You’ve heard the expression Tis the Season, and in real estate season can mean many different things depending on where you live, and what type of product you’re referring to.  Let’s talk about the Seasonality of the SW Florida Real Estate Market. For many years in SW Florida condo sales were highly dependent on seasonal sales, and in many tour developments that is still true.  However, even with condos there are differences.  Some condos are located at the beach; some can be rented weekly Vs monthly, and so on.  There are only a few golden rules in real estate; Location, Location, Location, and Price.  If you over price a home in this market, chances are good it will not sell, and we all know location makes a difference, although some would argue it’s still a function of Price.  The better the location, the better the price, but that’s the old chicken and egg theory we’ll stay away from today.

Today we thought we’d illustrate some seasonal trends in single family home sales throughout the years. For many years we’ve told people single family home sales traditionally peak in the summer months, perhaps because kids are out of school and that’s when the relocations tend to take place, and perhaps that many of our buyers over the years were move-up buyers and they had more time to look after the Season their business just had.  For years we didn’t have large companies employing hundreds or thousands of people, so many of our buyers worked for or owned small business, and they were busier in Season than out of season.


Seasonality of the SW Florida Real Estate Market
Monthly Sales Graph since 2005 Showing Seasonality of SW Florida Real Estate Market

We have attracted a few large employers, although a few more would be welcomed by all here I think.  Our market has been in turmoil since 2005, so we weren’t sure the charts would show the traditional rule of thumb that home sales tend to peak March through end of summer.  Upon further study of the home sales graph, it does seem to hold true even in this time of change that home sales peak in the March through Summer time frame, and as we enter the fall one might expect home sales could decline.

This year may or may not be like recent past years as we have a first time home buyer tax credit in play that expires November 30, artificially low interest rates as the government has been buying treasuries at least through October, and artificially low property values due to the distressed nature of the market.  Put all this together and you’ve got a Perfect Storm for record sales, and we’ve seen that for the past year.

So what could speed this train up or slow it down going forward?  In a few weeks interest rates could head up if the government doesn’t decide to keep them lower.  If so, rates could shoot up over 6% almost overnight like it did a few months ago last time their decision was about to expire.  Additionally, the first time home buyer tax credit could go away, thus taking some motivation out of new buyers in the market.  How the public reacts to the overall economy, health plans, stimulus money, bailouts, etc. could also affect public confidence about the direction the country is headed, and affect purchasing decisions.  All these could slow the train down.

The train could also gain momentum if the government enacted a tax credit for all buyers, not just first-time home buyers.  Nationwide we’ve been lacking the move-up buyer, and that’s certainly true here as well.  A tax credit for everyone would spur a recovery in the overall market, and may decrease pressure on banks.  As tax payers we either spend it here or spend it there, however if we help save the banks and spur home sales we also help the economy and increase jobs at the same time.  It would also help if the government keeps interest rates low by buying treasuries allowing the market more time to heal itself.

A reform of the newly enacted (May 1) appraisal rules would also help the market, as new rules intended to help have actually hurt, and have not increased quality of many appraisals.  We would argue the new government program has increased costs, increased inefficiencies, and spurred out of town appraisers who don’t know the market’s intricacies, but what would you expect when you put the US government in charge of local property valuation rules?

Some banks are getting better at evaluating and approving short sales when they make sense and some have gotten worse.  How banks make decisions today will affect future foreclosure inventory.  We believe foreclosures coming to the market may increase in the next year, which will help sales because inventory has been shrinking, and this will bring more affordable housing to the market to replace dwindling inventory.  We don’t see rapid price increases on the horizon until we see job growth, and even though we have artificially low sales prices, we are seeing sales because they are bargains.  I’m not sure we’d see anywhere near the sales volume if these bargains went up significantly in price overnight, and this is why I don’t think prices will jump dramatically when inventory contracts until the overall economy heals with the housing market.  And this is why we are in favor of a home buyer tax credit for all, so we can heal both simultaneously.

