healthy and a good thing.

We’ll be watching inflation, interest rates, oil, and the overall economy.  We’ve got a balanced real estate market here in SW Florida. Buyers are scooping up properties now to beat those rising rates, however they’re not over-paying either.

Buyers want to buy, but not overpay.  They’re being careful and doing their homework.  Inventory is rising, but still low.  Research and market knowledge wins the day whether you’re a buyer or seller.

One of the best websites to keep up with the market is www.LeeCountyOnline.com  The database is updated every few minutes.  It not only has all the listings, it also has sold data in our market reports section.

Always call the Ellis Team at Keller Williams Realty for professional real estate advice 239-489-4042.  If you’ve got a house to sell, ask for Sande or Brett.  Our team stands by ready to help you buy or sell, and educate you on the market.

Ellis Team Weekend Open Houses

Open Saturday 1-3 PM

Danforth Lakes

9103 Falcon Pointe Loop

4 Bed 3 Bath  $330,000

9013 Falcon Pointe Loop

Open House Saturday 1-4 PM

Parker Lakes

14811 Crystal Cove Ct Unit 1102

2 Bed 2 Bath lakefront  $225,000

Parker Lakes Condo

Open House Saturday 1-4 PM

Island Park Village

17813 Port Boca Cir

2 Bed 2 Bath Lakefront  $215,000

Island Park Village Condo

Open House Sunday 1-4 PM

Olde Hickory

9071 Old Hickory Cir

3 Bed 3 Bath Golf Course View  $360,000

Olde Hickory Golf Course Home

December 2017 closed sales increased 1.9% over 2016 in the Southwest Florida real estate market.  However, the median sales price was down 4.6% while the average sale price was down 16.3%  The slight increase in number of closings wasn’t enough to pull the total dollar volume with it, so we saw a decrease of $55 million in total volume. December Southwest Florida Dollar Volume Drops.

December Southwest Florida Dollar Volume Drops Summary Statistics

Is this concerning?  Not really.  We know that many properties were affected by the hurricane.  It stalled some sales, and it’s forced some sellers to wait due to increased time repairing pool cages, screens, roofs, etc.  I talked with a roofer this past weekend who said it will be 9 months before the roofing market returns to normal.  His advice, if you don’t need a new roof today, wait.

Prices for roofs, pool cages, screens, etc is artificially too high due to demand.  Prices will come down as the workload lessens in the future.  I talked to a builder who has delayed homes because they can’t get pools done on time or within budget.  These high costs will pass, but it will take time.

7 Day Market Watch 1-30-18 December Southwest Florida Dollar Volume Drops

We feel that the housing stats are more a reflection of disruption than anything.  We pulled the 7 day Market Watch report from MLS and what a difference a few weeks make.  We’re back to normal.  Pending sales have almost equaled new listings.  This tells us that buyers have turned on.  They are out there buying right now.

We also had more price decreases than new listings.  This tells us that sellers are getting more realistic and are reducing prices to match where the buyers are.  The price reductions are working.

Each year sellers bring properties to market in hopes of testing new highs.  Prices have risen so much that buyers are indifferent to overpriced listings.  Homes today must be priced correctly, or buyers will pass.  In a rapidly upward sellers’ market, buyers are forced to act quickly.  We weren’t seeing that a few weeks ago.  We are starting to see that now, however buyers are still price conscious.

Sellers are getting restless.  The calls into our office from sellers with other listing agents has increased dramatically.  They are unhappy with their agent for one reason or another.  We cannot list their property until their listing ends, so they’re stuck with their situation unless they work something out with their broker.

Our advice would be this.  All agents are not the same.  It pays to interview top agents and compare them.  Compare marketing plans, pricing, communication expectations, track record, references, etc.  I know it takes a little more time on the front end, however it will save you a lot of unhappy time waiting for a listing to end on the back end.

Interest rates are rising right now.  Waiting in this market is not good.  Buyers are here now and they’re buying.  You want to be priced correctly and marketed correctly.  It’s the only way to get Top Dollar for your home.  You don’t want to be the last seller standing once season ends.  That means you lost the home selling game and you’ll be looking at fewer buyers with higher rates in the future.  The time to get this correct is right now.

