Fort Myers and Cape Coral listing inventory down 9.2% in the latest data released by Florida Realtors.  To be fair, this data includes more than just Fort Myers and Cape Coral.  It includes single family homes in all of Lee County, but since Fort Myers and Cape Coral are the two largest cities, that’s how the headline reads.

Fort Myers and Cape Coral Listing Inventory DownFort Myers and Cape Coral Listing Inventory Down Total Inventory Down

If new listings are up 6.1% over last year, you might be asking how listing inventory is down 9.2%.  New listings have been up for several months in a row now.  The answer is while new listings are up, new pending sales are up 10.2% in April and 17.7% in March.

Fort Myers and Cape Coral Listing Inventory Down

New listings are hitting the market, but demand is soaking them up before they can linger on the market.  This tells us that demand is out-pacing supply.  Agents complain that there just isn’t enough inventory and they’re correct.  We have inventory, it’s just that it’s not enough for the demand.

As you can tell we’re into graphs as they tell a story visually that sometimes gets lost in the raw numbers.  Of course, we only have so much room in the article or we’d fill it with all graphs and no explanation.

Buyers have been into our office desperate to find homes in their price range.  One way buyers can find out about new listings that hit the market is to search online.  Our website has a feature whereby if you login and save your search the system will email you listings that match your criteria.  You can save the listings that interest you, but the best part is when a new listing hits the market that matches your criteria the system will notify you.

Buyers love being notified when new properties hit the market.  They get a leg up on the competition.  Unlike some of the national websites, our information includes all the listings that brokers share with each other and its updated daily.  Some of these national websites have old data or not all brokers participate.  Remember, it’s the individual brokers who decide where the listing data is displayed, not these national companies.

This is probably why buyers get upset when they find properties online only to find out it’s been off the market for awhile.  That is frustrating.  These national websites come in and spend a ton of money online promoting their websites so it’s hard for buyers to know which sites are the best ones to search on.  They typically search whoever is listed at the top of Google or Bing not knowing that website may not have accurate or timely data.

I’ve been seeing new national websites popping up weekly now.  All they are trying to do is scrape data from the MLS or wherever they can get it, attract buyers through online advertising, and then sell ads to brokers.  Why not go straight to the source and get the best data directly from a broker?

Sellers like our website too because they can find the value of their home through our home valuation tool.  Sellers too can be on the lookout for new listings because many times they want to find a property to buy before they decide to sell.  Having a local broker who knows the market is gold versus a website that sends your lead out to multiple agents who may or may not be active in your market.

With tight inventory buyers need every advantage they can get.  They’re not competing with the sellers as much as they are against other buyers who want the same property.  Give yourself the extra advantage and call the Ellis Team at RE/MAX Realty Group 239-489-4042 or visit our website at www.Topagent.com
SW Florida Real Estate Market Update

A few weeks ago we did a story called “Riding Low” about real estate listing inventory falling is SW Florida. We had May data to work with and at that time listings were lower than they were all last year and we speculated based upon pending sales they would most likely go lower when June data was released.

Listing Inventory in Southwest Florida Down

Well, June data was just released and indeed listing inventory fell again to its lowest level in quite awhile. Last year agents from Cape Coral to Fort Myers to Bonita Springs to Naples were all complaining about lack of inventory. It is putting pressure on buyers in 3 ways.

Prices are going up rapidly. Median prices are up about 30% over last year. This doesn’t mean all homes are up in price as some ranges have lots more inventory than others. Buyers today are being squeezed by rising prices, that’s for sure.

Secondly, interest rates are going up and this is causing the cost of ownership to rise. It’s a double whammy. Prices are going up and so is the cost to finance. Throw in some insurance rate increases and even a tax millage increase and you’ll see that some buyers are quickly being priced out of the market.

Lastly, when there is a shortage of homes on the market buyers are in fierce competition with other buyers. It’s very frustrating to look at homes and select a favorite only to find out the seller just accepted another offer, or worse is in a multiple offer situation and a bidding war ensues.

We just listed a short sale that had interest from several buyers because it has been kept up very well. We had to wait 5 day including a weekend because the seller’s loan was a FNMA loan and they now require a waiting period before signing contracts. We did that and a few buyers were very disappointed. We see this quite frequently on our listings and our buyer agents deal with this on a daily basis with our buyers.

This is the market we are given. It does no good to complain, although complaining sometimes makes us feel better. The best solution to having success in a market like this is accepting the market we’re given and educating our customers on how to succeed in this market.

Setting reasonable expectations upfront means educating our customers with facts, data, and logic. Facts help overcome emotional objections and get us in the mindset to make an informed and intelligent decision rather than a seat of the pants knee jerk reaction.

Women might appreciate and notice that they’re male significant other will study their fantasy football team until the cows come home but when it comes to using that same diligence on studying the housing market the motivation isn’t there. Some people are into fantasy football and some people are into studying the market, and neither way is right or wrong. I’m just saying as a buyer or seller it pays to either study the market as if you want to win your league or hire someone who knows.

