Internal numbers produced by the Ellis Team at Keller Williams Realty shows the local housing market has improved once again. It’s a seller’s market in SW Florida, and it just got slightly stronger the past few months.
Most experts agree, a balanced market is about 5.5 months of supply. Currently Lee County stands at 4.33 months’ supply. It was 4.37 months’ supply back in August. We can safely say we’re in a seller’s market, but there’s more to the story.
It’s a Seller’s Market
Just because it’s a seller’s market doesn’t mean the entire market is. We have market segments. We could segment the market by neighborhood, by waterfront, golf course, total cost of ownership, or several other segments. Today we’ve picked the price range segment.
By and large, the higher the price, the more supply we have. If you own a million dollar plus property, chances are it could take you awhile to sell your home. If no other homes came on the market, it would take approximately 15 months to sell all the homes over $1 million. We know not all will sell, because inventory never gets to zero.
There will always be sellers that overprice their home relative to the market. There will always be homes that the market rejects due to condition, location, costs, liens, title issues, etc. In the end, it usually comes down to price.
We could have done a segment on total cost of ownership. This is when you add up taxes, HOA fees, mandatory club fees, etc. Anything that must be paid each year is included. Our team routinely gets calls for inexpensive condos in the $45,000-60,000 price range in a certain golf community that’s listed by other realty companies. Buyers love the low price and the fact that it’s located in a prestigious golf course community. However, when they find out the yearly condo fees, HOA fees, golf fees, and mandatory club spending exceeds $22,000 and there is a $50,000 one-time buy-in, they begin to realize this inexpensive condo is out of their price range. In fact, the annual total cost of ownership is holding back the value because it’s so costly to hold the property.
This is one reason why time-shares are hard to sell, and many times go down in value. The annual maintenance costs can exceed $1,000 for a week. Multiply that by 52 weeks and you begin to realize somebody is making some money off those time shares, and it’s not the owners.
Keep in mind, anytime you mandate higher cost of ownership, you can limit the price. Of course, amenities come with a price, and certain buyers demand certain amenities and they’re willing to pay for them.
Property taxes are another consideration. Some buyers will pay more for a home in the county than in the city because taxes are lower in the county. Some new home builders build in multiple locations. They justify their higher price in one community over another community they build in on taxes alone.
This is why people are flocking to Florida. Taxes in Florida are lower than high tax states like Illinois, New York, New Jersey, and others. Not only are property taxes higher up North, but they also have a state income tax. We now have a $10,000 limit on local state and property tax deductions. It’s easy to hit that number up North, while most properties down here don’t hit that, so we’re a bargain when people do their federal income tax returns.
People look at more than just the asking price. They look at taxes and the total cost of ownership. The data we’re providing today is a market overview by price. Keep in mind, there are other segments and factors that influence pricing. If you have a home to sell, you need an agent that understands these issues. The market understands total cost of ownership. It’d disclosed on every listing.
If you’re thinking of selling and looking for Top Dollar, always call Sande or Brett Ellis at 239-489-4042 Ext 4. Or visit www.SWFLhomevalues.com to get an instant, Free online valuation of what your home is worth.
See Last Weeks Article: “Pending Home Sales Rose in August 2019”
Good luck and Happy Selling!