I recently read an article in USA Today about how the housing inventory shortage nationwide reached 20-year low and how it’s affecting the market.  While every market is local and is influenced by its own factors we do not work in isolation of other markets.  Therefore, national stats are also of interest to us.

For instance, if the economy is down nationwide chances are it’s affecting us here in SW Florida.  Additionally, if snow birds have a hard time selling their properties up North, they may not all be able to purchase down here.

Housing Inventory Shortage Nationwide

The article mentions there is a 4.3 month supply of homes on the market nationwide.  Locally we calculate the supply to be 4.22 months, so we’re pretty similar to national statistics.  One of the reasons mentioned in the article for the tight supply is that baby boomers aren’t likely to move in the next year.  78% of baby boomers are happy with where they live, and baby boomers own about 33 million homes.

While many baby boomers would love to move to Florida or Arizona, some are reluctant to leave family and friends behind.  While this is mentioned in the article, it’s not a trend we’re seeing locally.  It appears to us now more than ever baby boomers are eager to move and family isn’t holding them back.  Of course, we tend to deal with those that are contemplating making the move versus those that never would.

Millennials have started purchasing recently which will add to tight supplies.  We believe as baby boomers age they will begin to think about smaller homes, homes in warmer climates, or homes that meet their needs due to health reasons.  Not every baby boomer will appreciate a 2 or 3 story home up North.  Once they decide a 2-story home is no longer their best option, they may consider whether staying up North is too.  It opens the whole gamut once a move is considered.

Thankfully builders are building again.  Unfortunately, most buyers don’t know all the building developments available to them, nor which ones are offering incentives and discounts.  Most buyers don’t realize they get a better deal through a realtor than they do walking in on their own.

If they walk in and ask that question the answer will be it’s the same price whether you’re represented by a Realtor or not.  They may not tell you about incentives, and they certainly won’t tell you about competing builders in other neighborhoods.

We’re getting early word that the Fed will scale back it’s $4.5 Trillion in bonds beginning in September.  This will raise interest rates.  If rates go up we could see a buying frenzy followed by a reduction in the rate of growth in home prices.  Nationwide the S&P Core Logic  Case Shiller home price index was up 5.6% due to low inventory.  Rising rates could curtail that growth.

Either way we need more homes.  The economy is doing better and people are buying.  If you’re thinking of selling, you might want to cash in before the stream of sellers enter the market.  You can see from the chart inventory is lowest in the summer and picks back up again starting in September/October.  Why compete with all the other sellers next season when you can have them all to yourself now?

If you’d like to talk about selling your home, please call Sande or Brett at 239-489-4042 Ext 4  Or you can go to www.SWFLhomevalues.com and find out your home’s value for free in minutes.

If you’d like to search for your next home check out www.LeeCountyOnline.com  Our team can help you find your next home and sell the one you have, making it a smooth transaction.

Always Call the Ellis Team at Keller Williams Realty!  We’re here to help.

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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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Rising mortgage rates motivates home buyers in position to buy to do so sooner rather than later.  In a rising rate environment like we are in right now, It costs home buyers in two ways.

First, their purchasing power goes down about 10-11%.  Let’s say a buyer picks out a home at their max budget of $1294/mo.  This is the figure their lender approved them for based upon their income of $51,765  Not long ago rates were at 3.625%  Today they are at 4.25% and according to Ruben Gonzalez, staff economist at Keller Williams, rates should gradually increase throughout 2017.

Rising Mortgage Rates Motivates Home Buyers

If they go up another .4% or so, we’ll have had a 1% increase in a relatively short period of time.  Nothing has changed for the buyer.  If they were maxed out for a home at $200,000 a few months ago, they are now maxed out at $180,000.  Their job didn’t change.  Their finances didn’t change.  The only thing the changed was interest rates, so they just lost 10% purchasing power by waiting.

Rising Mortgage Rates Motivates Home Buyers

If the selection of homes didn’t look enticing at $200,000, it will look even worse at $180,000.  Waiting may have just cost this buyer a chance to buy a home at all.