Buyers and sellers who try to go it alone sometimes make some costly mistakes. Real estate is a complex transaction. Pricing is just one component. Taxing, deed restrictions, title, survey, financing, transfer protocols, HOA and condo associations all play into things you need to know about, and this is just the tip of the iceberg.

If you’ve got questions on buying or selling real estate in SW Florida, don’t hesitate to call someone who can guide you. If you’d like to search the MLS and have a look around, feel free to do so on our website www.Topagent.com If you’d like to get a valuation on your property go to www.SWFLhomevalues.com

Feel free to view our Virtual Tours as well.

Good luck and Happy Buying/Selling!!! Listing Inventory in Southwest Florida Down.

Visit our Google+ Business Page

 

Last week the News Press ran a story about the rebounding housing market and they used inventory stats that said the single family inventory is down to 13,897 in Lee County, down from 14,113 the month prior. The only problem is, they were looking at the chart wrong as those were cumulative inventory numbers, not current.

Housing Numbers Becoming More Reliable
SW Florida Housing Inventory

It was an easy enough mistake if you don’t study those numbers on a regular basis. The chart should have quoted 3,579 single family homes on the market, but even that number isn’t the best number, and we’ll explain why.

I sit on the MLS stats committee and for the last year or so we’ve been working hard on cleaning up the data and defining how listings should be classified to best reflect what’s actually happening in the market. Look for inventory levels to increase because of this change.

In the past inventory numbers only reflected Active listings that were not Active Contingent Short Sale. In other words, agents were still taking offers to present to the bank or as backups until the banks accepted a short sale offer but it wasn’t being counted. At the point a bank accepts a short sale offer the property was to be placed pending, like a normal sale would be.

A high degree of pending sales actually close, but the same cannot always be said for Active Contingent sales, especially short sales. Another reasons aside from being a short sale a property could be listed as Active Contingent would be if something else has to happen first, like a buyer selling another property before they can close.

In this case a listing agent may mark the property Active Contingent and insert a Right of First Refusal clause and continue to market the property. To me, this property is still an active listing and should be counted in inventory. From now on it will.

It’s easy to count and search for sold properties in MLS, but it’s much harder to go back and search for active listings from the past on a certain date unless you have frozen copies of the database. Because of this, the Board of Realtors cannot post what the active listings would have been under the new guidelines since they weren’t searched that way at the time.

Some on the committee pondered whether it would be easier to just keep the status quo since we didn’t have that data. Most of us preferred to rectify and make the most accurate possible, even if it meant postponing the revisions to past inventory levels until we have a new baseline to present. Everyone on the committee concurred once the tough decision was made to make it right, even if it would cause some heartache and confusion for a few months.

Personally I’d rather take the tough steps now to get the most accurate statistics to agents and the general public, and the committee and the Board agreed.

Housing Numbers Becoming More Reliable

I feel much more confident going forward with the data that will be provided. All the definitions will be posted and any agent should be able to duplicate the data, something that wasn’t possible in the past. This will provide for full transparency and credible data, and should eliminate various sources from having differing standards and definitions.

While mistakes in the newspaper or anywhere else will always be possible, hopefully we’ve made some changes that will eliminate systemic errors. We still have the issue of various boards reporting separate data which can cause duplication in areas served by two nearby MLS’s, we can account for this within a consistent statistical deviation.

It really depends on whether the press is quoting one board or multiple boards as the source for their data, as some listing may appear in one board and not the other, and some appear in both.

I feel very confident in the new definitions presented by the Florida Gulf Coast MLS which will begin to take affect soon. In the meantime, we’ll continue to report the stats and inform you where we believe the numbers will change. Inventory numbers are low but will increase under the new guidelines.

We’ll talk about some of the new formulas in future articles that better reflect the SW Florida real estate market.

Good luck and Happy House Hunting!

Our predictions are beginning to sound like a broken record, but they’re not really predictions at all as anybody who can view a chart can easily see what’s going on, and until something changes the trend may continue.

Fort Myers Cape Coral Florida Sale Prices Rise
SW Florida Real Estate Prices on the Rise

It’s been said if you put 10 economists in a room you’ll get 10 different opinions. I think it’s easy to see we have a supply and demand situation whereby the market is eating up more homes than are coming to the market. For instance, in April 868 homes came on the market while 1,097 sold. Additionally, some homes expire or get foreclosed upon and don’t re-enter the market in a timely fashion, so this impacts the numbers even more.

As you can see by the attached charts, inventory has been going down since January of this year, and is down significantly since January 2011. In fact single family home listing inventory is a mere 55% of what it was back in January of 2011.

Median single family home prices were $88,500 in January of 2011 and today they stand at $132,000, up 49.15% in just less than a year and a half. Prices are up 6.97% since January 2012.

Listing Inventory Falling in Fort Myers, Cape Coral Florida Market

Buyers are increasingly panicking when buying property as they’re often in multiple offer situations. It forces them to carefully consider how important the home is to them. Quite often it depends on how long they’ve been in the home buying process as reality tends to set in after several failed attempts to purchase their home.

