As we’ve been telling you in these articles, we expect sales to trend downward once official numbers were released, and that is the case.  We still have some pretty good numbers though, and as you can see by the chart, the 2^nd quarter of 2010 is the 2^nd highest on record.  2009 was the highest on record.  We’re still topping 2005 levels by a large margin. 

Lee County Single Family Home Sales

Home sales fell 12% in June over last year, down from 1,705 last year to 1,501 this year.  Last month sales were 1,460, so we actually picked up a few sales.  Single family home prices were also up about 10% over last year.  Median price this year is $96,600 in June compared to $87,900 last year.  Prices were roughly even in May 2010, so prices pretty much held steady. 

Condo prices also held steady, holding at $131,400.  They were $131,900 in May, and $125,300 last June.  Condo sales were up 11.11% 

So what does all this mean?  We have seen an increase in phone calls lately and an increase in buyer activity in the higher price ranges.  This is a departure from last year when buyers only wanted the bargain basement homes.  Buyers in the higher price ranges still want value and are not willing to overpay by any means, but at least activity is picking up.  This can be attributed to the higher priced homes coming down in value and entering the buyer’s radar screen on where they perceive values should be. 

Buyers don’t always have a realistic view of what properties are worth, just as many sellers don’t.  The exciting time in the market is when buyers and sellers perception become closely aligned.  It is precisely then that transactions can occur. 

We would have more transactions occurring if more sellers could afford to sell.  Many sellers just owe too much to sell at these bargain prices.  Of course, if more sellers could afford to sell it would add inventory, so the market has a way of balancing itself out. 

We don’t think prices are going back to 2005 levels any time soon, but at least prices are on the rise, and home sales are faring well.  I’ve spoken with a few lenders who have said mortgage applications are down.  This is true in SW Florida and nationwide.  We have seen an influx of cash buyers again as banks are sometimes stingy with the money.  We have seen some lenders loosening some of their lender requirements.  There are some 100% financing loans out there and interest rates are down to about 4.25% 

Some buyers have backed off because they lost out on the $8,000 tax credit.  The interesting thing is, rates were 5.5% back when this program was in effect, so by waiting, a buyer would now save $54,612 in interest on a $200,000 loan.  Not bad for waiting just a few months. 

Will we ever see interest rates this low again?  Will we ever see home prices this low again?  Will we ever see them this low again together?  I think the answer may be No to questions 1 & 2, and definitely NO to #3.  Never before have we seen this much buying power in the market, and perhaps this is why home sales are still hanging tough.  If you‘re a buyer, their really isn’t a better time to buy than now, and that is a fact!

Seems like the topic of the day is what’s up with the oil slick and how will it affect us?  The answer is it could affect us in three ways:  Environmentally, Economically, and Politically. 

We’ll leave the political arguments to the experts on TV.  Environmentally people realize how it could affect beaches, sensitive estuaries, fish, and the like.  Economically this could have a ripple effect on boat captains, restaurants, tourism, and ultimately real estate. 

Gulf Coast Oil Spill's Effect on Real Estate in Florida

We should not put our heads in the sand and pretend like it doesn’t exist, but I think too many people are suffering from FEAR (False Expectations Appearing Real)  Many times the potential of what could be is far worse than anything that actually happens. 

Here are a few real estate examples.  I remember on two occasions a church was proposed that backed up to a subdivision.  All sales stopped for homes that backed up to the potential church.  Potential buyers looked at a future church as a commercial albatross or something and were afraid to buy for FEAR values would go down after they buy it. 

In both of these subdivisions where the church went in, sales resumed immediately after buyers saw what was.  They feared what could be and shutoff, but once erected they could deal with what was.  