Secondly, if this buyer was not maxed out at $200,000, buying the same home will now cost about $50 more per month.  Over 30 years that equates to $18,000 in extra interest payments simply because rates went up.

Rates are still historically low.  Many people remember back to double digit rates or even worse.  To think that we’re even warning people about rates in the 4’s is comical, except for the fact that it’s real money.  Home prices are much more today than they were when rates were in the high teens.  So many things cost much more today, like gas, health care, groceries, etc. than they did decades ago.  Even though rates are low by historical standards, we now have to stretch that money further because everything else has gone up so much.

It’s hard for young people to scrimp and save money for a down payment.  Add in homeowner’s insurance, rising rates, and high costs of everything, and we see the pressure on first-time homebuyers today.  First-time home buyers are a springboard to move-up buyers, so if we eliminate first-timers we one day won’t have move up buyers.

Don’t think that rising rates only affect first-timers.  It affects all segments of the market.  It may help cash buyers in that rising rates pay greater returns on savings, but it still affects all price ranges as it trickles up sooner or later.

If you’re a seller, you’ll notice someday there are less buyers for your home than there once was simply because less qualify at the higher rates.  Less buyers can be a drag on home prices.  If rates keep rising it could take some steam out of the housing market.  If you’re waiting for higher prices later, you may be sorely disappointed if they don’t rise at the pace you’re expecting.

Many sellers replace their current home with another home, and if they’re getting a new mortgage on that home they may be in for some sticker shock when they get that new loan.  It can cost you buying your next home, and selling your existing home.  Rising rates are no fun for buyers or sellers.  Low rates are one of the factors that have propelled the real estate market.

We feel the SW Florida real estate market is fairly valued.  We don’t see risk of decline like we had back in 2005.  However, rising rates may damper future gains.  Even though wages may increase, rising rates may offset those gains and help keep prices steady instead of rapidly rising.  In other words, if you’re waiting to make a move, be warned.  Whether you’re a buyer or seller, the risks are the same.  It will cost you to wait!

Feel free to search the MLS like a pro at www.Leecountyonline.com for your next home, or just get an idea of what homes are selling for.  To talk with a real Pro, Always call the Ellis Team at 239-489-4042  We’ll advise you so you can make a great decision for your family.

Hopefully everyone had a great Labor Day weekend.  The Ellis Team household celebrated with friends and family with a cookout and football party.  Good times were definitely had by all, and that’s the way it should be.  Beating the post Labor Day real estate stall isn’t rocket science, but more on that after we tell you about the stall.

I started cooking the day before.  I made all the sauces, put the rub on the meat, and eventually placed the pork on the smoker at midnight.  The plan was to smoke the meat at 225 degrees for about 17 hours.  The meat must reach a certain temperature, but inevitably the temperature gains stall out at about 160 degrees for a period of 5 hours or so.  This frustrates many who are not accustomed to the stall.

The stall is that period where temperature gains cease for a long while.  This is because at 160 degrees the meat begins to sweat and cool itself.  Juice go from the center to the edges during this time period.  One way to beat the stall is to wrap meat in aluminum foil at 160 degrees and keep the heat on.  By doing so you can retain some of the moisture and cut the heating time down.

Beating the Post Labor Day Real Estate Stall

So you might ask how does all this relate to real estate?  Each year after September the SW Florida real estate market reaches a stall.  If you know it’s coming there are things you can do to shorten the time-frame of the stall.  You must power through it as buyers and sellers are counting on you.

Beating the Post Labor Day Real Estate Stall

Knowing it’s coming is half the battle.  The other half is preparation.  Just as most of the work to cook the meat was done the day before, so it is true with the real estate market.

We continue to list and sell properties.  In fact, we’re cranking some sales now at a time when county-wide sales are down.  We don’t stop advertising, and we don’t stop prospecting for buyers for our listings.

