National experts and economists are warning that the national real estate market may have peaked. This past week we attended the Keller Williams Mega Camp and spoke with top agents from all over the country to get their perspective as well.  We’ll attempt to answer that question. “Has the National Real Estate Market Peaked?”

There are many forces that influence how well a market is doing, and in 2018 we’re seeing a new dynamic we’ve never seen before.  Typically markets pull back due to economic factors like unemployment, interest rates, consumer confidence, etc.  This year we’re seeing fewer sales nationwide due to lack of inventory.

Has the National Real Estate market Peaked? Months Supply of Inventory

Inventory is starting to rise again.  So are interest rates which are affecting home affordability.  Prices rose approximately 4-6% nationwide last year, while incomes rose 2-3%.  In a fully indexed market, this isn’t sustainable.  Keller Williams’ leadership mentioned we’re in a supply driven shift, which is unique because usually shifts in the market are determined by other factors we mentioned earlier.

So, the answer lies in what happens first?  As we exit the supply driven stall, what wins out?  Does consumer demand eat up the new inventory, or does interest rate hikes take its toll and dampen the ability of buyers to pay more?

Nobody knows the answer to this, but some experts are predicting lower sales due to a softening in some markets.  Mortgage applications are down 3% last week nationwide and have been down for 4 straight weeks.  Mortgage bankers are noticing a 17% decline in year over year mortgage applications.

The economy is on a roll.  Unemployment is down to 3.9%, and demand for housing has been strong.  We all know real estate is local.  SW Florida can be influenced by other markets, but each market has its own strengths and weaknesses that can buck the national trend.

For instance, while the rest of Florida and the country were enjoying wild gains the past year, SW Florida did not.  This might be good news for SW Florida because if it’s determined later that the national market got a little ahead of itself, we may be insulated from losses as we did not participate in all those gains.  Lee County may have been a leading indicator.

Fundamentally it feels like a strong market nationally.  If it is fully priced, the future depends on affordability and what happens with jobs, income, and interest rates.  Price will move up or down depending on these other variables.

Locally, we’re subject to the same issues, and a few more.  Throw in a possible hurricane, red tide, blue green algae, etc. and you see we have some wild cards.  Personally, it feels like we too have a pretty good real estate market going right now.  And the red tide and algae will soon pass.  Because we didn’t participate in the big run-ups this past year, and because we have outside money that comes into SW Florida each season to invest in our market, we have potential for good times ahead.

The average Joe gets hurt the worst when the market shifts because outsiders price them out of the market.  Locally incomes only rise so much, and yet local buyers must compete with snowbirds and investors to buy the area’s most affordable properties.  It puts a strain on local buyers with limited income.

Regardless of what the national market does, Lee County has some really nice things going for it.  And the negatives that are here today may be gone in a few months.  We just need to see if sellers thinking of selling beat the interest rate hikes.  Those that sell now may be in a favorable position, even if the market only stalls.  It’s more fun to sell in a low inventory market than a neutral market.

Our website www.LeeCountyOnline.com has all the listings, and it’s updated instantly, so finding your SW Florida real estate bargain is a quick search away.  One of our happy Ellis Team agents will be happy to answer your questions.  To sell your home, call the Best Team in SW Florida. 239-489-4042. Ask for Brett or Sande Ellis Ext 4. And we’ll be happy to help you get Top Dollar and close in record time!

August 2018 SW Florida Real Estate Market Update

While pulling data for the latest monthly supply of inventory we noticed some increases in buying activity in certain price ranges.  Today we thought we’d bring you the latest monthly supply numbers and answer what price ranges are hot in SW Florida real estate market.

What Price Ranges Are Hot in SW Florida Real Estate

The overall months’ supply of homes on the market today stands at 4.2 months.  5.5 months’ supply is considered a balanced market, so overall, we’re in a seller’s market.  However, as we all know, there are segments in the market and supply changes by price range.

Obviously by looking at the chart, anything $250k or under is the sweet spot for this market.  However, anything up to $400k isn’t too bad either.  So where did we see a pickup in home sales since we last published this report?

What Price Ranges Are Hot in SW Florida Real Estate?

We saw a nice gain in sales in the $200-250 range.  For the past 365 days there were 2,177 sales compared to a rolling 365 day count back in April of 2,059.  That’s a pickup of 118 sales in a 3-month period.  The overall market saw a pickup of just 6 homes.  There were almost 19,000 home sales in the last 365 days, so 6 homes is almost dead-even.

The $300-$399k range saw a pickup of 87 homes, and the $400-$599k range saw a pickup of 86 homes.  So, if the overall market only picked up 6 homes, there had to be some drops.  The $100-$149k range saw the largest drop of 160 homes followed by the $100k or less of 108 homes.  Now, this isn’t necessarily a bad thing.  It means these homes graduated to higher prices and there were fewer homes available in those ranges.  The market didn’t suffer because as those homes graduated, we saw an increase in home sales into the prices ranges they graduated into.

What does all this tell us?  It tells us the market is segmented and you have to know your numbers.  Pricing is still important as to how aggressive you choose to be.  When you’re stretching it, you must market the home well, and be prepared to adjust if the market doesn’t respond.

Nationally, homes sales slipped month over month.  Interest rates are creeping up.  Rents are high in Southwest Florida which motivates buyers to purchase, however rising rates crimp their ability to pay.  We love a seller’s market that is close to balanced.  There are winners and losers in every transaction.

Getting to Win-Win

Many times, there are two winners, the buyer and seller.  The loser is the buyer who missed out because they weren’t ready.  Getting pre-approved before you offer helps so much, especially in a multi-offer situation.  Having an experienced agent who can help make your offer look the best to the seller helps too.

Remember this.  The buyer and seller are not in competition with each other.  Buyers are in competition with all the other buyers out there competing for the same supply of homes.  The sellers are in competition with all the other sellers out there for the interested buyers.  When you find a home you like, don’t screw it up.  Go get it.

Sellers, when you find a buyer that works, don’t screw it up either.  The best homes go fast, and the best buyers go fast.  You must ask yourself, am I willing to lose this transaction, because the next may not be as appealing to me as this one?

It Takes a Pro

It takes a strong real estate professional who knows the market and knows the numbers to properly help you make that decision.  If you’re thinking of buying, selling, or both, always call the Ellis Team at Keller Williams Realty.  We’ve been doing this awhile, and we’ve seen a few things.  We can help make the difference for you!

Feel free to search the MLS, or find out what your homes is worth online for free at www.LeeCountyOnline.com  Or call us at 239-489-4042  We’re glad to help!

Ellis Team voted best real estate team in SW Florida News Press Readers Poll
Brett and Sande Ellis Voted Best Real Estate Team in SW Florida

Ellis Team Voted Best Real Estate Team in SW Florida by News Press Readers

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