Official real estate sales numbers were recently released so we decided to take a look at how the Fort Myers/Cape Coral market fared against the top markets in the state.  Cape Coral/Fort Myers is considered a metropolitan statistical area (MSAs) Our MSA includes Bonita Springs, Estero and all of Lee County Florida.
Let’s start off with the bad news and get that out of the way, which will lead us to the good news.  The bad news is the Cape Coral/Fort Myers MSA led the state in median sales price decline year over year for July.  Lee County was down 43% to $89,000 in July 2009, down from $154,900 in July of 2008.  This isn’t new news as we’ve led the state all year as SW Florida was perhaps the most over supplied market in the state for single family homes.
This leads us to the good news. Our area also leads the state in sales increases in transactions.  Because SW Florida was quicker to react than other markets, we were quicker to post sales gains.  The Cape Coral and Lehigh Acres areas have been the focus of news reports on NBC Nightly News, the Today Show, Wall Street Journal, and many other worldwide media outlets which has led to an awareness of the bargains available in SW Florida.  You’ve heard the old saying, “Even bad press is good press.”  Well, it’s certainly true as Lee County has drawn the attention of northerners, Canadians, Europeans and Germans among others looking to buy a piece of paradise at a decent price.
While we have seen many northerners buying second homes in our area, most of the single family home sales have been first time home buyers and investors.  My friend Jeff Tumbarello with the SW Florida Real Estate Investors Association recently did a study and found recent sales were 64% cash buyers, which is an indication investors have found SW Florida and realize it is a bargain.
Cash buyers can also be a sign that the new government appraisal rules are not working and are limiting many home sales.  The new program is called HVCC and stands for Home Valuation Code of Conduct.  This new program creates a middle man and increases costs to borrowers, and it prohibits communication from loan officers and appraisers.  At first glance this may sound good, but in reality it has increased pressure on appraisers to turn around appraisals quickly, while at the same time slowing down appraisals getting to the lender.  Imagine that, a government program increasing costs, increasing pressure and slowing things down.
The worse news is buyers are shopping these bargains, finding them, making offers and applying for financing only to be told that an out of area appraiser doesn’t think these homes are worth it.  The buyer wants to buy, and the seller wants to sell, but neither can, so it goes back on the market and is sold to a cash buyer for less because regular buyers can’t get financing.  Many of the foreclosures go to cash buyers because bank asset managers know it’s tough to get financing buyers through due to appraisal issues.
Fannie Mae and Freddie Mac back most of the loans other than government FHA and VA loans, and both have adopted the HVCC which was put together by regulator Federal Housing Finance Agency (FHFA), so we’re stuck with appraisal rules whether they’re good or not.  We can blame our government for keeping home prices artificially low and preventing many qualified buyers from purchasing a home they wish to buy.  I’m sure there are some good aspects to the rules, but the reality of the results is wrecking the market and changes should be adopted quickly.  Rules should not dictate market value, the market should.  These new rules will actually fuel further foreclosures from sellers who cannot sell.

Fort Myers-Cape Coral Sales Trends
The statewide average of home sale growth was 37%, and you can see Fort Myers/Cape Coral blew that average away at 104% The next closest was Miami at 64%.  As you can see, many metro areas are experiencing home sale growth which is encouraging, and this growth would have been much better both here and statewide if the appraisal issues were corrected.  We expect foreclosures to increase this year over last year.  The good news is buyers have absorbed all the foreclosures and eaten into existing inventory.  The sooner we fix the appraisal mess the government created, and complete the foreclosure cycle, the sooner our market will be back to normal.  In the meantime, enjoy the higher sales volume and the bargains as our market heals itself.

A new video has been released that explains the First Time Home Buyer Tax Credit. It is called RE/MAX Agents Know $8k Tax Credit

It explains what the following:

  • Definition of a first time home buyer
  • The difference between a credit and a deduction
  • How to get up to $8,000 refund on your taxes
  • Income Limits to Qualify
  • If you don’t owe taxes, Can you get the credit back?
  • Deadlin Coming up Soon
  • Time is Running out, so call a Realtor today

You’ve heard reports that listing inventory has been coming down for many months.  This is true, and not only have buyers absorbed all new inventory coming onto the market, they have also helped to purchase a backlog of existing inventory as well.  We wondered if inventory levels relative to home sales were declining in all price segments, so the first thing we did was looked at what the month’s supply of inventory was back in January in our State of the Market Report.
We decided it would be interesting to compare inventory levels from about 8 months ago to where they are today and sort them by price range to see which price ranges are hot and which ranges are not.