Remember back to Hurricane Charley in 2004?  Charley put SW Florida on the map, and many feared the bad publicity about hurricanes would mean nobody would buy here again.  I guess the old saying “There’s no such thing as bad publicity” is true, because people flocked here in droves looking for property in 2004.  In 2005 it seemed we had a hurricane every weekend somewhere in the vicinity, and it didn’t stop people from buying.  What ultimately doomed SW Florida real estate in 2005 wasn’t hurricane related at all, it was a man-made financial crisis.  The whole point I’m trying to illustrate is that what people feared didn’t hurt us at all, and in fact even the bad publicity seemed to help.  It drew attention to our area. 

The jury is still out on what will happen with the oil.  After a slow start, it appears that the government along with BP is pulling out all stops to break it up.  There’s a chance the oil could go some places and not others.  I am certain that local Chamber of Commerce departments are gearing up ad campaigns depending on what happens.  If the oil doesn’t come here, you could just imagine all the tourists who were supposed to visit Biloxi MS, Destin, etc. coming here instead.  And this scenario could play out up and down the coast depending on the oil. 

If the oil does come here, we know the government will employ a massive cleanup effort and things will look fine.  I worry more about the wildlife and the unseen effects more than waterfront prices and real estate.  I think our real estate will be just fine.  What may not be fine are businesses that rely on fishing and tourism in the short term. 

It is for this reason we must all join together and do whatever we can like they are doing now in Louisiana.  Let’s do what we can to protect our environment, our beaches, our seafood, and our way of life.  The more we do for our environment, the less effect it will have economically and politically.  Let’s turn this disaster into something positive.  Let’s increase regulations and add protections to minimize this happening again.  Too many people and wildlife depend on a clean environment. 

Real estate will be just fine.  If the oil comes, FEAR may affect us in the short term, but real estate will recover.  Let’s hope the same can be said for our environment and people who depend on clean waters.

It was bound to happen.  Back in 3^rd Qtr of 2005 we went on TV and said this market is getting ready to hit some bumps in the road.  We looked at the data and determined the Boom was over and it was simply a matter of time before the market reacted.  In reality we started noticing signs in the 2^nd Qtr of 2005, but everyone was busy rushing around trying to get their construction deals put together and finalized.  We began pulling our investors out of projects in early 2005.  We risked some commission dollars by doing so, but we just didn’t feel good about what was to come. 

We took a lot of heat back then.  We heard things like “You can’t stop this market, it’s on fire” and “It’s a runaway train” etc.  Most of us learned growing up that nothing goes up forever, but back then it was that herd mentality.  It was quite common to go to a cocktail party and hear stories of average people flipping home after home and making $100,000 per deal.  They were buying as many as they could, without a true end user in mind. 

SW Florida Real Estate Prices Single Family Homes

We all know what happened to those days.  Just as nothing goes up forever, nothing goes down forever either.  If you read these articles regularly you know we’ve been predicting that about March or April of 2010 we could see prices actually rise over year ago prices and the headlines we would read would be quite different than what we’ve seen over the past 5 years. Well, Official numbers were just released this past week, and guess what?  Prices are up 9% over last year.  It’s not a miracle.  If you’re unemotional and study the numbers you could see it coming. 

We’re not rocket scientists.  Most Realtors have a good pulse on the market and can tell you what’s really going on.  And just because the headlines read one thing, there can be many submarkets reacting quite differently or bucking the trend.  You’ve heard that all real estate is local, and that’s true.  Even in the Boom market some properties didn’t fare as well as others, and in the down market, some didn’t do as poorly either.  Full time Realtors are on the front lines and see trends as they develop.  Sometimes it’s beneficial to step back and analyze the numbers, and others it’s great to be right in the race and see what’s happening in real time.  Sometimes it’s great to do both. 

Where will the market go from here?  That’s a good question.  Some speculate that the Home Buyer Tax Credit Expiration April 30 will have a negative impact, but we’re not so sure in SW Florida.  Many of our buyers are scooping up bargains and don’t qualify for the credit anyway.  We think home sales should continue their torrid pace as long as we have bargain inventory.  2009 set an all-time record and 2010 sales have surpassed 2009 sales.  Our prices are artificially low, in many cases half or reproduction costs.  This is why you see so few building permits being pulled. 

