SW Florida real estate inventory supply rose slightly since October.  In October the months supply of inventory stood at 4.33 months.  Today the real estate inventory supply registers 4.43 months.  We’ve been reporting that listing inventory has been growing since October, but so has pending and closed sales.  This chart illustrates the relationship between active inventory versus closed sales the last 365 days and its effect on real estate inventory supply.

Real Estate Inventory Supply SW Florida

Sometimes we have a glut of inventory and low sales.  Other times we have low sales because there is little inventory to sell.  The relationship between the two data points tells a story.  The market is constantly moving; therefore, we are constantly studying it.  If you think you have the market all figured out today, you’re an expert for one day.  Studying the numbers is a never-ending process, but it is what’s required to keep clients educated so they can make the best selling and purchasing decisions available.

Looking closer at the numbers reveals in general the lower priced ranges below $300,000 did the best.  Most all these ranges saw even or declining supply relative to sales.  The $600k- $1 Million and the $1 million plus ranges gained the most inventory.  We have three possible theories as to why this occurred.

Higher priced homes generally take longer to sell, so it’s possible there is a lag between the time sellers place their home on market and time it closes.  The other theory could be that buyers have really turned on in the lower ranges due to lower interest rates.  Perhaps buyers in the lower ranges are more interest rate sensitive.  Lastly, it could be that mid-range and higher range buyers are move-up buyers and have recently sold their entry level homes.  They could help push sales higher in the mid ranges in the coming months.

While any of these theories are possible it proves that the market doesn’t always move in tandem.  Certain ranges get hot before others, and certain ranges cool before others.  We’ve even seen certain ranges remain hot and other ranges remain cold for extended periods of time in the past.  While every market is local, there are several sub-markets in any market.

Sometimes it’s unfair to report how the overall market is doing, because it can distort what’s going on at the neighborhood level, or at particular price points.  Have you noticed that certain stocks slump while the overall stock market is on fire?  The same is true in real estate.

The Ellis Team gets called on several listing appointments each month.  Sellers call us because they want an accurate valuation of their property.  They don’t want to under price it and give equity away, and they don’t want to over-price it and have it sit on the market with no offers.  Some sellers have an honest disagreement about what the market is telling them their home is worth, so they choose not to sell, or they list it above market value, and it fails to sell.  It’s natural to think your own home is worth more than other people think it’s worth because you’re emotionally tied to it.  We get it, and as humans we feel the same way about our own stuff.

Therefore, it pays to have someone else you can trust represent you.  A non-biased advisor can be honest with you and educate you about the market and where your home stands relative to the competition.  We enjoy helping people get Top Dollar for their homes through our market knowledge, expert negotiating, and world-class marketing.  We also know pricing it correctly upfront will help get a better price.  And if you place your home on the market and it doesn’t sell, don’t stop marketing.  It may be time to re-position it in the marketplace, but don’t stop the marketing.  You’ll need more marketing juice to inform buyers of the new price.

To learn more about your home’s value, simply call Brett or Sande Ellis 239-489-40402 Ext 4 or visit www.SWFLhomevalues.com to get a Free and instant online value of your home.

See last week’s article “December Real Estate Activity Busier than Usual

Good luck and Happy Holidays from the Ellis Team!

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

How Much is Your Home Worth?