SW Florida Real Estate Inventory by Price Range
The results are in and you can tell by the graph that the most dramatic changes are in the 0-$100,000 range and the next one up at $100-$200,000 ranges.  Months supply of inventory fell dramatically in the entry level markets, down from over 20 months to just over 4 months.  First time home buyers and investors are scooping up these bargain properties as quickly as they enter the market.  The 100-$200k range has also done well, declining from 12 months supply to 7.82 months supply just since January.  As we reported last week, the first time home buyer tax credit is helping first time home buyers in the entry level market and this graph supports that. However there is nothing in the tax code that helps the broader market and perhaps this is why we haven’t seen the move-up buyer.  In fact, we have seen many first time home buyers buying short sales and foreclosures. As we know the banks won’t be buying anything after the foreclosure sale and short sale sellers won’t be buying for a while until their credit is repaired.
This is why we’ve advocated an across the board tax cut for all buyers.  The real estate market is 26% of GDP and has led the economy out of each recession. Our economy would be better served if we invest in strengthening the entire real estate market and it will lead us out of this recession.  We’re not in favor of all these government bailout programs. However, if we are going to invest money it would make sense to spend it in areas that actually may work vs. what our government has been doing.  We’ve seen TARP money for the banks, a stimulus package that so far hasn’t produced jobs as advertised, and a bailout for auto companies.  The cash for clunkers was a success in that it spurred car sales. If spurring across the board home sales helps get our economy back on track, it might be worth looking at.
Once we get to the $200k+ range the numbers begin to look eerily similar to what they were in January.  There is improvement, and I’m sure all SW Florida home sellers will take improvement where they can find it.  We are not seeing improvement in sale prices and in fact sale prices are still falling in the $300,000 + ranges.  We have seen a bottom form in the entry level home prices, and certain waterfront property seems to be holding its own as well.
One bit of good news is we are seeing northerners buying second homes in SW Florida as prices have dropped to affordable levels.  Northerners are afraid these bargains may not be here in a few years when they’re set to retire and in many cases they may be right.  Prices are below replacement cost and this will not last forever once inventory is absorbed.  While there is pent-up demand for bargain properties, there could also be pent-up supply from home sellers who would like to sell but just can’t today due to the prices.  Once the market levels out across the spectrum, it will be interesting to watch and study those forces.
For now, we see another year of banks shedding bad loans.  We expect several of the large banks to essentially double the foreclosures.  All you have to do is study their SEC filings to see that this coming year most banks are budgeting twice as much in write downs as they did last year then do the math.  The good news is our market is absorbing that inventory.  The bad news is that pent-up supply of home sellers who would like to sell may be put off in time.  Let’s just hope enough can hold on until we adjust through this next wave, and let’s hope Congress addresses strengthening the entire real estate market, not just the entry level.  As you can see by the graph, home sales aren’t trickling up.  If we strengthen the entire market, there will be less bank foreclosures, more families will stay in their homes, and the economy recover sooner, thereby creating jobs again.

We’re doing something new this week for the Future of Real Estate Radio Show here in SW Florida.  This week’s special guest is Lee County Property Appraiser Ken Wilkinson, and this week we video taped the show as it was being broadcast and we’ve decided to bring it to you in video format as a test.  We’ve separated the broadcast into 6 parts so you can watch any and all parts that interest you.

Ken Wilkinson Property Appraiser Lee County Florida
Ken Wilkinson Property Appraiser Lee County Florida

Future of Real Estate July 4, 2009 Part 1

  • Cape Coral water and sewer assessments effect on valuations
  • Mass appraisal system Vs. Fee appraisal system
  • Property Appraiser must assess 604,000 properties annually
  • Chinese Drywall and it’s effect on value
  • Mold and it’s effect on value
  • Functional Obsolesence
  • Economic Obsolesence
  • Cost to cure
  • Property Appraiser assessment Vs. Property Taxes