Because we are not seeing building activity, it is limiting employment in our area, which was so heavily dependent on the building and real estate industries along with related services.  We don’t believe prices will shoot back up wildly until we create more jobs, and we may not create more building jobs until prices shoot back up.  So it’s the old chicken and the egg theory.  We think we’re going to have to find other employment opportunities to help lift our entire economy back up so we’re not so reliant on the building industry.  Once we do that, the building industry will take care of itself.  We would caution governments not to add impact fees and other costs that price jobs out of the market.  We need to be more competitive, not anti-competitive. 

And finally, resist the urge to follow the herd.  The herd is usually on right for a brief period of time, and usually at the tail end of the curve.  Our market is Hot, and prices rose last month.  We point out that even though the herd considers 2005 the Boom, there is more opportunity in the air now than there was in 2005.  Misery was in the air, just few people realized it back then, and today opportunity is in the air, and the herd will realize it only after prices rise substantially in a few years.

We’ve been talking quite a bit the past several weeks about HAFA (Home Affordable Foreclosure Alternatives) program and other programs designed to make selling a short sale easier.  Going forward, these programs should provide some much needed relief for many sellers, and open up the market for more buyers. 

We’ve noticed a trend this past year developing in the Lee County SW Florida real estate market.  As we’ve reported, sales numbers hit record levels in 2009, and prices look like they may have stabilized.  We’ve noticed that total distressed sales are down significantly since last May.  Our definition of a distressed sale in either a bank foreclosure where the banks sells the property on the open market after they’ve foreclosed, or a short sale by a seller hoping to avoid foreclosure and protect their credit. 

Distressed Sales in SW Florida

Fort Myers is showing the most strength with only 47.83% of sales being distressed in March 2010.  Compare that to Cape Coral at 62.0% and Lehigh Acres at 74.19% Lehigh Acres is down from the whopping 88.5% set last June, even though they have leveled off about 75% the past 4 months. 

Cape Coral has also declined, down from 78% last May to 62% now.  This chart explains why prices have stabilized in Fort Myers and Cape Coral, and why Lehigh Acres is a little shakier at the moment. 

Inventory levels are down in all three segments, and sales are up significantly over February in Fort Myers and Cape Coral, and up moderately in Lehigh Acres.  Officially sales numbers have not been released at the time this article was written, and we believe going forward we’ll see some median price increases in Lee County, and especially in Fort Myers and Cape Coral. 

We’re studying preliminary numbers, and we’re seeing an approximate 28% jump in sales over February numbers for single family homes.  There was an increase in distressed sales, but the majority of the increase was regular non-distressed sales, and this is encouraging going forward in 2010. 

We’ll be keeping our eye on the market after the home buyer tax credits expire on sales after April 30, and on interest rates which are creeping higher.  Nationally consumer confidence is rising, and eventually that should trickle into job growth.  SW Florida has been hit hard with high unemployment, and we really want to study these numbers as ultimately employment will be the engine that fuels SW Florida real estate prices in the future.

Always consult a CDPE (Certified Distressed Property Expert).

This is the age old question everyone asks.  How is the market doing?  Have we bottomed?  When will prices go back up?  When will my home be worth what I owe?  How long until we get back to 2005 prices?  Should I sell or rent? 

Actually we get more questions than this, like should I pay my mortgage, should I pay my homeowners association fees, etc.  We’ll stick with the value questions for this article. 

We’ve included a graph illustrating median prices since 2008.  Median prices don’t tell the whole story, but they do tell a story.  The definition of median price is half the sales are over and half under a certain price.  As you can see, prices have fallen sharply since January 2008, and even more dating back to 2005.  Ironically, home sales are up and setting records precisely because home prices have fallen.  We’ve explained this in depth in past articles. 