In fact, much of the work we’ve done the past few months helps us with sales during the typical “Stall” time.  Some Realtors take off in the slow months, but this is the time to put the real work in.  Championships are built in the off season.  This was opening weekend and you can tell which teams put in the work as they were the most prepared for week 1.

When we list a home in September it’s very possible we already have the buyer we obtained in July or August.  We have a database of thousands of buyers we’ve worked hard to build up.  Some are buying today, some are buying tomorrow, and some next month.  We don’t control their time frame, we only control our efforts to obtain buyers for our listings.

Often times sellers will ask us if we have a buyer for their home.  Quite often the answer is yes.  When we take a listing we bring it back to our team of agents who cross-check our database to see if we’ve got someone for that home.  Perhaps we have someone flying in on October 2nd who matches perfectly.  Perhaps we have someone now.

In any event, we market the home too, because even though we may have 3 buyers for our listing the market may have one ready, willing, and able to buy it today.  And you never know which buyer will pay the highest price.

Don’t Sweat the Stall

It’s the hard work we put in year-round that enables us to sell homes every month of the year.  So we don’t worry too much about the “Stall”.  We advise our clients on what the market is doing, and if we’re doing our job at the highest level, perhaps we can shorten our client’s time-frame and power through it for them.

If you’ve got a home to sell, we should probably talk.  It’s possible we have a buyer for it, and either way our marketing attracts buyers.  If you’re a buyer, we’ve got some great new listings coming to the market in the next few weeks.  You can search at www.LeeCountyOnline.com or call us at 239-489-4042

We look forward to working with you!  Good luck, and Happy House Hunting!

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Watch the Future of Real Estate September 2016

One of the things we like to study is the SW Florida real estate market velocity. In a snapshot it tells us several key indicators about the state of the local real estate market.

SW Florida Real Estate Market Velocity
SW Florida Real Estate Market Velocity

We used this graphic at a recent filming of our Ellis Team Seller’s Club video shoot. Each month we dive deep and share key factors we’re looking at and how they’re affecting various segments of the market.

For instance, the market doesn’t all move at once. Certain segments may lead and others follow. Because it’s a video we’re able to illustrate more than just a graphic or two and 700 words. We can really explain each force and its effect.

SW Florida Real Estate Market Velocity

One of the numbers we look at not on this graphic is Total Dollar Volume. Total dollar volume is down 27.7% in July. Last year Realtors sold $420.4 Million dollars worth of residential real estate. In 2016 was $304.1 Million in July. Two factors contribute to this decline.

First, closed sales were down 17.3% Secondly, average sales price was down 12.6%. That’s a double whammy to the market. While these two numbers aren’t on the velocity graph, it does confirm a few trends on the graph.

Listings are up and new pending sales are down. Now you might ask, if new listings are down 2.5% how is it that overall active listings are up 15.5%? This can be for a number of reasons. Older pending sales could have fallen out and come back on the market. These would not be new listings. And even though new listings entering the market declined, new pending sales are roughly equal to the new active listings. So if any pending contracts fall out, and some always do, it adds to the listing inventory.

Lastly, inventory has been rising. It’s actually down from where it’s been in the last few months, but definitely up over last year.

When you hear the market is up, down, or sideways, it doesn’t tell the whole story. The headline tells one story, but the market may have several stories to tell. Right now there are 3 distinct markets with a possible 4th developing. We have the buyer’s market, the neutral market, and the seller’s market.

In our Seller’s Club video we dive into which segments are in the buyer’s market, which ones are neutral, and which ones are seller’s markets. Knowing where your home stands is important to know. And if you’re a buyer, this is also important information as it dictates how much you can gamble in your negotiations. We’ll be starting up a Buyer’s Club soon so buyers too can see in-depth information.

Whether you’re buying or selling, it pays to understand where the market is today, and where it’s headed. Interest rates and economic events can also influence the markets and we bring you our analysis on those as well.
If you’re a buyer and would like to search the MLS or view neighborhood reports, simply go to www.LeeCountyOnline.com

If you’re a seller, you can find out what your home is worth online, or view the same neighborhood reports. Neighborhood reports show you all the homes for sale, pending, and sold in particular neighborhoods. It also shows you time on the market for each listing, dollar per sq ft calculations, sold dates, and photo galleries of each listing.

