We were having a one on one training session with one of our agents this week and the conversation came up about summer home sales.  He was excited because he thought this summer was going to be good for home sales.  And yet, so many agents out there talk about spending summers up north and taking time off because sales are slow in the summer.  Their perception becomes their reality.  Read on to find out why summer great time for Southwest Florida home sales.

If they believe sales are slow and take the summer off, sure enough, their sales will be slow to non-existent.  And they will be right, and their decision to take the summer off will have been justified.  Over the years my mother Sande and I would just laugh, as we raked in sale after sale in the summer.  For us, year-round sales were good, and summer was better.

Summer Great Time For Southwest Florida Home Sales

I went back and looked at MLS sales stats from 2000-2003.  As you can tell, home sales would begin climbing in Feb and generally peak during the summer.  After 2005 we began a steep decline in prices which ultimately led to the foreclosure crisis.  This article isn’t about all that.  We have plenty of other articles on our Blog about that.  During the recovery, the typical home buyer changed.

We see signs that we’re returning to the normal home buyer process.  It would be too easy to assume that all home buyers relocated from up north.  For a period, it seemed that way, but things are not always as they seem.

Traditionally Southwest Florida homeowners made their moves in the summer.  They owned businesses or worked in the service industry and were quite frankly too busy in season to think about moving.  Kids were in school, work was busy, and buying or selling a home couldn’t be the top priority, until summer came.

Keep in mind, summer is the busy selling season up north too, so any relocations were dependent on that sale up north.

After the housing correction, many SW Florida homeowners were trapped in their homes.  They couldn’t make a move.  They lost so much equity they couldn’t afford to sell, and they were busy working on their businesses too that may have suffered.  As years have progressed, we’re seeing signs now that many homeowners are choosing to make a move.  They finally have equity back in their home.  Their incomes have returned to normalcy.

Some wish to downsize, while others have growing families.  Many homeowners wish to change lifestyle or prefer a different location.  Whatever their reason, summertime is the best time for locals to address their situation.

Our agent was correct.  Summertime is a great time for home sales, if you’re present and working the market.  The numbers don’t lie.  Sales are happening in the summer.  The only real question is who’s going to make them.

I remember hearing an agent say years ago that nobody wanted to buy in Lehigh.  Really?  I looked in MLS and found there were lots of sales in Lehigh, so clearly somebody was buying there.  The truth is, that agent didn’t want to sell in Lehigh because they didn’t know the market, it was too far out, or they didn’t like the price point.  The reality is that agent found a way to justify why not to sell.  It’s like the argument that nobody buys in the summer.  If you want to tell yourself that, then indeed sales will be down for you, and you’ll be right.

Many sellers need to sell in the summer.  Realize that home sales occur all months of the year, and really any month is a good time to sell if your home is priced correctly and marketed heavily.  Sure, a hurricane might disrupt a month here or there, but overall, we have a pretty stable and steady market.

To shop for your dream home, go to www.LeeCountyOnline.com  If you have a home to sell, call Brett or Sande Ellis 239-489-4042 Ext 4.  And don’t forget to vote us Best Real Estate Team in SW Florida in the News Press poll.  www.bestswfl.com

Good luck and happy home selling!

Ellis Team Weekend Open Houses

Between McGregor and the River

Open Saturday 1-3 PM

1281 Biltmore Dr

Priced to Sell!

Parker Lakes Pool Home

Open House Sunday 1-3 PM

14941 Lake Olive Dr

Parker Lakes Pool Home

Waterfront Condo With Boat Slip Availability

Open House Sunday 1-3 PM

1627 Beach Parkway Unit 208

Gulf Access with Boat Slip

 

Home prices in Southwest Florida have been stagnant for the better part of a year now, but nobody believes it because headlines tell us how wonderful homes are appreciating in Florida. We were waiting to see how season went to see if that trend would continue.  What we found is more of the same, SW Florida home price gains remain elusive compared to Florida in general.

SW Florida Home Price Gains Remain Elusive Compared to Florida

The Cape Coral- Fort Myers MSA median home prices increased .6% in the 1st quarter compared to 9.7% statewide.  Our condos and townhouses showed no price change whatsoever from last year, compared to 7.8% gain for the state.  Cape Coral-Fort Myers is the 6th largest MSA in the state, and yet each of the 5 larger MSA’s all had gains of 4.8% or better.  Some much higher.

We go on listing appointments where the seller believes their home has appreciated 9% in value each of the past few years.  Unfortunately, if you interview enough agents you will find one that agrees with you and takes the listing.  Getting the listing isn’t the end of the sales process, it’s simply the first step.  The seller sets the price and the market determines its value.

If a seller sets the wrong price, one thing happens, doesn’t it?  You guessed it, it sits on the market like a lonely school child watching all the other kids play.  Oh, it may have some friends.  Misery loves company.  They hang out with all the other kids who have overpriced their home too.  The strange thing is, nobody really wants to be in this club.