SW Florida Real Estate Prices Graph

Average sales prices were approximately $365,000 back in January 2008 vs the median price of $225,000.  We have been watching how the average and median price are related, and we have a chart in our annual State of the Market Report on Pg 4 that shows the relation over time between the two.  This report can be found at www.Topagent.com 

The average price gives us a little more depth to the market and helps us understand the overall breath of the market.  As we’ve been saying for quite some time, we expect higher priced foreclosures and short sales to actually pull the median price up, and we believe this will occur.  This past week official numbers were released, both statewide and nationwide.  Prices actually fell 3.3% vs. last month, and were down 9.74% from last year. 

Some might ask if we do all this research, when will our predictions come true.  Our best estimates have been we could see year over year price increases as soon as March or April data.  March data won’t be released until next month, but keep in mind these are only predictions about the future and nobody knows for certain.  We are fairly confident this will occur; the question is more of when. 

We have been looking at both median and mean average sales price data and it appears that prices for both dropped since December 2009 as official data would indicate, however were are seeing some price increases in March data that would indicate this trend has reversed, at least temporarily.  Keep in mind we have many more closings that occur at the end of a month that could skew the data, but the trend looks good. 

We would also expect sales this time of year to be higher as our Northern visitors are here and buying property as well, and many of these sales are in the higher than median price range.  Many of these sales will occur past March into April and May, and many will come back and buy in the summer. 

Ultimately prices will be determined by jobs and the economy.  As more people get back to work, it should slow the foreclosures, and bring more people to the area.  When will this occur?  I think it’s so much easier to forecast prices in the short term than predict the overall economy.  Congress has been focused on health care and the climate more than the economy, so it’s really hard to predict what’s coming out of Washington and how it will affect us and the economy, especially since we’ve largely been kept in the dark until something passes. 

We would encourage our government to turn its attention to actually helping the economy, or get out of the way so small business can begin creating jobs and getting us back on our feet.  Once the economy starts looking up, Main Street can begin to recover and prices can begin to rise.  Our prices are artificially low, and they won’t stay that way forever.  Prices are well below replacement cost, so builders are on the sidelines now as they don’t wish to build at a loss.  Our market will increase in value perhaps 40-50% before this occurs, and this is why buyers today have a chance at building substantial equity quickly. 

Once the dust settles and our market reaches price equilibrium, builders will be building again, bringing more jobs to the area and sustainable price appreciation.  Good times await those who buy now and ride the coaster on up to equilibrium.

Be sure to check our latest video on the Flood Insurance Crisis affecting home sales.

Search all SW Florida Single Family Home Bank Foreclosures

We’ve been compiling our annual State of the Market Report which will be released soon and this year more than any other some interesting trends are developing.  Full time agents tend to get caught up in the deals they’re working on and could miss some of the major trends developing in the overall market.  It is always so interesting to analyze the overall Lee County real estate market, and then dissect down to the smaller sub-markets and see what story the data conveys. 

This past week I asked several full time agents who work with a lot of buyers if they could tell me what they’re seeing on a day to day basis.  I then compared what they said with the data we’re compiling to see what they story is. 

A few themes developed from their stories.  The first theme is many buyers have heard Florida is on sale, so they come down here with unrealistic expectations about what they can buy.  Agents are receiving unrealistic requests for things like gulf front homes or condominiums 1 block from the beach with a garage, built in the 2000’s for $100,000 or less, or waterfront gulf access homes, 3 bedrooms, 2 baths, built in the 2000’s for $150,000 or less.  The stories go on and on.

Year End Prices 1993-2009

Many buyers want to look at bank foreclosures, but they don’t want to do any work if it needs repair.  They expect all homes should sell at the bank foreclosure prices regardless of whether they need work or not.  Many buyers feel the foreclosures set the prices in the neighborhood even though they may be missing a kitchen and needs tens of thousands in work.  Buyers are quite often dissatisfied with the condition of the distressed properties, but they don’t want to look at a regular home that is all fixed up because it is not a perceived bargain. 