Future of Real Estate Part 2

  • Property Appraiser assessment Vs. Property Taxes Continued
  • 92 Taxing Authorities countywide
  • Property Appraiser’s office provides analysis of market January 1 to each taxing authority
  • Taxing authorities set their tax rates
  • Truth in Millage (Trim)
  • Rollback Millage
  • Gut feeling of what politicians will do with tax rates
  • Federal stimulous money effect on taxes
  • County budget’s being evaluated
  • Property appraiser’s office being defended by County Attorney’s office beginning July 1,2009 to save money

Future of Real Estate July 4, 2009 Pt 3

  • New Technology at Property Appraiser’s office
  • AVM-Automated Valuation Models
  • Multiple Regression Analysis
  • 2D 3D Line of Sight Model
  • View and Floor Height’s effect on value

Future of Real Estate Pt 4

  • Assessed Values down in 2008
  • Pockets of fluctuation
  • North Cape and Lehigh Acres went down fastest
  • Countywide average down over 25%
  • $27 Billion Less taxable value From $110 Billion to $83 Billion
  • Lehigh Acres Ground Zero
  • 80% of sales in some neighborhoods short sales or after foreclosures sales
  • 2009 taxes reflect 2008 sales
  • Weighted sales-4th quarter
  • Department of Revenue

Future of Real Estate Pt 5

  • Tax Referendum
  • Governor Crist
  • Property tax ammendments Nov 2010
  • Recapture
  • 3% or CPI, whichever is Less
  • 2008 recapture rate .1%

Future of Real Estate Pt 6

  • Bill signing Tallahassee Florida
  • Aerial Technology to substitute visiting each property (Desktop Review)
  • Electronic Permits
  • Lee County Lowest Cost per parcel in Florida

Below is a graph of inventory levels in just Fort Myers and Cape Coral since 2004.  The blue line is the active inventory listed in MLS and the orange line is the pending sales listed in MLS.  As you can see, back in 2005 there were as many buyers in the marketplace as there were sellers trying to sell.

Listing Inventory in Fort Myers and Cape Coral MLS
Listing Inventory in Fort Myers and Cape Coral MLS

 These figures do not include all of Lee County Florida, but rather just the Fort Myers and Cape Coral areas of Lee County.  At the end of the graph you’ll see a slight increase, but this is due to us switching MLS systems and including slightly more data.  We’ll watch this trendline from here on out but we can say inventory has been decreasing for months and foreclosures have not been keeping pace with the record sales we’re experiencing here in SW Florida.

Bank foreclosure agents we’ve spoken with all are noticing a decrease in bank foreclosure inventory.  The Ellis Team has sold much of it’s bank owned foreclosure inventory and have just about 6 left.  We expect more in the future, but as of right now first time home buyers, second home buyers, and investors have scooped up all but 6 we just received.  The 6 bank foreclosures have bank financing available at 4% interest with a 7 year balloon and 5% down for a primary buyer, and 6% interest and 20% down for an investor, or buyers can obtain their own financing.

May 2009 Ellis Team SW Florida Real Estate Current Market Index
May 2009 Ellis Team SW Florida Real Estate Current Market Index


The Ellis Team May 2009 SW Florida Real Estate Current Market Index shows relative stability.  We switched the way we compile the data for this report, and it looks like the index held steady at 3.99, up slightly from 3.72 the month prior.  All signs point to big sales ini April once they are released.  We are tracking over 1,400 single family home sales in April, which far exceeds sales from last year.

In the coming days we will be releasing a Fort Myers-Cape Coral inventory chart which will show available inventory in just those areas, as well as pending sales activity.  Lee County overall single family inventory stands at 12,579 which is up slightly from last months number of 12,356.  Again, we switched data compilation sources and we now feel we’ll pick up a few extra listings by making the change, so it’s possible inventory didn’t really increase at all.

First time home buyers hoping to take advantage of the $8,000 tax credit are competing with investors trying to scoop up bank foreclosure bargains.  Pending sales currently are running high, and might even be higher if we weren’t running out of foreclosure inventory.  The lack of foreclosure inventory may lead to reduced sales going forward if foreclosures do not pick back up again soon.  Some think the banks will be taking possession of more foreclosures soon as they work through the process, but less are being filed each month.