If you’re thinking of selling, always call Brett or Sande Ellis at the Ellis Team at Keller Williams Realty.  Our marketing is second to none, and we’ll help you get your price correct too.  Call us at 239-489-4042 Ext 4 so we can get your home sold now and for Top Dollar.

To search the MLS like a pro, go to www.LeeCountyOnline.com  you’ll find the all the listings updated instantly.  You can even get an idea on what your home is worth for Free!

Good luck and happy home buying!

Ellis Team Weekend Open Houses

Open House Saturday 1-3 PM

1226 NE 5th Ave, Cape Coral

December Southwest Florida Dollar Volume Drops
Open House Saturday 1-3 PM

Paseo Open House Saturday 1-4 PM

Bell Tower Park Open House Saturday 1-3 PM

Rising interest rates costs buyers money when purchasing a home.  It either increases their payment, or it decreases the amount of purchase to maintain the same payment.  Buyers have been warned for some time that rates would go up, and now they’re listening. Buyers flock to beat 2018 interest rate increases in 2018.

If you want to see where rates are headed, one indicator we look at is oil prices.  As the economy improves, countries consume more oil.  As oil consumption increases, it raises the cost of oil.  Simple supply and demand.   As oil prices increase, it raises the cost of inflation because so many things are tied to oil.  Transportation costs increase, so not only does it cost you more to fill up your car with gas, it also costs companies more to move their product.

Lumber goes up because there is more demand for building plus it costs more to cut it and move it due to oil.  Food prices go up because it costs more to plow the fields, and transport groceries to warehouses and eventually the stores.  Postage goes up as Fed Ex, UPS, and the USPS pay more to deliver mail and packages.  Oil influences a lot of things.

Buyers Flock to Beat 2018 Interest Rate Increases

As you can see from the graph, oil futures have been increasing since June of 2017.  The 10 yr treasury yield has been increasing since September 2017.  Oil price and interest rates are closely tied as they feed off each other.  Oil signifies inflation may rise, and inflation rises, so typically does interest rates.

Mortgages are most closely associated with the 10 Yr treasury yield.  Perhaps this is because not all mortgages remain for 15 years or 30 years.  The average homeowner typically sells and purchases another home before their mortgage is paid off.

Buyers Flock to Beat 2018 Interest Rate Increases

If you’re on the fence about when to purchase, the recent rise in interest rates may make you move sooner rather than waiting.  Even if you own a home, it may be a good time to sell and purchase that next home.

If you sell now, you have more available buyers for your home.  As rates rise, you will lose buyers to the increased costs.  And, you’ll save when you buy your next home too.  Not only will you qualify for more home today than when rates rise, you’ll also pay less when rates are lower.

Presumably you’ll get a higher sale now with more qualified buyers than you might with less qualified buyers later, and you’ll save money on the next mortgage.  It’s a double win-win for a seller contemplating a move.  Sure, home prices may still go higher, so it’s not automatic you’ll get more for your home today.  We’re just saying there will be less competition from other sellers now and more demand from buyers now than when rates rise.  It’s always more fun to sell when you’re holding more of the cards.

Rates have already begun to rise, so sellers aren’t holding all the cards they were 6 months ago.  We are seeing more inventory, which in a way is good thing because now sellers have more options when they decide to move.  Many sellers wouldn’t sell because they had no idea on where they’d go.  That’s opened up just a bit, which helps.

Always work with an experienced agent who knows the market.  If you’d like to search the MLS for Free like a pro, go to www.LeeCountyOnline.com  It has all the listings and is updated instantly. No more wasting your time on properties that sold months ago.  And you’ll see all the new listings instantly too.

Or Call Sande or Brett at 239-489-4042 Ext 4 to sell your home.  We have a team of experienced agent partners who can help you buy your next home too.

Always Call the Ellis Team at Keller Williams Realty!  We’re here to help!