So, they turn on each other, and start lowering their prices to get out of the club.  Each watch what the other is doing, looking over their shoulder each time they make a reduction.  The only problem is, they’re looking the wrong direction.  They should be looking at all the kids playing.  Wherever that group is, that’s where they should head.  While they’re busy looking over their shoulder at where they’ve been, their eye still isn’t on the market.  It’s looking backward instead of forward.

The market rarely sits idle.  It is moving.  While they’re looking over their shoulder, the moving target in front of them just moved someplace else.  Wouldn’t it save so much time to just find that group of kids on the playground and get right in there?  Skipping a half mile behind them means you did spend time on the playground, but when recess is over, you never had any fun.  If you’re going to the trouble of placing your home on the market, you want results.  The quicker you get there, the more fun you have.  If the market is on the move, you never want to get caught chasing the market.

Chasing will not only wear you out, it can cost you money.  When all the overpriced homes figure it out and finally make their move, you now have more competition.  Setting your home price correctly upfront and reacting quickly if it doesn’t sell is a recipe for faster to the fun.

If you’re thinking of selling in the next year, check out www.SWFLhomevalues.com You’ll be able to get approximate current values for your home.  Of course, to be most accurate, always call Sande or Brett Ellis and we’ll be happy to come out and view your home and tell you what we think it would sell for.  You might have some questions about how the process works, timing, or where you would move to.  We’d be happy to sit down and discuss all this with you.  You’re more than a transaction to us.  We’re interested in getting you to your next destination safely.  Hopefully you’ll have some fun on the playground while we sell your home for you.  Call Brett or Sande at 239-489-4042 Ext 4

Good luck and happy selling!

Ellis Team Weekend Open Houses

Open House Saturday 1-3 PM

Parker Lakes Pool Home $300,000

14941 Lake Olive Dr

Open House Sunday 1-4 PM

13460 Marquette Blvd     3 Bed 2 Bath Waterfront Home

This past week we’ve seen some wild fluctuations in the stock market, so we thought we’d answer some questions people have.  One question we’ve heard recently is does stock market volatility affect real estate values?

Stock Market Volatility Affect Real Estate Values Stock market volatility
Stock Futures Suggest Volatile Open

The simple answer is, not really.  There is a general correlation between stock market values and real estate values.  As the economy does better, both markets tend to do better.  However, we’ve seen instances where people pull money out of the stock market and place it into the real estate market.

Interest rates tend to affect sentiment in both markets.  Rising inflation leads to rising interest rates, which both markets dislike.  Investors will sometimes pull money out of stock market and into bonds for the yields.  Therefore, the stock market doesn’t like rising rates.  Rising rates also hurts borrowers as it zaps purchasing power from buyers in the real estate market.

Stock Market Volatility Affect Real Estate Values Housing vs stock market

However, we’ve seen inverted yield curves whereby sort term rates are higher than long term rates.  This breaks most of the rules as usually long-term rates carry more risk, so investors want more yield in a longer security.  Therefore, we have to look at the reasons for interest rate and stock market volatility before drawing conclusions as to its effect on consumer sentiment and real estate prices.

On Friday February 2 jobs data came out and showed wages climbed 2.9% from the previous year which was the best gain since 2009.  This spurred inflation fears and concern that the fed would hike rates unexpectedly, which naturally draws volatility from the stock market.

The bottom line is not much has changed in the economy in the last week or so.  The only thing that has changed is stock volatility, and the realization that rates will go higher.  We’ve been talking about it for a few years, and reality is finally here.  Everybody knew this day was coming.

The tax reform has spurred wage growth.  We expect to see a tight labor market.  Some jobs are moving back to the US, while some jobs will be lost as business reorganizes.  Retail stores and banks may continue to come under pressure as online wins the day.

I wouldn’t put much attention into the stock market other than seeing how it affects your retirement savings.  The smart money is watching interest rates.  Rising rates don’t necessarily kill the stock or real estate market, but it can stifle or limit its growth.

Wage growth will dictate how far real estate prices will rise.  The stock market doesn’t go one direction forever, and neither does the real estate market.  Wages must eventually rise if you want continued rise in prices.  Rising rates stymie price growth, and rising wages can offset some of that. Unfortunately, rising wages is correlated to rising rates as they can be inflationary.

The stock market did well 2008-2016 due to free money.  It did even better in 2017 due to rising expectations in the economy.  Free money is over, and it must be.  We’re heading into a period of normal market conditions controlling the markets.  This is healthy and a good thing.

We’ll be watching inflation, interest rates, oil, and the overall economy.  We’ve got a balanced real estate market here in SW Florida. Buyers are scooping up properties now to beat those rising rates, however they’re not over-paying either.