You could take two identical homes next door to each other, one being a foreclosure and needing $15,000 in repairs and another being a normal sale and in excellent condition.  The bank foreclosure might be priced $15,000 below the normal home, but when the buyer sees it they’re turned off.  They’re also turned off by the price of the normal home because they feel it should be priced $15,000 lower.  Many times there is a reason a foreclosure is less money.  It takes money to fix them up, not to mention time and effort.  Not everybody wants to do that. 

Another theme is buyers have no idea homes are selling as quickly as they are.  Many buyers are looking around and because there is some inventory believe they have time.  Many are not motivated to pull the trigger because they believe that home, or one just like it will be on the market in 6 months or next year.  Buyers do not believe these homes are receiving multiple offers and being scooped up by investors who can actually cash flow them at these low prices. 

The emotional buyers are seeing fault with the homes and are afraid to buy.  The studious investor is beating the regular buyers to the punch because they know these homes will be selling for more in the future, and they can actually rent them out and make more return on their money than other investment vehicles.  These homes make financial sense to investors on both ends of the spectrum. 

The regular buyer is operating out of fear and lack of knowledge about the local market.  After they miss out on several properties to higher bidders it becomes apparent to them this market is much more active than they actually thought. 

The SW Florida real estate market is on sale, but it’s the old herd mentality buyers follow.  Buyers tend to be most motivated when everyone else is buying, usually at the height of the market.  It’s true in the stock market, and real estate market.  Back in 2004 and 2005 people couldn’t buy fast enough, sometimes buying groups of homes.  Would you say buying a home back in 2005 was a better investment than buying one in 2010?  And yet the motivations were higher back in 2005 because people weren’t afraid, when they should have been.  2010 is a far greater opportunity, and the people who study the market realize it. 

Later this week we hope to release our State of the Market Report at www.Topagent.com  so you can analyze what properties are selling the best right now, analyze where the inventory is, and what prices are doing on a monthly basis.  Being informed will help you make a better buying or selling decision.  It makes no sense to miss out on opportunities because of lack of local market knowledge just as it makes little sense to overpay, or list at the wrong price either.  If you list too high your property won’t sell, and if you list too low you’ll be giving equity away to someone else who is more informed than you.

We’re still analyzing data for our annual State of the Market Report which will be released soon.  It’s always interesting to pull the stats and look at the story the numbers tell us, without a preconception of what they should tell us.  Because we are in the business full-time and experience real estate on a day to day basis, it’s impossible not to have some assumptions about what the data may contain.  That’s probably normal and healthy, however we really try to step back and let the data tell the story. 

Let’s start out by telling you what’s involved in getting this data.  We pull data from two MLS’s, Sunshine MLS and the Realtor Association of Greater Fort Myers and the Beach.  Sunshine contains a lot of data for Bonita Springs, Estero, and some in San Carlos, while Greater Fort Myers primarily serves all of Lee County.  Companies and agents can belong to one or more MLS’s and enter listings and sold data into either, or both.  We find this data more useful and even more comprehensive than official numbers that are reported, but getting this data is cumbersome and time consuming.  After it is acquired, it must be scrubbed because there can be duplicates by agents who enter into both boards.  We also identified a few listings that were reported as closed but never recorded with the county, so we discard that sale.  It’s also amazing to see how listings can be two different prices in the various MLS’s, so we check those against official public records.  When we’re done, we believe we have the most tight and comprehensive data available. 

Each year we publish the annual State of the Market Report.  We try to deliver this in an easy to understand format and explain what is really happening in the market.  We cannot publish all the data as it would be too large and not understandable, so we break it down to make it easy to read and informative. 