Ellis Team Weekend Open Houses

Open House Saturday 11 AM – 1 PM

9793 Deerfoot Dr

South Pointe South Lakefront Home
Lakefront Home in South Pointe South

Open House Saturday 1-3 PM

9825 Wildginger Dr

Ellis Team Weekend Open House South Pointe South
South Pointe South Maplewood Floor Plan

 

Open House Saturday 1-3 PM

14381 Hickory Fairway Ct

$410,000

Buyers Flock to Beat 2018 Interest Rate Increases

 

9071 Old Hickory Cir

$375,000

$375,000 on Golf Course

Brookshire Condo

Open Saturday 1-3 PM

13235 Whitehaven Ln #1004

$131,000

2 Bed 2 Bath Brookshire Condo

Open House Sunday 1-4 PM

16804 Colony Lakes Blvd

4 Bed, 4 Bath, 3 Car Garage Pool Home in Colony Lakes

$390,000

4 Bed, 4 Baths, 3 Car Garage Pool Home

Open Sunday 1-4 PM

Cypress Lake Country Club Villa

14401 Patty Berg Dr #101

Cypress Lake Country Club Villa with Attached Garage

As predicted local housing inventory rises heading into season in 2018.  This cycle repeats each year.  One of the things we are tracking is the moment buyers turn on and start gobbling up these properties.  Each year we tell people it takes until about January 15th or so for buyers to turn on.

Local Housing Inventory Rises Heading Into Season
Oct 2, 2017 Market Watch

So far, we haven’t seen it yet.  We just pulled fresh numbers as of January 15th and compared them to October 2nd, another data point we have saved.  We have some from earlier in year as well, and they look similar to October 2nd, so there is nothing magical about that date.

Local Housing Inventory Rises Heading Into Season January 2018
January 15, 2018 Market Watch Data

In each data point, sold and new pending sales are similar to new active listings.  What’s different about now is new listings have been outpacing sold properties about 3 to 1 and new pending sales 1.6 to 1.  At any other time, this would be alarming to see a sudden trend like this.

Because we know the New Year often starts off like this, we’re not sounding alarm bells, or false missile alerts.  We have enough of those lately.  We are telling sellers that have had their home on the market awhile that new listings are coming, so if their home failed to sell before the run-up in new listings, it may face difficult headwinds now. When selling a home, it’s always important to gauge the headwinds, and as we write this the buyers haven’t turned on just yet.

As the season goes, so goes the rest of the year many times.  The fundamentals for Florida are strong as an improving economy, new hiring, pay raises, and lower taxes is a good recipe for the housing market.  Add in the fact that Florida looks good compared to other states with the new tax code and we could see more net migration from other high tax states going forward.

When there are few homes for sale, pricing it correctly and getting it out on the market can sometimes be enough.  When listing inventory begins to rise, pricing becomes more crucial as does marketing.

It’s not enough to just list it on MLS and hope other agents show it.  You must reach the buyer.  The buyer has more choices, and often the buyer tells their Realtor which homes they’d like to see.  This takes increased advertising.

When we target buyers, we use several media.  We use traditional print like the newspaper, yellow pages and mail-outs as they still work.  We also use advanced online techniques to reach buyers.  Online we can identify buyers from up North that are looking to purchase down here in SW Florida.  We can also identify people in Southwest Florida that are interested in purchasing, then serve up ads likely to meet their criteria.

If you only market one way you’re not reaching all the buyers.  Of course, you must have a hefty budget as well to reach as many as possible.  We had a Realtor from Baltimore call us this past week wondering where we got our database of buyers.  He thought perhaps the state of Florida had one we bought into.  I told him no, it’s a large database the Ellis Team has garnered from extensive online and print advertising.

They say if a politician wants to win, they must speak directly to the people.  In real estate, if you really want to sell your home, you must market directly to the buyers.  That’s what our marketing does.

If you’re thinking of selling your home, you should call us and see for yourself.  Once you see it, you realize there is no better way to reach your buyer.

If you’re a buyer, you should call us too.  We have access to All the listings, not just the ones you see on certain websites.  You can reach us at 239-489-4042 or visit www.LeeCountyOnline.com to see All the listings.

Good luck and Happy House Hunting!

Ellis Team Weekend Open Houses

Open Saturday 1-3 PM

1465 Argyle Dr

1465 Argyle Dr

 

Open Sunday 1-3 PM

13408 Marquette Blvd

Riverfront Home

Keller Williams #1 in Fort Myers

Keller Williams Realty Fort Myers & the Islands announces that Keller Williams has attained #1 market share in 2017 for Fort Myers and Fort Myers Beach.  Both units and $ volume.

