The SW Florida real estate market has been a steady as she goes type of market through 2015 with mostly upward price gains, falling inventory, and higher pending sales than last year.  This changed in September as pending sales fell for the first time to below 2014 levels.

Median sale prices have been up over 2014 all year, and September saw this largest yearly gain for the year at a 20.9% increase in median price.  Average price tells a different story.  We’ve had three negative months this year compared to last, and we’ve had two months (March and July) with average prices up over 30%.  For the most part average sale prices have been more tempered though.

New Pending Sales in SW Florida Fall Slightly in September

New listings in September increased over August by 59 homes but were down 6 homes from last year.  So if new listing inventory fell by 6 homes this September versus last year, how is it that inventory actually rose in September versus August?

New Pending Sales in SW Florida Fall Slightly in September

Some pending deals must have fallen out combined with fewer new pending sales in September would explain it.  We would have thought with new Federal lending laws going into effect Oct 3rd we’d see more pending sales in September but that didn’t occur.

Again, we caution about reading too much into monthly numbers.  You’ll see from the Active Inventory graph listings in September fell last year, but they actually rose the previous two years.  So this isn’t a new phenomenon or trend.

New pending sales in SW Florida Fort Myers cape Coral

We’re also keeping an eye on median prices versus average prices.  Average prices can be skewed by large sales so it isn’t as reliable, but if there is a trend we want to know.

As prices rise the market begins to price out some home shoppers.  This can account for why pending sales decline.  Rising home prices affects home affordability.  If wages increased home buyers could afford more.  There is probably more room for price gains as not all of our buyers in SW Florida are dependent on wages.  Some are buying 2nd homes, retirement homes, or investments.  Rising rents make these investments even stronger.

Another thing that could drastically affect affordability is interest rates.  As rates rise it changes the affordability equation.  We’ve already seen an uptick in rates and more are expected.  With prices increasing we expect more homeowners to put their home on the market.  If and when that happens, buyers will have more choices.

We’re about to see all market forces come into play.  When the market crash we saw a few market forces cause the crash, and in the recovery since we’ve seen a few market forces influence the market.

Going forward we’re going to see all market forces sway the market.  This is a sign of a healed housing market.  We’ll see less volatility and more economics in play.

We’ll be looking at wages, inventory supply, new construction supply, oil prices, unemployment, labor force participation, interest rates, national and global conditions.  It really is exciting to get back to normal market conditions as buyers and sellers can more comfortably predict the stability of the market.

We are not seeing overbuilding by the builders.  In fact we could use some more building.  If you’re a buyer and want to search inventory visit It has all the listings and it’s updated every 5 minutes.

If you’re a seller, you’ll want to talk to us.  We have a marketing program we’re sure nobody else has and it’s generating some nice results for our sellers.  We’ll be glad to sit down and show you why there is a difference and what it can cost you if you don’t use our “Secret Sauce.”

Good luck and Happy House Hunting!

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Like anything else, buying at auction can be a good deal, or a rotten deal depending on what you buy and what the terms are.  While there can be upside at an auction sale, the downside is much more frightening and should never be attempted without proper advice and education.

Is Buying at Auction a Good Deal
Is Buying a Home at Auction Always a Good Deal?

Each month we see big auctions advertised on billboards, newspapers and such touting bargains.  I’ve attended several auctions and I’ve learned many things.  In this article I’ll attempt to educate you on some of the things to watch out for that you might not know about.

Is Buying at Auction a Good Deal?

At one auction I noticed a group of people in front and another group in back.  One group kept bidding up the property to prices higher than market value and I wondered why.  Later on I discovered that when they won the bid for some reason they didn’t finalize a contract and the property went back out for re-bid.  This happened as many as 2-3 times per property.  At the end of the night when the crowd had thinned the property was purchased for much less by an investor who really wanted the property.  Essentially it was off the market all night tied up in contract sessions.

Another thing to look out for is reserve versus absolute auction.  An absolute auction means the property will be sold to highest bidder no matter what.  If it’s reserve, you never really know what the reserve is and they try and negotiate with you after you’re awarded the winning bid, so be prepared.

If you’re buying a condominium, or even in a homeowners association for that matter, I would look not only at the property, but also the association.  You may purchase and be the only one paying condo or HOA dues.  This may also make it impossible to sell your property to anyone but a cash buyer as lenders will not lend if the association doesn’t meet certain requirements.

Many are surprised to learn that the title work isn’t sufficient to actually sell the property.  Some have learned they may need to file suit to Quiet Title after they receive what they thought was good title to property.  There is a difference between insurable title and marketable title, and title policies today can exempt many things leaving you the purchaser holding the bag.

The property may also have many defects that aren’t known or get lost in the shuffle, and the buyer inherits them.  At one particular auction I’ve attended, once you put down your non-refundable deposit, you lose it regardless of whether you cannot get the mortgage (even if they promised to give you one at the auction) or if the property has major defects.  You simply MUST inspect the property beforehand or you will most likely be surprised afterwards.  I saw one home when the back half of the home was missing, and the buyer lost their deposit of 10%.  Additionally, if the air conditioner gets stolen prior to closing or damage occurs to property between auction and closing, it’s the buyer’s responsibility, so you are taking All the risks.

You also want to research code enforcement liens, fines for improper permitting, etc.  I had a house listed in Cape Coral with about $70,000 in fines, and a lot in Cape Coral with over $90,000 in fines by code enforcement.  We recently sold a $20,000 lot in Ft Myers with over $200,000 in fines.  In each case we rectified the problems before closing or didn’t close at all in the latter case, but this would not be true at an auction as the buyer would be stuck assuming those fees.

I attended one auction whereby the winning bidder put down their 10% and agreed to finance the unit through the bank at the auction.  They were approved on the spot for financing.  The problem is the property did not qualify because too many people weren’t paying their dues, and the loan was denied on that basis.  The new lender was the same lender selling the property at this foreclosure auction.  The lender obviously knew the property did not meet FNMA guidelines but they sold it to a buyer obtaining financing anyway, and in fact approved their loan.  The buyer was astonished to learn that after being approved, they were later denied, and their escrow deposit was being retained by the seller (the bank) for non-performance of the contract.

Like we said in the first paragraph, sometimes a good deal isn’t a good deal when it’s rotten.  You must thoroughly investigate the property, the association, the contract, the market, the financing, and the title work before you bid or you run the risk of being let down later.

If everything checks out to your satisfaction upfront, we would also encourage you to set limits on what you’re willing to offer so you don’t get caught up in the moment and overpay, only to find out later it doesn’t appraise and your loan is denied and deposit forfeited, unless of course you’re a cash buyer and don’t mind paying too much.

Like anything, an auction is just another way to buy and sell, and no matter which vehicle you use, please be sure to work with professionals and do your homework upfront.  You’ll be glad you did later.  Happy house hunting!