It’s Labor Day weekend which brings lots of visitors to our area for the long weekend. Some return to our area for relaxation and fun and others are new.  Many visitors fall in love with SW Florida and get the itch to buy.  Here are 5 things a buyer should know about our current market. 5 Things a Buyer Should Know About Lee County Real Estate.

5 Things a Buyer Should Know About Lee County Real Estate

1.  SW Florida is a Desirable Place to Live and Work:  In fact large companies like Hertz and Alta Resources are moving their headquarters to SW Florida because it’s an easy sell to employees or future employees.  Not every employee can or will relocate, so companies have to ask is the destination attractive to future employees.  Invariably the answer is Yes to our area.

2.  Prices Have Risen From Their Undervalued Lows:  Back in 2008-2009 SW Florida was littered with foreclosures due to the excess of the mid 2000’s  SW Florida was overbuilt and the flipping frenzy ran out.  Buyers contact us today hoping to buy at 2008 prices.  Some still believe our market has not changed in last 4-5 years and they can buy at those undervalued prices.  That’s just not true.

3. Listing Inventory is Down: Inventory has been falling. January single family home inventory stood at 6,215.  Today it’s down to 4,924 and has been falling every month.  It’s common to receive multiple offers on a property if it’s priced correctly.  Buyers are surprised there may only be 1-4 homes that match their criteria on the market.

4.  Interest Rates Are Rising:  We saw a big jump back in May, over 1% jump in about 5 weeks.  Every 1% jump takes away 9% buyers purchasing power.  That rate swing back in May means a buyer that could afford a $200,000 mortgage before the increase could only afford a $180,000 mortgage after the swing.  Buyer’s purchasing power is going down, and this wouldn’t be the end of the world if prices were falling, but see Point #2.  Prices are rising, not falling.  To make matters worse, we expect rates to go up even further.  The Feds have been keeping rates down with stimulus by buying.  The Fed has indicated they will scale back buying treasuries at some point and this has caused the bond market to react.  We know it’s coming, and some speculate it could happen as early as this September.  When it happens, rates will eventually go up.  If you’re on the fence, waiting to buy will absolutely cost you, even if prices stayed the same.

5.  Educate Yourself on the Market:  It does no good to read articles from 3 years ago on what was going on in the market.  It also does no good to read about one market in the country and expect everywhere you visit conditions are the same.  If you’re new to the area, or even if you’ve lived here awhile, it pays to get the latest data and analysis.  When we go out to a home to do a CMA (Comparative Market Analysis) we have to update ourselves with the latest information.  Even if we sold 15 homes in that subdivision last year it doesn’t help figure out today’s prices.  We arm ourselves with data on each listing appointment.  Why wouldn’t a buyer want the same information when purchasing?

Feel free to visit Topagent.com  You’ll have access to our Future of Real Estate Show where we update you on the market via video and explain the latest charts and graphs.  Or you can read our Blog at http;//blog.topagent.com  Feel free to search the MLS like an agent at Topagent.com, or visit our virtual tours.

If you need help or would like to talk to a professional, we’re here to help 239-489-4042  Good luck and Happy Buying/Selling!!!

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We recently experimented with shooting our TV show in High Def.  Previously we’ve used a mixing board much like a TV studio whereby we can mix camera shots, video graphics, etc, but it was standard definition TV.  Because we have a high definition TV we use anyway, and we shoot the show with High Def cameras, we though it would be nice to make everything more clear and understandable.

Future of Real Estate Video Show SW Florida Goes High Defintion
SW Florida Real Estate Market Update Video September 2010

Future of Real Estate Video Show SW Florida Goes High Defintion

Instead of having one track mixed in from a mixing board along with audio, we’ve gone to mixing each camera track and audio track and syncronizing them.  The reason I spell all this out is because agents all over the country have asked how we produce our show, and now that we’re making the change I thought I’d spell it out.  We then mix all the tracks together and produce one output and export.

Next week we’ll work on shooting the video so everything is in screen properly, or we’ll add another camera.  Let us know if you like the new changes.  View the latest show SW Florida Real Estate Market Update This week’s show covers pending home sales in Cape Coral Florida, Fort Myers, Bonita Springs, Estero, and Lehigh Acres.  We also cover inventory levels in Cape Coral, Fort Myers, and all of Lee County as we’ve seen varying reports of inventory levels reported lately.

A few years ago we reported that listing agents were listing homes at ridiculously low prices to create buying interest simply because the home was being sold as a short sale.  This is a bad practice for several reasons, and yet we’re seeing it continue today. 

Misleading Short Sales Distort Actual Values
Misleading Values in SW Florida Real Estate

This past week I noticed two different homes, each located in a different subdivision, listed at far below actual values.  This can cause many problems we’ll outline now. 

The bank is not likely to accept a short sale on either of these homes.  The bank will learn the actual value by ordering a BPO (Broker Price Opinion) or a bank appraisal.  Once they determine the home is worth much more, typically they just kill the sale.  Many owners and agents mistakenly believe that banks typically counter, but this isn’t normally true, especially when the offer is far below value.  There also can be more than one lien holder involved, and both look into value, and either one can kill the sale. 

If the banks were to accept such a deal, it creates a potential tax event or larger deficiency judgment against the seller.  The bank could also ask for a promissory note against the seller, and that note would be significantly larger due to the under valued sale. 

Even though the deal is not likely to be accepted, it also hurts the market in two other ways.  Buyers mistakenly believe that artificial number is the new market, because they saw a home for sale for X amount of dollars, even though it has no chance of selling.  Some buyers act quickly to tie it up, then wait months to find out the answer is No.  All the while, some good bargains have come and passed and they’ve missed out.  They may not have been the Steal they thought they were getting, but they were good bargains and suited their needs. 

In addition to the misperception buyers have, banks must also make decisions on how to price foreclosure inventory.  They do look at sold comparables, but they also look at what is on the market.  If they’re not careful, they’ll notice a particularly low priced sale and price theirs too low, which has a domino effect on future foreclosure properties, and it snowballs from there. 

The artificially low listing can influence future sales if people aren’t paying attention.  The foreclosure process is far from perfect, and people from other states typically make decisions about local property, so there is no need to give them false ammunition for fear they may shoot themselves in the foot with it.  When they do this, it hurts the entire market. 

The market will go up and down as conditions dictate, but it need not move in a direction due to false hopes and misinformation.  Sellers need to do a better job interviewing agents, and agents need to insure they know the local market, understand the short sale process, offer advice commensurate with what market conditions dictate.  This can be challenging I know in a changing market, but we see False Listings everyday and it doesn’t help anyone. 

The seller is let down when the bank rejects and it goes to foreclosure, the bank wastes time investigating a False Listing, and the buyer mistakenly believes they’ll end up the proud owner of a steal; all the while great bargains pass them by in the process.  And the market is let down by false and misleading listings that really shouldn’t be on the market.

If you missed last week’s Future of Real Estate Show, you can tune in now.  We interview Lee County Sheriff Mike Scott and ask him tough questions about Florida’s and Arizona’s immigration law and how that affect what he does.  Additionally we ask him his views on controversial red light cameras, the upcoming tight budget process, school resource officers, the jail, traffic stops, and much more.