Keller Williams #1 Units 2017

 

 Ellis Team Seller’s Club January 2018 Update

You’ve probably heard the word “Season” and associated it with the traditional 4 seasons.  here is only one  real estate Season in Southwest Florida and we’re in it now.  People down here don’t think about the changing of the seasons as our weather is nice all 12 months of the year.  High season here runs January through April, depending on when Easter is.  Some people go home before taxes are due the middle of April.

Each year we know January will be a slower month for closings, and it builds until about June.  This makes sense because many June closings happened in April.  We expect showing to increase starting mid-January.  I just checked showing statistics for our MLS and the average home is receiving 2.2 showings the first 8 days of January in the $200-$450k price range in Fort Myers.  Other price ranges vary.  Last year showing stood at 2.4 showings the first 8 days.

Only One Real Estate Season in Southwest Florida

We have more showings this year because there is more inventory, but it’s down slightly per home.  I wouldn’t read too much into 8 days of data.  As you can see from the graph, February closings should be slightly higher than January.  March is when you’ll really start to see the increase, if 2018 is anything like past years.

If you’re a buyer, you probably want to get your bids in before other buyers start buying all the listings.  If you’re a seller, now is the time to get your home on the market, as the rush is coming.

If your home is on the market and not receiving offers, you’ll want to make sure you’re priced correctly by February.  Your best chance will be February and March, so you don’t want to miss that market.  Even though we have a rush of buyers here in Season, over-pricing is a sure-fire way to make it not sell.  Buyers will purchase, but nobody likes to overpay.

Sellers want to make sure their home is properly exposed.  We have more buyers here in Season, but if they don’t see or know about your home, it won’t stand out.  We take extra measures to make sure our listings stand out.  For instance, a sign is not enough to expose a home.  We use advanced digital marketing techniques, as well as traditional print marketing like the newspaper and yellow pages.

You might laugh and say traditional doesn’t work, but we have sold some properties directly off these old and proven mediums.  As for digital, this encompasses everything on the Internet to email to mobile advertising.  We have an advanced way to target buyers looking for exactly what you must sell.

For instance, Google, Bing, Facebook, and others know if you’re shopping for back to school clothes or for curtains for your home.  They’ll serve up ads to you because they know that’s what you’re currently looking for.  The same is true for housing.  We know how to reach waterfront buyers, golf course buyers, condo buyers, first-time home buyers, 55+ buyers, and on and on.  Whatever you’ve got to sell, we know how to reach the buyer.

It is quite advanced, and it really works, as long as your home is priced correctly.  We can send all the interested buyers your way, but if the home is over-priced it still won’t sell.  If you’re shopping for an item online and it’s $85 on one site and the same or similar item is $65 on another, people will purchase the better value.  Sellers must turn their focus off what features and upgrades cost and more on the overall value.  You must think like a buyer.  What would you do if you were the buyer?

We can help you price your home correctly.  We offer advanced marketing for your home too, so we can get your home sold for top dollar and faster than the average Realtor.  All Realtors are not the same.  Call Sande or Brett 239-489-4042 Ext 4 to list your home, or speak with one of our friendly and knowledgeable buyer agents to purchase your next home.  Visit www.LeeCountyOnline.com to search the MLS like a pro for Free!

Ellis Team Weekend Open Houses

Open Saturday 1-4 PM

Cape Coral Lakefront Pool Home

.68 Acres   Gated Community

 

Open House Saturday 1-4 PM

Waterfront Condo With Marina

Thinking of Selling?

Find Out What Your Home is Worth for Free!

 

Welcome to the New Year.  Let’s look at some things we’re watching this New Year in our January 2018 Southwest Florida real estate market update.

Many agents we talk to are focusing on the fact that sales are down 12.4% in November.  Others notice that total dollar volume was down 10.5% in November.  Those are two data points we also look to gauge the overall health of the market, but it must be done in context.

January 2018 Southwest Florida Real Estate Market Update

January 2018 Southwest Florida Real Estate Market Update

We’re choosing to look at other data points right now and we’ll explain why. New pending sales are up 8.1%.  That bodes well for closed sales heading into season. New listings rose 9.8% in November over last year.  One could argue that sales have been riding even or ahead of last year, but down from 2016 levels is the fact that inventory has been low.  We’ve had a low inventory market for the past few years.  It is slightly rising now and that may be a good sign.