Buyers typically look at several homes then rank them in terms of desirability. Quite often a buyer will make an offer on their #1 choice. If they miss out, they may move on to their #2 choice. Some buyers wait for another like kind home to enter the market, but their hope turns to disappointment when that homes doesn’t appear, or if it does it’s priced significantly higher than the one they lost out on.

This whole scenario sets up an unrealistic expectation that future homes will meet their #1 choice criteria in terms of desirability and price but the reality is the next home may be less desirable and more costly in a rising market with limited inventory.

After the buyer loses out on 4-5 homes that reality tends to hit and they reset their expectations. It’s an uncomfortable process and one that each buyer addresses in their own way and in their own time frame. They can fight the market and live in denial and prolong the process and possibly never buy a home, or they can accept the market, educate themselves, and win their 1st choice, or hopefully their 2nd choice.

Sellers go through the same scenario in a buyers market. A seller may require a certain price or terms only to be left at the altar by buyers who liked their home but found a better offer from another home. It really doesn’t matter if the buyer or seller likes the market we’re in. The market just is what it is, and if they want to accomplish their goal it pays to learn the market sooner rather than later. In each case lack of knowledge can cost the buyer or seller significantly in price, desirability, and peace of mind. It pays to work with a professional that can educate you on your options.

Good luck, and Happy House Hunting! We at the Ellis Team at RE/MAX are here to help if you need us.

We like to include charts to illustrate latest trends in the SW Florida real estate market.  For years we’ve tracked numbers and reported the upside and the downward trends in the market.  For the past year or more all market trends have been to the upside.  Preliminary numbers gathered by the Ellis Team indicate single family home listing inventory in Lee County went up for the first time since January 2011.  Granted, back in January single family home inventory was 34.54% higher than it is today, but this past month is the first time we’ve seen inventory rise in months.

SW Florida Single Family Home Sales
SW Florida Single Family Home Sales

Listing inventory only rose 43 units which accounts for about .5%, so it’s not an alarming trend, just a slight change in direction we’ll keep our eye on.  Due to space constraints we didn’t include that chart; however we’d like to draw your attention to the SW Florida Sales Chart and the Pending Sales Chart.  Both these charts support findings in the inventory levels.

Sales in SW Florida have been falling since March which isn’t out of the ordinary the past several years.  What’s interesting is that September 2011 sales are slightly behind 2010 levels, but not by much.  Again, it’s the direction of the change, not the actual numbers we’re looking at.

Pending home sales Fort Myers Cape Coral Lee County Floirda
SW Florida Pending Home Sales

Pending sales have also fallen since March.  This confirms that pending sales are an accurate indicator of future closings.  While it makes perfect sense, sometimes in life what appears to make sense doesn’t always match reality, but in this case it does match. For months inventory levels have gone down and many have speculated that’s the cause of decreased sales.  We think there is a lot of truth in that.

Listing inventory just went up this past month, so does that mean sales will go up?  When official numbers are released next week we don’t think so.  We think they’ll mirror what we’ve been reporting and will be down slightly from the previous month.  So if inventory has been a legitimate reason sales have fallen, why wouldn’t the increase signify increasing sales going forward?

The answer is it could, but there are other factors.  We must look at the mix of inventory as well as other factors.  The mix refers to traditional sales versus foreclosed homes and short sales.  Not all short sales close, and their timing is anything but predictable.  Foreclosure inventory looks to rise some in the 4th qtr of this year and more in the 1st qtr of next year.  If this bears out, sales will almost assuredly be influenced by the exact number hitting the market as there is a large appetite for foreclosed bargains.

Other wild cards influencing the market are the availability of credit. Banks are requiring buyers to jump through more hoops and regulations than ever. The new Dodd Frank Act is making it more difficult to close even approved loans.  Regulations have become burdensome and making it impossible to meet certain deadlines.  We always say time is of the essence in our contracts, but that’s not the case as Congress has changed so many regulations for the worse.

There are waiting periods for HUD closings statements to be approved, so if there is any little change, all prorations of fees may need to be re-approved. If a buyer selects a different rate or program, the bank must re-disclose everything and a new waiting period begins.  This makes it difficult to meet certain deadlines in short sales, and many times that property is foreclosed instead of a successful sale because Congress saw fit to add additional layers and slow everything down.

Congress always has good intentions, but they don’t use their head.  Loans take hours to underwrite now and certain loans banks don’t even want to mess with because of the new regulations.  This hurts certain segments of the market.  I hear almost everyday complaints from loan officers on how tough their industry is.  Of course, lending affects our industry, and real estate affects the economy.  Sometimes I wish Washington DC would listen to people in business and get out of the way.  We’d all be better off if they regulated less and let business do business.  That’s the way to create tax revenues.

While we can’t control Washington, we can keep our eye on Main Street.  Main Street is ok in SW Florida, and we’ll continue to monitor.  One month doesn’t make a trend.  We’re simply reporting a slight change in direction, and we’ll watch the trends going forward to see what sticks.  If we can help you with your real estate needs, don’t hesitate to call 239-489-4042 or visit our website www.Topagent.com

 

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
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 2nd 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 2nd 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.