Buyers want to buy, but not overpay.  They’re being careful and doing their homework.  Inventory is rising, but still low.  Research and market knowledge wins the day whether you’re a buyer or seller.

One of the best websites to keep up with the market is www.LeeCountyOnline.com  The database is updated every few minutes.  It not only has all the listings, it also has sold data in our market reports section.

Always call the Ellis Team at Keller Williams Realty for professional real estate advice 239-489-4042.  If you’ve got a house to sell, ask for Sande or Brett.  Our team stands by ready to help you buy or sell, and educate you on the market.

Ellis Team Weekend Open Houses

Open Saturday 1-3 PM

Danforth Lakes

9103 Falcon Pointe Loop

4 Bed 3 Bath  $330,000

9013 Falcon Pointe Loop

Open House Saturday 1-4 PM

Parker Lakes

14811 Crystal Cove Ct Unit 1102

2 Bed 2 Bath lakefront  $225,000

Parker Lakes Condo

Open House Saturday 1-4 PM

Island Park Village

17813 Port Boca Cir

2 Bed 2 Bath Lakefront  $215,000

Island Park Village Condo

Open House Sunday 1-4 PM

Olde Hickory

9071 Old Hickory Cir

3 Bed 3 Bath Golf Course View  $360,000

Olde Hickory Golf Course Home

We get a lot of questions about the standard residential purchase contract versus as-is agreement.  Let’s go over the differences and how each should be used.

Standard Residential Purchase Contract Versus As-Is Agreement

First off, the seller is required to disclose known defects regardless of which contract is used.  In the old days agents always used the standard purchase contract which provides for automatic repairs of certain items.  There was always a fight about what was covered or not, so the contract was cleaned up and made more precise.

Standard Residential Purchase Contract Versus As-Is Agreement

Since the foreclosure crisis it’s become common practice to use the as-is agreement.  The as-is agreement has no automatic repair provisions, so it allows the buyer to cancel for any reason.  What invariably ends up happening is a fight about repairs.  Buyers get ticky-tacky about little things and demand they are repaired.  The seller says no, it was sold as-is and we’re not doing it.  The buyer walks and finds another property.

Meanwhile the buyer is out the inspection costs and starts all over.  The seller had their home off the market for 10-15 days and lost marketing time.  If the buyer wasn’t prepared to accept minor issues they should not have written an as-is contract.

Under the standard contract the seller is responsible for repairs up to 1.5% of purchase price for items like roof, water damage, heating, cooling, plumbing, septic, etc.  Cosmetic conditions are not covered.  And yet even with as-is contracts buyers ask for cosmetic repairs and get turned down and are left searching for another home.

Buyers are Fearful

Buyers are fearful the problems are bigger than they are, or that costs will mount.  Buying a home is an e emotional event, and fear often gets the better of buyers.  The time to talk about all this stuff is before they purchase a home.  Once buyers know what to expect, the process becomes much easier for them.

Sellers are emotional too.  They often feel like the buyer got the better of the deal in negotiations, and now they want stupid repairs on top of it!  You can hear their frustration the minute we present them with repair issues.  The as-is contract was supposed to cure all this and make contracts simpler and less argumentative.

People are people, and no contract is going to suppress the emotions of fear and greed.  So long as this is reality, it might be best to consider using the standard contract which addresses certain issues quite well.

Agents Should Counsel Buyers and Sellers

At the very least agents should be counseling buyers and sellers up-front as to expectations and the process once an offer comes in.  If buyers and sellers are properly educated, the emotions are tamed, and the experience of the agent takes over.  Each side has confidence they are being treated fairly and according to protocol.

This is one more reason for sale by owners have such a difficult time selling on their own.  They don’t have anyone counseling them on how to act and feel.  More importantly, there isn’t a neutral party the buyer trusts counseling them on how to feel and act either.  Invariably the deal blows up and both sides are more frustrated than ever.

Agents, have upfront consultations with your buyers and sellers.  If your buyer is skittish or emotional, consider using the standard contract.  It will keep more deals together for you as the contract is specific about what is covered.  The as-is contract is like the old Wild West, and in the Wild West anything goes.  And usually somebody dies.  Don’t let your contracts die needlessly.  Rely on your agent’s wisdom and experience to get through these issues.  Hopefully both sides are using an experienced agent.  Learning on the job is not fun for buyer or seller.  Experience matters.  Either use an experienced agent with hundreds if not thousands of transactions experience, or someone on a team who has access to all that experience from a team leader.  Experience isn’t costly, it’s priceless when you need it.

If you’re looking to buy or sell, always call the Ellis Team at Keller Williams Realty 239-489-4042 or visit our website www.LeeCountyOnline.com for more tips.

Ellis Team Weekend Open Houses

Parker Lakes

Open Saturday 1-3 PM

Parker Lakes Ellis Team Weekend Open Houses
Parker Lakes – Gated Community

14811 Crystal Cove Ct Unit 1102

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