This gives home buyers more choices.  It also signals home sellers that have failed to sell that it’s time to re-evaluate their price.  If the market hasn’t responded to your price in 2017, it may not in 2018 either if inventory rises.  A new year is always a good time to re-evaluate and make changes.

While new listings increased in November, total available inventory fell.  Pending inventory increased which took out some available inventory.  Declining dollar volume in November makes agents feel like the market has slowed, but it’s a now indicator.  That now is a direct result of the hurricane.  The future indicators tell us the market could be picking up steam.  Therefore, it’s dangerous to evaluate the market by a sole month or single data points.  They must be evaluated in their entirety, and even then, it’s difficult to predict the future with certainty.

We always tell people season begins to pickup around January 12-15th, and it builds from there.  Very soon the 2018 season will come into focus.  We see some good signs moving forward.  As always, proper pricing matters.

Proper Pricing Critical For Home Sellers

No matter if it’s an up, down, or sideways market it’s critical to price your home to today’s standards.  Overpricing will get you in trouble regardless of how you perceive the market.  We do not have a runaway market to the upside.  We do not have a falling market.  The 2018 Southwest Florida real estate market is holding its own.  We have buyers and sellers, and that’s a good thing.  Buyers want to pay a fair price and sellers want to sell at a fair price.

As an agent, buyer, or seller, you can’t ask for anything better than that.  The difference between success and failure could well be determined by the agent you select.  Proper pricing and presentation to the market are critical.  Not every agent has the same skills or background to properly present your home to the market.

A great website to check out prices in your neighborhood is www.LeeCountyOnline.com You can be alerted when new properties come on the market in your neighborhood.  You can even get an online evaluation of your home for free.

Buyers love this website too because it is updated instantly directly from the MLS.  It has all the properties, so you don’t miss out on new properties hitting the market or outdated data.

Always Call the Ellis Team

If you’re looking to buy or sell, you should call the Ellis Team at Keller Williams Realty 239-489-4042.  We make sure our buyers and sellers understand the market.  Buying and selling real estate is easy when you have a pro backed with data that can help you make the best decision for your family.  It’s scary when you’re not confident you’re making the right choice.  An experienced agent backed by years of research can really help.  We’re not here to sell you anything.  The Ellis Team is focused on accomplishing your goals.

Call us if we can help, or research yourself at www.LeeCountyOnline.com  Good luck and happy New Year!

Southwest Florida Home Prices Rise $100,000 Since 2013It’s hard to believe we’ve watched local Southwest Florida home prices rise $100,000 since 2013.  Official numbers were just released for November which shows the median home price in SW Florida at $245,000.  The average home sale price in November was $317,109.  Compare that to 2013 when the median sales price in November was $170,000 and the average was $236,550.  That’s not quite $100,000 difference but you only need go back just a few more months and we’re there.

Southwest Florida Home Prices Rise

What’s caused home prices to increase so much, and will it continue?  The past is always easier to explain than the future is to predict, so we’ll start there.  Our market over-corrected to the downside so we had lots of room for upside pricing.  Our market statistically bottomed in 2009 but not for all price ranges.  The upper end took longer to correct.

The boom only did one thing.  It brought needed housing to SW Florida. Because the boom involved flipping, we didn’t have the end user to sustain the market.  It was a False high.  The error wasn’t the increased housing the boom brought.  It was the speed of which that occurred.

Southwest Florida needs more housing.  Rents are sky high and prices have been rising.  Florida is an expanding market.  Immigration leads to need for more housing.  And don’t forget Florida is a net migration state winner as well.

High tax states like New York, New Jersey, and Illinois are losing residents by the droves.  They are leaving high tax, foul weather states and moving to states like Florida, Texas, and Arizona.  Notice a trend here?

Low taxes, great weather.  If all we had was low taxes, we would gain residents.  If all we had great weather, we would gain residents.  Because we have both, it’s winner, winner chicken dinner for Florida.  Texas is seeing transplants from CA.  We’re seeing Midwestern and east coast migrations.