Of course there’s no substitute for working with experienced agents who know the market. Our website is for those that wish to do their own research before speaking with a Realtor.

If you’d like to be added to our Buyer’s Club or our Seller’s club, send me an e-mail at Brett@topagent.com and let me know which one. We’ll get you on the list and on your way to receiving these great in-depth monthly video reports.

If you have a home to sell, please call us at 239-489-4042. Ask for Sande or Brett and we’ll be glad go over our marketing and show you why our homes sell faster and for more money!

Good luck and Happy Labor Day Weekend!

Now it really gets fun. We’ve been doing a series of articles on what you can buy at various price points, and today we answer the question, what does $ 1 Million buy in SW Florida real estate market?

We concentrated our search on single family homes but there are some nice condos available in SW Florida in all these prices ranges.  None of the listings presented here today are our listings.  In fact, in all four articles so far, none have been.  We’ve been trying to educate readers on what you can buy, so we’ve hand selected some interesting properties.

What Does $ 1 Million Buy in SW Florida Real Estate Market?

1 Million Buy in SW Florida Real Estate Market
Fort Myers Million Dollar Home

In Fort Myers we found a home listed for just under $1 Million.  It is a large 2 story home with over 4,400 square feet of living area.  It is located between McGregor and the River and this pool just really caught our eye.  There are so many great homes located in this area it was hard to choose.  This is a fairly newer home built in 2007 so it was unique.

1 Million Buy in SW Florida Real Estate Market St James City
St James City Million Dollar Home

We found a home in St James City listed for just under $1 Million as well.  It has 3 bedrooms, 2 ½ baths and has gulf access with a boat dock right out your back door.  You can be fishing some of the world’s best fishing spots in minutes.  This home is bay front and has 2 boat lifts.

1 Million Buy in SW Florida Real Estate Market Sanibel Island
Sanibel Island Million Dollar Home

Next we head over to Sanibel Island, home to some of the world’s best shelling.  This home is a 4 bedroom, 2 bath home and has excellent rental income.  You can enjoy this home for yourself on gorgeous Sanibel Island or you can rent it out and receive close to $70,000 income until you’re ready to call it home.  Or you could do both, renting it out and vacationing here.  It is nicely decorated and is furnished.

1 Million Buy in SW Florida Real Estate Market Cape Coral
Cape Coral Million Dollar View

Lastly we found a home in Cape Coral priced just over $1 Million by a few thousand dollars.  Imagine heading out on your boat in this gulf access waterfront home and when you come back after a great day of fishing or boating you can jump right into your gorgeous pool.  That’s living the good life and what SW Florida is all about.  This home features 4 bedrooms plus a den and 3 full baths.  It is over 3,000 square feet of living area.  If you’d like to rent this home you can for $8,000- $10,000 per month.

They say SW Florida sells itself, and it does.  Once people vacation or visit SW Florida they’re hooked, but where do you go to find more information and snoop around all the homes for sale?

Simply go to www.LeeCountyOnline.com and you can search like a Realtor.  The database includes all homes for sale in the MLS and is updated every 5 minutes, so you’ll know about price changes or new listings hitting the market before other buyers.  The key to scoring a great deal is to work with an agent who is knowledgeable about the market and having access to the data.

We provide both for you.  If you have a property to sell, we can help with that too.  Many buyers must sell a property before they can purchase another.  If your property is located in another city, we can find you the best agent in that city.

You can always call us at 239-489-4042 if you’d like to speak with an experienced agent, or search away on our website until you find something that interests you.  Our team is here to help you wherever you are in the process, and on your terms.  Give us a call, you’ll be glad you did.

 

The Ellis Team at Keller Williams Fort Myers & The Islands is hiring agents– Read more and see if you have what it takes.