That is the question WINK News asked.  WINK interviewed Brett Ellis and wanted to know how bank foreclosures were affecting the local SW FLorida real estate market.  See WINK News report Local Housing Rebound?  Bank foreclosures are drying up, and first time home buyers are competing with investors for these good deals.  Inventory levels have continued to fall as home sales break all-time records.  Because builders are not building right now, it will be interesting to see what happens if we don’t have a continued pipeline of affordable bank foreclosures to sustain buyers insatiable appetite for housing in SW Florida.

Brett also did a newspaper article with the Fort Myers News Press about how Lee County’s Meltdown Turns Golden for home buyers. Agents are amazed at how far prices have dropped, and perhaps they have over corrected.  Listing inventory has fallen sharply in hard hit areas like Cape Coral, and Lehigh Acres is seeing a resurgence in home buying activity as buyers jump from Cape Coral in search of affordable houing in SW Florida.

Here are a few ways to search for bank foreclosures on our website:

Cape Coral Foreclosures Under$100k

Cape Coral Waterfront Foreclosures

Fort Myers Bank Foreclosures Under $200k

Fort Myers Bank Foreclosures $200k & Up

Reflection Lakes Foreclosures

Lehigh Acres Bank Foreclosures Under $100k

Lehigh Acres Bank Foreclosures $100k & Up




Lehigh Acres Foreclosures Under $100K
Lehigh Acres Foreclosures $100k and up

Brett Ellis appeared recently on NBC’s Today Show on April 19, 2009.  The report focused on housing deals in SW Florida and if now is the time to buy.  One Realtor talks about the buying frenzy and the bank foreclosure deals to be had presently in SW Florida, but time is running out.

Additionally, the report focuses on the $8,000 tax credit, and buyers competing with investors for the bargain buys. Brett Ellis of the Ellis Team at RE/MAX Realty Group in Fort Myers stands in front of a home that is priced 1/5 the price of what it sold for just a few short years ago.  Because of the tremendous buys, many buyers are bidding on properties.  One buyer in the report bid on 14 properties until they were successful.  The best bargain buys go quickly and many receive multiple offers, so you have to act quickly and have your ducks in a row.  This means getting pre-approved for a mortgage through the correct lender, and using all the forms the seller requires and filling them out correctly.

There are tips to being the successful bidder, and experienced agents in the foreclosure business know what these tips are.  Listen to the advice you receive from your agent, and if they tell you there are multiple offers on the property, believe it.  It’s far better to get your 1st or 2nd choice then your 15th.

Contact the Ellis Team at RE/MAX Realty Group in Fort Myers for bank foreclosure buys in Cape Coral, Fort Myers, Lehigh Acres, and all of SW Florida.


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Due to a shortage of U.S. manufactured drywall between 2004 and 2007, many builders were forced to buy drywall imported from China. The “Chinese drywall” has been linked to seeping sulfide gases that can corrode electrical wiring and components of air-conditioning and other household appliances. Some residents have been forced to move from their homes, and a few builders in Florida have begun gutting homes and replacing the drywall.

We have found some helpful information put out by the Florida Department of Health that may be help to answer some questions the public may have regarding if Chinese drywall is present in your home and what the health implications may be, as well as where to turn for help.

See Frequently Asked Questions:  Here is a sample question.

How do I know if I have “Chinese drywall”?

Unfortunately, there is no easy answer to this question. The most definitive method to date is finding a “made in China” marking on the back of sheet of drywall. DOH observed some drywall in several homes with no discernable markings. The origin of the unmarked drywall is unknown. DOH observed that homes with marked Chinese drywall also contained drywall marked as made in USA. Remember that we do not know how many sheets of the suspect drywall can cause problems. DOH did observe at least one home with marked Chinese drywall with none of the associated corrosion or odor problems. The bottom line is we think the question should really be “Does my house have corrosion problems?”

How to File a Consumer Complaint: Useful information on who to contact if you’d like to file a complaint.

Case Definition and Pictures (Does My home fit the investigation criteria?)

We will continue to provide additional information and resources as they become available.  You can also listen to The Future of Real Estate each week as we bring you important information and news regarding real estate in SW Florida.