After Hurricanes Maria and Irma battered Puerto Rico we expect to see more migration from there as well.  Going forward this leads us to believe home prices have more to go on the upside.

We do not see a downside price risk like we did back in 2005.  The difference is end users.  We have them now, we didn’t back then.

Tax Reform Will Help Florida

The new tax reform also will help Florida.  Local, state, and property taxes deductions are capped at $10,000 under the new law.  Florida doesn’t have a state income tax, and many people’s property taxes are below $10,000, so most Floridians will benefit from the full deduction.  People in high tax states will not, and this will make Florida look even more attractive.

We could see some companies decide to relocate as well.  Because the new tax code is favorable to companies, we don’t believe they’ll need to relocate, but some smaller companies could.  Each time this occurs it hurts the northern states because they’re not competitive and it helps our state.  As more and more people leave those states, it brings an increased tax burden on fewer residents, which further exacerbates the situation.

Florida really is sitting in a good position.  Hopefully our planners are planning for more schools and better roads, because we’ll need them.  It will be interesting to see how fast the new tax code revs up the economy.  Some say it’s already started.  We think 2018 could be a good year and 2019 could be even better.  We’re keeping an eye on interest rates and a few other things, but overall, we see good things for Southwest Florida real estate.

If you’d like to search the MLS like a pro, visit www.LeeCountyOnline.com  You’ll see All the homes, and in real-time too.  No more missing out on great buys to other buyers.

Of course, you can always call us at 239-489-4042.  If you’d like to list your home, ask for Sande or Brett Ext 4.  We have buyer specialists ready to help you make your move as well.

Always call the Ellis Team at Keller Williams Realty for all your real estate needs!

This past week I’ve spoken with several real estate agents in Southwest Florida and all have offered varying perspectives on the current state of the real estate market.  Two feel the market has stalled and not doing much while others feel the market is on fire for December. We believe Santas sled bringing gifts Southwest Florida.

Just looking at the quick Market Watch statistics provided by our local MLS we can see that in the last 7 days 291 new listings came on the market in Lee County and 265 went pending.  That sounds like a pretty balanced market.  If you look further, you’ll also notice 257 price reductions.

Santa’s Sled Bringing Gifts to Southwest Florida

It’s possible we placed so many homes under contract because, so many sellers adjusted their price to get in line with the market.  Price reductions are not a bad thing.  Imagine getting a D or an F on a test and being stuck with that grade.  It kind of stinks doesn’t it?

We’ve probably all had that one teacher that allowed test re-takes and makeup homework.   This teacher was more interested that you eventually learned the material than if you learned it on time the first time when it was due.

Price reductions are a lot like test re-takes.  You misjudged the market the first time.  Your final grade can still be salvaged, if you respond to the teacher’s directions.  You must show up and try again.  Some say you must try harder.  Wanting that A isn’t the same as working for it.

An A in a real estate sale is selling at fair market value in the time-frame that works for you.  If you overprice the home and it eventually sells for less because it became stale on the market, you don’t get an A.  When your home takes longer to sell, and you miss your ideal time-frame because you overpriced the home, you don’t get an A either.

You can still get a B though.  The sooner you react and make changes, the higher your grade will be.  Sellers who price correctly upfront receive higher sales prices and faster sales than sellers who overprice the market.

In a shifting market, you never want to get caught chasing the market down.  I’m not convinced we’re in a shifting market.  We had 5 closings last week and several more for the month.  That’s the result of hard work in October and November.  The sales we have in January will be a direct result of the hard work we’re putting in this month.  December is a month where many Realtors take off and ride easy into the New Year.  They tell sellers nobody is buying in December and we’ll go get them next year.  The truth is sales are there, if you’re hungry and willing to work for them.

The Ellis Team is hungry, and we work hard all 12 months for our buyers and sellers.  We’re getting Top Dollar for our sellers.  When the market doesn’t respond, we’re honest with our sellers.  Just because your home doesn’t sell in the first 30 days doesn’t mean you have to take an F in the class.  In fact, if you’re time frame didn’t dictate a 30 day sale, there’s still time to get an A.  If you absolutely must sell your home quickly, over-pricing it doesn’t make much sense, does it?