If you read our article on a consistent basis you’ve been hearing about a decrease in pending sales and a potential shift in the SW Florida real estate market.  Official numbers confirm a February real estate sales drop in SW Florida.

February Real Estate Sales Drop in SW Florida

Nationally existing home sales fell 7.1% in February.  Locally home sales were down 12.8%. This wasn’t a difficult prediction to make as we’ve been watching pending sales decline.  The good news is we made some adjustments to our listings in reaction to the market and we’ve been able to get many of our listings under contract in March.  Regardless of whether the market is up, down, or sideways, understanding the market and making changes can be the difference between success and riding the merry go round awhile longer.

Median sales prices are up 11.8% over last year.  They are down 6.95% from January numbers.  Average sales prices are down 1.2% from last February and down 31.23% from January.  This is why we use median price as a more valid indicator than average price because it’s a more stable indicator and less susceptible to wide variations due to a few large or small sales.

February Real Estate Sales Drop in SW Florida

It does tell an interesting story though.  While we hesitate to read too much into one month, we did see a fall-off in sales and prices in February.  SW Florida wasn’t alone as the overall US market seems to be affected as well.

We have a new metric to track which is the total dollar volume of the local market.  Obviously if sales are down it will influence this number.  When prices are rising its not uncommon to see declining sales as less people can afford the higher prices.  If you have lower sales you can sometimes make up for it with higher prices, but we didn’t see that this month.

SW Florida Real Estate Dollar Volume

Total dollar volume fell 13.6% in February.  We’ll be keeping an eye on this indicator going forward and help you track it.

It pays to know the numbers.  If you ask an agent how the market is doing most will give you an honest answer based upon how their own sales are going.  Knowing the underlying numbers is critical. If an agent is having a good month or a lousy month it may have no bearing on what the overall market is doing.  I would even go so far as to tell agents you’ll have better months if you study the market and take actions for your clients based upon what’s really happening.

New pending sales fell 12.1% in February and new listings increased 14.3%.  This tells us March and April sales might not be at 2015 levels either.  Keep in mind some January pending sales may get extended into March as new lending guidelines can extend some closings.

Buyers may have a few more choices if new listings keep rising.  We have a pretty healthy market, but as of right now, gone are the days when the seller can name the price and the buyer had to comply if they wanted to buy.  It’s a more balanced market now and sellers must justify their price.  Buyers and sellers are on a level ground in many price ranges with the seller still having the upper hand in a few ranges.

If you’re looking to buy or sell, consult a professional who can guide you through the market, financing, and closing process.  We’d be happy to help 239-489-4042 or visit our Free SW Florida MLS Search Site where you can search the MLS for free and do valuable market research.

Good luck and Happy Hunting!

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Average sales prices rose 20.4% in Lee County while median sales prices rose 14.0% in October over last year’s numbers.  This tells us there is some strength in the higher end of the market pulling the average figures higher.

SW Florida Real Estate Prices Rise as Does Inventory

If we dig a little deeper we notice that average sales prices don’t usually bump up until December.  In 2015 we started seeing the climb in September, about 2 months earlier.  The average numbers are a little more pronounced and help identify the trend in the median numbers when they occur over time.

SW Florida Real Estate Prices Rise as Does Inventory

We’ve also been telling readers that listing inventory has been down, and this has led to a rise in prices.  We know from history that inventory begins rising about October, and this year kept the trend.

SW Florida Real Estate Prices Rise as Does Inventory

Listings rose over September 8.13%, however they fell 10.3% from last year’s numbers.  So we’re seeing the typical rise in inventory we usually see this time of year, however the bar is lower and listings are down from last year.

What does this tell us?  The SW Florida real estate market should be in for a good ride.  Of course, this is predicated upon interest rates remaining affordable and the job market remaining stable.   All signs point to both.  Interest rates will climb, but forecasts by FNMA and Freddie Mac suggest modest rises.

Rising rates will affect some home buyers, but it shouldn’t disrupt the market as we have more demand than supply.  Rising rates will hurt individual buyers more than sellers overall.  If we had a high inventory market, it would affect sellers more.