We’re not done analyzing this data, but we can report a few facts that stand out.  If you read this article on a regular basis, you know that we’ve been reporting sales are at record levels and many are selling at or above full price.  We know this from our personal experience, but we were astonished to learn how prevalent this is statistically.  In 2009, 8,051 homes sold at or above Full Price. That is almost 48% of all homes sold in MLS selling at full price or better, which is simply mind boggling. 

Lee County Florida Distressed Sales Chart

The reason homes are selling at full price or more is because so many are distressed sales, a new phenomenon to SW Florida in the last few years.  In fact, in December of 2009, 63.78% of all home sales in Lee County were distressed sales.  We’ve added a chart that shows the percentages of distressed sales for the last 3 months by area.  As you can see, Lehigh Acres leads the way in distressed sales followed by Cape Coral, then Fort Myers.  Distressed sales percentages are falling, which is good news. 

Each month you hear that home prices are down vs. last year.  We believe that is about to change.  Soon you may start hearing that prices are up over last year.  Prices fell somewhat in 2009 but began rising the 2^nd half of the year and are close to where they were at the beginning of 2009.  Barring unforeseen circumstances, headlines should read price gains going forward. 

Banks tell us to get ready for more rounds of foreclosures coming to the market.  How many remains to be seen, but the banks we deal with directly say they are coming.  The good news is our market to date has proved its ability to absorb this inventory.  If it’s a deal, the market is ready.  What happens when distressed inventory dries up and it’s no longer a deal?  Stay tuned and watch for the annual State of the Market Report which will be released soon at www.topagent.com which may help answer some of these questions.

Final year end official stats are in and as expected, 2009 set all kinds of records.  Every single quarter of 2009 was a transaction record, so it’s no surprise that the entire year set a transaction record as well.  2009 saw 16,260 single family home sales compared to 8,272 last year for a whopping 97% increase over last year.  2005 saw 12,123 home sales, so 2009 eclipsed that lofty mark as well, but this time it was done in a more healthy way, if you can believe that. 

Lee County Single Family Home Sales by Qtr

2005 sales were fueled by regular home sales and builder sales from previous years that took until 2005 to complete and close.  We’re not seeing any builder sales, pent-up or otherwise because today’s home prices are well below replacement cost, so builders cannot afford to build today as they would lose money on each deal.  So what’s different about 2009 vs. 2005? 

The main thing is housing affordability.  At the height of the market single family home prices were about $322,000 and now they’re at $94,500.  This makes it much more affordable for families that still have jobs.  Obviously if you’ve been affected by the economy and a job loss, almost any mortgage payment is too much, so when we mention affordability we’re speaking to people who are blessed with a job.  We also have low interest rates which positively affect affordability. 

Property taxes are lower which greatly reduces the monthly payment as well, further adding to affordability.  We still have a home buyer tax credit which is up to $8,000 for first time home buyers and $6,500 for existing buyers.  Nationwide December sales slumped because Congress waited until end of November to extend and expand this credit, but we expect sales nationwide to pick up again.  Locally sales were up 40% over 2008, so the tax credit expiration didn’t affect us much as everyone is trying to get in on these rock bottom prices. 

First time home buyers are in steep competition with investors for the best buys as well.  For years we would tell investors property in SW Florida just won’t cash flow unless you put a bunch down.  This isn’t true anymore, so investors are coming in and scooping up these artificially low values and either renting them out for a positive cash flow or flipping them for a generous profit. Cash flow is the rent or income earned minus expenses, like debt service, property taxes, repairs, vacancy and collection losses, etc. In preparation for our annual State of the Market Report I started flagging several home sales that were flipped in 2009, sometimes a few times. 

Today’s prices are too low, especially at the bottom end of the market, and 2009 saw 5 of the last 6 months with rising median prices.  We hear from our sources that there are more foreclosures on the way.  Banks study default rates and can predict how many will foreclose in the future; because once a homeowner gets behind, statistically they don’t catch up very often.  While the worst may be behind us, we believe we may have more to go.  This fact and the job market should keep prices relatively stable until the economy turns around.  We may see escalating prices going forward, and if so it will be because we are undervalued on a cash flow basis no matter what the job market is, but we believe true price appreciation will occur once the job market stabilizes. 