We’ll be glad to sit down with you and discover your needs.  Together we’ll come up with a marketing and pricing plan to get you on your way.  Santa is bringing gifts, so you might as well get yours.  The market is good!

Always Call the Ellis Team

Call Sande or Brett Ellis at 239-489-4042 Ext 4 if you’d like to explore selling your home.   If you’d like to shop around on the MLS, check out www.LeeCountyOnline.com for Free.  It has all the listings and is updated instantly when new properties enter the market.  You’ll beat out other buyers to hot new listings.  It’s like having the teacher’s test ahead of the other students, so take advantage.

Happy Holidays from the Ellis Team at Keller Williams Realty.

New Southwest Florida real estate blog

Putting off that home purchase?  Perhaps you’re saving up for the down payment, or you’re waiting on sellers to reduce prices?  That might cost you in the long run.  Let’s explore the cost of waiting to purchase SW Florida real estate.

Cost of Waiting to Purchase SW Florida Real Estate

In October median prices were up 6.7% and average prices were up 8.6%.  These numbers are indicative of how we’ve been running all year, so we’ll say they’re legit for conversation purposes.

Cost of Waiting to Purchase SW Florida Real Estate

Let’s assume home prices increase 5% going forward.  That’s reasonable compared to this past year.  The Federal Reserve is expected to hike rates this week and the consensus is 3 times again next year.  Right now, as of time of this article the Fed Funds rate is 2.1%.  It’s expected to climb to 2.7% in the next year and 2.9% into 2020. That’s almost a 1% incline in rates.

If rates go up 1% and home prices go up 5%, it will cost a buyer about $12,500 in price which translates to an increase of $190.38/Mo in payment.  Over the life of the loan that’s an additional $68,537.

When people see it broken out like that they realize the true cost of waiting.  This doesn’t even factor in the equity gains over 15 or 30 years. If someone were to rent and never purchase, they would never end up with a paid off home for retirement.  Buying real estate is the single best option for people to build wealth.

Sure, perhaps you could have been lucky and bought Bitcoin 8 years ago.  You’d be wealthy today.  However, you could have lost everything, and you still could as the jury is still out on its long-term value.

Real Estate a Hedge Against Inflation

Tangible assets are a hedge against inflation.  Therefore, people buy real estate, gold, silver, etc. in inflationary times.  The difference is if the price of gold or silver goes down, you can’t live in it.  Gold or silver can’t be rented out and you can’t draw income from them either.  You can live in real estate whether it’s up, down, or sideways.  You can usually rent it out too and have someone else pay your costs of ownership.

At present we don’t know what’s in the final tax bill.  We don’t know if it will even pass, although we believe something will.  There are some provisions that may not be as friendly to real estate.  Hopefully this will be offset by provisions that should jump-start the economy.

Florida stands to gain versus other tax heavy states which could lead employers and people up North seeking more tax favorable states.  We could envision a scenario where companies decide to relocate to tax friendly states like Florida, Texas, and other low tax states.  This could offset possible mortgage interest deductions and deductions for state and local income taxes.

Nothing we’ve seen in the bills so far would hurt Florida.  Whatever they do to real estate, Florida will be less impacted than most.  Florida stands to gain if other states are hit hard.

No Benefit Waiting

The bottom line is we don’t see any benefit in waiting to buy.  It will only get costlier both in terms of rate and prices.  And if sellers are waiting to sell their properties up North, right now might be the time.  Imagine an exodus out of high tax states.  That’s not a fun time to sell when everybody else is selling, all the while buyers are high tailing it down to Florida.

We’re already seeing net migrations out of NY, NJ, IL, and CA.  This could heat up in a few months if tax policy plays out like they’re talking.  Florida stands to gain, and you can too if you beat the rush.

www.LeeCountyOnline.com has all the listings, and it’s updated instantly.  Finding properties on the  Internet that sold months ago or have incorrect pricing is frustrating.  It’s difficult to beat out other buyers to hot new listings with bad information.  Our website fixes all that for you.  When time and expertise advice matters, Always call the Ellis Team at Keller Williams, 239-489-44042, your one-stop shop for great real estate success.  If you’re thinking of selling, ask for Sande or Brett Ext 4.