Rising rates will help curtail 20% rises in prices.  It may not change the direction but it may slow the speed of increase.

We think season should be good again this year.  The weather is already brutal and we haven’t even touched December yet.  SW Florida has enjoyed rather warm weather and that is attractive to buyers who’ve just about had it with snow and blizzards.  This winter could be the straw that breaks the camel’s back and sends people our way.

Sellers, this could be your time.  All signs point to a perfect time to sell.  Low inventory and rising prices combined with a decent economy spells success.  It’s the perfect storm, but perfect storms don’t last forever.  Yes, we expect a good market going forward, but one day you won’t be holding All the cards, just some of the cards.

It’s always fun to play cards when you’re holding all the good ones.  It really comes down to skill when the cards are evenly distributed, and it’s no fun at all when you’ve got no cards.  Buyers feel like they have no cards right now.  If they wait, they’ll have better cards but prices and rates may both be higher, so waiting isn’t the best option.

Sellers may wait, and prices may be higher.  But it may take longer to sell and buyers will have more choices.  Your home won’t be the commodity it is now.  Really, we can honestly say that now is a good time for both buyers and sellers.  Waiting may cost buyers more money due to rising rates.  The banks keep that money, not the sellers.  And if a seller waits, they may not enjoy the fruits of having little to no competition.

If you’d like to search the MLS, feel free at www.LeeCountyOnline.com  Our database is updated every 5 minutes, so you can beat out other buyers to hot new listings.

Sellers, if you’d like to take advantage of this Hot market, call us at 239-489-4042.  Put our marketing and “Secret Sauce” to work for you.  We can even help you find your next home. Call us and let’s talk.

Good luck and Happy House Hunting!

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Nationally I’ve been reading stories about writers concern there may be another housing bubble forming.  Anytime prices rise people wonder when it will peak, and anytime prices fall people wonder when it will bottom.  It’s just human nature. So the question is, has the SW Florida real estate market run out of stem?

SW Florida Real Estate Market Sales Prices 2015

Latest national statistics released this week show pending sales up 3.1% despite colder weather up North.  With an improving economy and still historic low interest rates it would be hard to argue the market could cool off.

Another report suggests home prices are outpacing wages which could damper prices.  This is true.  Sometimes home prices rise faster on low supply, and when this rise outpaces wages eventually this can slow price growth until wages catch back up.  It’s not totally a supply/demand market as other economic forces will limit prices beyond simply supply.

As you can see from the attached chart, locally our prices have more than doubled in the past 4 years.  SW Florida has been on a good run, so naturally people may wonder if there is a bubble forming locally as well.

The good news is we don’t think so.  Are 25% price gains year after year sustainable?  That answer is no.  February 2015 median sales prices were up 6.5% over 2014.  That is sustainable.  Traditionally average annual price gains have been 3-5%.

It’s quite natural our prices have doubled because really they fell too far and too fast in the bust.  That was an over-reaction due to a banking crisis and banks dumping assets on the market.

Banks are lending again and they no longer have the properties to dump on the market.  Prices fell below replacement cost which means they were artificially too low.  We think prices are back to a healthy balance between replacement value, supply, demand, and economic conditions.

The future looks better for SW Florida than does the rest of the country.  The US economy is growing again and that’s good news for everyone but it isn’t growing at the pace it should be.  By all accounts Florida is, and SW Florida is leading the way.

We have below state and national unemployment averages.  Our weather and lifestyle is an alluring attraction to employers and employees alike.

Home building is back which will add jobs to our area.  All signs point to a good economic climate in Florida for the foreseeable future.  The prognosis may be for measured, sustainable gains which are always preferable.

Season was busy.  Have you noticed traffic has lightened up substantially this past week?  We’ll be watching March sales numbers when they’re released later in April.  We think they’ll be pretty decent.