The commercial market is currently experiencing an adjustment similar to what the residential market has gone through in years past, as commercial tends to lag residential.  This could put pressure on some banks, so 2010 may be a year to watch the banking sector for mounting losses on the commercial side.  In the next few weeks we’ll have detailed analysis in out State of the Market report.  You can view last year’s report at www.Topagent.com in the Housing Statistics section.  We have additional graphs you can view there as well. We’ll be unveiling this year’s report online and on The Future of Real Estate show broadcast also on the website. 

Sales are off to a boom in 2010 with many sales contracts happening right now, so 2010 will be another fun year to track.

Each January everyone seems to ask what the new year will bring to the SW Florida real estate market.  While nobody has a crystal ball, experience and detailed analysis lends clues to what the future may hold.  Each year we release our annual State of the Market Report, which consists of the most detailed and current market stats around combined with our 20+ years of experience in the local real estate market. 

We pull these stats in January after agents have a chance to enter all their year-end transactions.  We pull from a variety of MLS databases then merge the data together and eliminate duplication of data.  Some listings are input and marketed to Realtors in multiple Boards, and we want the most current but accurate data free of duplication.  This all takes time, and then the real analysis can begin. 

Single Family Home Inventory in Fort Myers-Cape Coral Florida

Fortunately we do provide a significant amount of data all year round to our readers and viewers of the weekly Future of Real Estate Video Show, so we can offer some preliminary data combined with experience and make some educated guesses as to what 2010 might bring. 

As you can see from the attached graph, listing inventory has been rising recently, and pending sales have started to fall again.  We think this may be due to the anticipated expiration of the home buyer tax credit at the end of last November, but that has recently been extended and expanded into 2010.  Not only can first time home buyers take advantage of this credit up to $8,000, now people who currently own a home and plan to but a new primary residence can also take advantage up to $6,500.  Contracts must be in place by April 30, 2010 and must close by July 3, 2010. 

Add to this that our Northern friends are now here, and they are searching for homes.  Word has gotten around up North that Florida is on sale, and prices have begun to rise in some sectors, especially the bargain buys.  The Snow Birds realize 2010 may be the last “Season” to get these bargain basement prices, so they’re bringing their checkbooks looking to purchase.  We wouldn’t be surprised to see pending sales rise in the next few months and inventory to fall again as Northerners help scoop up even more of our inventory.  Investors have been hard at work in 2009 competing with first time home buyers, and we believe Northerners will be buying 2^nd homes that they may one day move into, or vacation to at the least. 

The US Treasury Department has just issued new short sale guidelines which may make it easier to get short sales through for primary homeowners who are in trouble.  This may help add sellable homes to the market, which could help increase sales and relieve some of the strain on foreclosures. 

Speaking of foreclosures, we believe much of the entry level speculation inventory is now gone, and we expect higher priced inventory to enter the market, which will make 2^nd homes and move-up homes more attractive.  As this occurs, look for more sales in the higher than median price range, which currently stands around $95,000.  These new bargains at the higher price levels will help raise the median sale price. 

Speaking of sales prices, we’ve seen 5 straight months of median price gains, and we look for that to continue.  In fact, early on in 2010 we may start to see year over year price gains, something we haven’t seen in about 4 years.  In other words, February or March of 2010 may see higher prices than February or March of 2009.  We can’t state the actual month it will occur, however if you study the graphs and data you can see that day looks like it’s coming fairly soon. 

Tune in to our weekly video show “The Future of Real Estate” at www.Topagent.com and stay tuned for our upcoming State of the Market Report which we’ll be releasing soon which will detail which areas of the county are moving, changes in averages sales prices, single family homes and condo data, and so much more.  We’ll even break it down by zip code and graph it out so you can see how your area is doing, and what the future may hold.  Stay tuned.

