Lee County closed home sales were up 8.2% in July over last year signaling buyers are taking advantage of historically low rates while they can. Prior to May the Lee County housing market had been trending under 2018 levels. We officially broke out of that in May and haven’t looked back since.
Last year Fall rates shot up about 1%. That can and will happen again someday. When they shot up, it limited price gains, and it dampened home sales because affordability was an issue when rates rose.
Buyers felt it instantly. Sellers didn’t feel the pinch until they saw there were fewer buyers for their home. More sellers placed their home on the market, and inventory began to build. For sellers, rising rates is a lagging indicator because it takes them a few months to feel the pain the buyer feels today.
Fast forward to today. Home prices have begun rising again, if only slightly. Successful homes closed have risen, and new pending sales were up 4.5%. New listings fell by 5.7% with the latest numbers. It’s only a matter of time before the active inventory levels fall. Currently they’re still 1.8% higher than last year, but if these trends continue, we expect those numbers to fall.
What we don’t know is how many new sellers will decide to enter the market given recent strength. Market forces shape the entirety of the local real estate market. It’s not as simple as supply and demand. This is because supply and demand is the end result. What influences supply and demand ultimately influences the market and that is what we attempt to flush out for you each week.
If you want to know where the market is headed, you must first know where it’s been, where it is now, and what is influencing it. It sort of reminds me of Hurricane Dorian.
For days experts told us where they thought it was going. It was being influenced by high pressures in multiple locations, upcoming troughs and ridges, all of which were the steering currents. Hurricanes don’t steer themselves. They are just bundles of energy doing what they do. External forces steer them.
Steering currents are like supply and demand. Everyone knows that’s what drives the hurricane, or the market. But knowing what drives the currents is critical to knowing where things are going. Luckily, the computer models did a pretty darn good job with the storm. They told us it would stall out and sit there until other forces decided to move it out.
Real estate markets sometimes stall out until a new force enters the market and drives the thing. Right now, our market is being driven by low rates and tax advantages. Underlying currents are global trade, foreign currencies vs the dollar, jobs, the economy, the availability of money, and a handful of other factors.
We don’t control these external forces. All we control is how we react to them. People are reacting by making purchases because it saves them money. Consumers sense a real opportunity now; one they don’t want to miss. Savings on a 30-year loan add up.
We’ve got some great lenders that can help you take advantage of these low rates. We just had a buyer get a 3.3% fixed 30-year loan. Some buyers need help, and we have lenders that can help with that too. Give our team a call and we can put you in touch with a lender. If you need help with your credit, they can tell you what you need to do to qualify. Many buyers are surprised that they qualify now. Others just have a little bit of work to do and will qualify in a month or two once they take an action step.
Call our office at 239-489-4042 and speak to one of our buyer specialists or visit www.LeeCountyOnline.com If you’re thinking of selling, ask for Brett or Sande at Ext 4 or visit www.swflhomevalues.com . We may be able to make your dream a reality, and at low, low rates.
See last week’s article Lee County July 2019 Real Estate Prices Rise Slightly