All eyes locally turn to the next few months.  We’ll be watching pending sales in April and May and this will give us a pretty god sign of what 2015 will bring.  So far it’s been a good season, but we have noticed a few buyers showing indifference this year compared to years past.  This is always the case, but there is a general feeling amongst some buyers that the big gains are over and our market is back to fully priced.

Nobody is afraid prices could go backwards, but they’re not afraid prices will be 50% higher in 2 years either.  It’s causing pause and normalcy, even in a low inventory market.

If you’re a seller and you’ve been waiting, now may be a good time to sell.  Our prices are up and we don’t have inventory, Yet!  That could change one day when our market flattens out, whenever that day is.  We don’t have that crystal ball.  We just feel it’s more likely to flatten than go up or down substantially.  Better yet, let’s just keep the truck rolling at normal sustainable gains and call it a day!

Call us to sell your home. 239-489-4042  Feel free to search the MLS at www.Topagent.com

 

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Bella Casa Luxury Condominiums Fort Myers, FL

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2014 was another banner year by all accounts.  Year end sales numbers for SW Florida real estate market indicate a recovering market in 2014.  This makes several years in a row of double-digit or near double-digit gains.

For the record the official numbers suggest a 8.6% increase in median single family home sale prices in 2014, up from $174,000 in 2013 to $189,000 this past year.

Year End Sales Numbers for SW Florida Real Estate Market

Year End Sales Numbers for SW Florida Real Estate Market

Average sale prices rose 8.1% to $283,529.  Year end sales numbers for SW Florida real estate market are the median of the entire year and not necessarily the final December statistics.  One month sales figures can be deceiving and seasonal, so we take the entire year.

Active inventory fell 12.6% for the year, with inventory currently at 5,394 compared to 6,169 last year.  All year we’ve been telling readers we’re in a low inventory market.  Inventory has been rising the past few months but we’re still down significantly from last year.  Inventory always rises heading into season and typically peaks out in late January or sometime in February.  It’s hard to keep inventory when the sales begin popping in season.

SW Florida Real Estate Current Active Inventory January 2015

Each year we tell our sellers sales can be quiet up until about Jan 15-20, and then all heck breaks loose.  Our team has noticed a definite uptick in buyer calls.  2015 season looks to be on par with previous years.  We’re getting some good listing calls too.

We’re going to need some good listings at the rate these buyer calls are coming in.  I spoke with an agent this week at another firm who had an open house this past weekend and 25 customers came in.  Her business is picking up this week and she can’t keep up.

We’re doing an open house tour this week in Cape Coral.  We’ll have 3 homes open on Sunday.  We do our open houses a little bit different so buyers can see several like kind homes.  2 are direct access waterfront homes and the 3rd is located on a fresh water lake with gorgeous views.  Check out our ad in the News Press HomeFinder for times and locations.

If you look at the Year End Prices graph you can see where were are in the recovery process compared to the peak in 2005.  We’ve got some ways to go before we reach that plateau.  If you look closely you can see the price rise in 2014 slowed just a bit.  Nobody can say with certainty what prices will be next year.

All I know is last year we predicted another year of gains, and we should have more gains this year as most signs look good going forward.  The rate of gain may slow, and that is a good thing.  It’s unhealthy to have double digit gains year after year.  Average gains are usually 3-5% per year and we’ve been beating that.

Rising interest rates usually temper buyer buying ability.  Sometimes it spurs more activity from buyers who want to get in at lower costs.  We’ll keep our eyes on interest rates in 2015 along with some other key variables.

In the meantime, enjoy this wonderful market.  If you’re a seller, now is the time to call the Ellis Team 239-489-4042  If you’d like to search the MLS, check out www.TopAgent.com  You can search the entire MLS, or feel free to speak with one of our friendly agents.  Be sure to read all our market updates on our Blog which can be found on our website.

Read last Week’s Article Bella Casa Luxury Condos in South Fort Myers

Good luck and Happy House Hunting!

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By Brett Ellis

RE/MAX Realty Group – Ellis Team

Fort Myers Real Estate Agent

7910 Summerlin Lakes Dr

Fort Myers, FL 33907

239-489-4042