It’s official.  Last week we predicted a surge of at least 125% +/- based on the sales we were studying for single family homes in Lee County.  Official numbers were just posted, and it looks like it was on the + side of our prediction.  Sales came in at 133% over last year’s numbers for single family homes, and prices were up a healthy 3.82% over last month, marking the 5^th straight monthly gain.  Median single family sales prices now stand at $95,100, up from a recent low of $87,900 set back in June.  As you can see, the market has turned around since June and has steadily increased in price, and has set records in sales volume as well. 

This isn’t news to News Press readers or listeners of the Future of Real Estate Radio Show, nor to agents active in the business.  For months agents have been telling buyers the market is one the move, and the time to buy is now, and buyers for the most part have gotten the message.  It’s always fun when an out of the area buyer comes down and wants to make offers 20% below asking price because that’s what you do someplace else.  Buyers seek the assistance of an agent and it is the agent’s responsibility to educate buyers and sellers to actual market conditions. 

Fort Myers-Cape Coral Single Family Home Sales by Month

Most agents I speak with do a very good job at this.  When you need an attorney typically you let them represent you and you follow their advice.  Same goes with a doctor, typically you tell the doctor how you’re feeling and answer the questions and the doctor makes a recommendation for you based upon your needs.  So why would an agent not offer the same advice to an out of town buyer or seller? 

Like I said, most agents do.  Many times we’ll receive multiple offers on a property, and most are at or above asking price, especially when the property is a good buy.  Occasionally I’ll receive one that is 10-20% below asking price when I’m sitting with other offers above asking price.  I’ll ask the agent working with the buyer what was it that caused the buyer to offer at that price.  Sometimes we’ll get that’s all they’re qualified for, or that’s all they want to go or feel it is worth.  Sometimes the agent replies the buyer just wants to buy it as cheap as they can.  Who wouldn’t want to buy it as cheap as they can, but the buyer’s got to get in the game to buy it at all. 

We’ve told people before, if you’re going to steal, don’t do it in slow motion.  If you’re looking at a bank owned bargain, and it’s a steal, go get it.  Chances are others are looking for the same thing.  SW Florida is experiencing record sales right now, and if it’s a bargain, you know there will be multiple offers.  Why try to get an additional 10-20% off when it’s already a bargain? 

I then ask the agent why they haven’t told their buyer about the market, right after I inform them we have multiple offers.  Sometimes I hear “I know, I know, I’ve tried to tell them but they won’t listen.”  Other times I hear I don’t want them to work with another agent, so I just do what they tell me.  Both instances are signs of lack of confidence in the agent. 

It’s truly an agent’s job to educate.  Buyers and sellers will thank you for it, because if you don’t do it, you’re just wasting their time and yours.  After losing out on about 7 offers, buyers become frustrated.  Agents become frustrated with buyers after about 2-3 offers if the buyer isn’t listening.  So why not just cut to the chase and end it upfront.  I know, there will always be another agent who will do what the client says, but if the client won’t listen to you, can you really help them? 

It’s one thing to work with a buyer who is doing everything they can to buy a home.  We have customers putting in offers above full price at the max of what they can afford and still losing out.  That’s quite different than a buyer who is low balling out of ignorance. 

Buyers and sellers should listen to their agent, and agents shouldn’t be afraid to counsel and give the cold hard truth to their customers.  Market forces eventually win out in the end anyway, so getting there as quickly as possible is the best way to avoid frustrations, and get you in your first choice property instead of your 8^th choice.  In a stagnant market your choices don’t change often, but this market is anything but stagnant and the market is on the move.

It pays to study the market and get ahead of the market.  Sellers never want to chase the market down, and buyers hate to chase it up.  2010 will be an interesting year.  It’s always fun to cover a changing story, and this story is changing.  If you’re not buying or selling, it will be fun to watch.  If you are buying or selling, it’s time to do your homework.