Conventional Loan Limits Increase to $548,250 in Lee County

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Good news for home buyers and home sellers in Lee County.  Conventional loan limits increase to $548,250 in Lee County.  The previous loan limit was $510,400.  Because sales prices have increased this past year the loan limit was increased.

Conventional Loan Limits Increase to $548,250 in Lee County
Conventional Loan Limits Increase to $548,250 in Lee County

If a buyer wished to finance over the $510,400 it made the loan a jumbo loan.  The interest rate may have been higher and the underwriting guidelines in some cases could be stiffer because jumbo loans are not insured by FNMA or Freddie Mac.

Conventional Loan Limits Increase

The increase to $548,250 means a buyer can pay more for a home and still meet conventional loan guidelines.  Interest rates are around 2.5% for people with good credit.  This eases down payment pressure for many buyers who need a conventional loan.

Let’s say a buyer wanted to buy a home for $600,000.  Under the old guidelines the buyer would have had to put $89,600 down to stay in a conventional loan.  Today the buyer could put down $51,750 and still meet conventional guidelines.  That would be 8.6% down payment which is acceptable.

With conventional loans the buyer can put down as little as 3%, but 5% is more realistic for most people.  The PMI rate (Private Mortgage Insurance) declines the more a borrower places in down payment, and it disappears entirely if buyers put 20% down.

Buyers Can Afford More Home

The bottom line is buyers can absolutely afford more home today than they could last year.  Down payment requirements are less and interest rates are less.  This is good news because prices have been going up, so this alleviates that pressure.

This is one more reason we believe there is still fuel to power prices higher.  Of course, low rates will not help if the economy crumbles or demand falls.  We do not see any signs of demand falling.  In fact, Florida is more attractive than ever to northern buyers in high tax states.  Companies are leaving northern states and relocating to Florida, so it is not just remote workers making the switch.

Conventional loan limits increase benefits sellers as much as buyers because more buyers now qualify for the same property.  We already have multiple offer situations on many properties, and the conventional loan limits increase may add to the demand for properties priced $535,000 and higher.

In the coming weeks we will report final 2020 real estate market numbers.  To date we have official numbers through November, and we expect 2020 to end with a bang.  Traffic on our roads is busy, and our team has been busy working with buyers from all over the country attempting to purchase a home.

By all accounts, 2021 should be another great year.  The only thing that may hold it back is lack of inventory.  Sales could decline simply because we do not have enough inventory.

Considering Selling?

If you are considering selling, please call Brett or Sande Ellis 239-489-4042 Ext 4.  Now may be the best time.  Our marketing is reaching local and out of town buyers, and they are making offers.  Our team is working harder than ever for our clients. We are getting sellers who list with the Ellis Team top dollar.  It is always more fun to sell when we attract multiple buyers for your home.  Sellers can sit back and select the best offer, but that is only possible when you saturate the market.  Advertising locally and nationally is the key.

Or you can check your home’s value instantly at www.SWFLhomevalues.com Prices are changing by the week so it pays to keep up.  Is there a price you would sell your home at?  If so, perhaps we should talk.  Always ask for Sande or Brett Ellis.  There is no substitute for experience.

January 2021 SW Florida Real Estate Market Update

 

Real Estate Sales Prices Rose Over 20% in Last Year

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Real estate sales prices rose over 20% since last November in Lee County.  The median sales price last year was $262,500.  This year it was $319,150 for a 21.6% gain.  Average real estate sales prices last year were $335,357.  This year it stands at $422,452.  That is a whopping 26.0% gain.

Real Estate Sales Prices Rise over 20%

October year over year numbers saw similar gains, so it was not a one-time anomaly.  If you read our articles regularly you know that we have talked ad nauseum about the reasons the Florida real estate market is on fire.

How Long Will it Last?

The real question everyone wonders is how long it will continue.  We believe there is good reason for this market to continue for a while.  Interest rates are low, and we expect them to stay low. Oil could rise with new energy policies by a new administration.  Typically, when oil rises it is inflationary and interest rates rise as well, but that may not happen for a few years.

Rising oil prices could eat into consumers wallets which might limit how much they can spend on things like housing.  This could tamper the positive effects of low interest rates, but only to a degree.  Florida still stands to win big because companies are seeking low tax states.  Companies and residents are fleeing states like New York, New Jersey, Illinois, and California in droves.

Making matters worse, as residents flee, these states are raising taxes on the residents who are left to make up the shortfall.  It is a vicious cycle, and at some point, it is game, set, and match.  Florida sits in an exceptionally good position going forward.  You have seen the benefits the last 4 years and it is possible this may accelerate the next four years.

How to Win in Fast Paced Market

So how do buyers and sellers win in such a fast-paced market?  Experience!  Simply put, you must work with an experienced agent who has been through up and down markets.  Experienced buyer agents know where to find inventory, even when it is not on MLS.  Sometimes there is hidden inventory that is sold before ever hitting the market.

Other times it is having relationships with builders who call the top teams when a deal falls out, or when a new inventory home is about to become available.  Lastly, in a world where speed wins, technology can play a crucial role.  Having all the listings on a website updated in real-time is crucial.  Ours does. www.LeeCountyOnline.com  Many buyers are surprised to learn that the big portals do not have all the listings, and sometimes the data is old.

Sellers Benefit Too

Sellers benefit from experience too.  Multiple offers are good, but taking the wrong offer is not.  Experienced listing agents help weed out the good offers from the mediocre.  The highest price is great but evaluating the most likely to close is a skill onto itself.  Every offer is a gamble, but you can have the odds in your favor with some knowledge, skill, and investigation.

For instance, we call the loan officer if we have any question at all about the buyer’s ability to close.  We also look for the way items are worded in the contract which can yield clues.  Sometimes contracts are craftly worded to disguise a hidden contingency.  The contingency is not revealed because they feel it would hurt their chances of getting their offer accepted. This is exactly why sellers need the sharpest agent they can hire.

If you are looking to buy or sell in SW Florida, always call the Ellis Team at Keller Williams Realty.  We have experienced buyer agents on our team ready to put our skills to work for you.  Sande and Brett Ellis handle the listings on our team, and nobody is more experienced than we are.  We would love to help you sell your home and get you to your next destination.  You can reach Sande and Brett at 239-489-4042 Ext 4.

Good luck and Happy New Year!

Low Housing Inventory Levels Driving Prices Upward

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Low housing inventory levels in SW Florida are driving prices upward. Buyers struggle to find available homes in their price range and it is happening across the board.

Typically, only a few price ranges get hot when the market moves.  Later, more price ranges may catch fire, or the market may run out of steam before all price ranges are affected.  What we are witnessing here in Florida is an all-out assault on inventory levels, and it is affecting pricing.

Low Housing Inventory Levels Driving Prices Upward

Low Housing Inventory Levels Driving Prices Upward

If a contract falls out for some reason it may be sad for the seller, but in many cases, we put property back on the market and raise the price and it sells again.  In the time the home was tied up and off the market it still appreciated.

Some buyers get scared and begin to doubt their decision after they were the winning bidder.  Perhaps they question if they paid too much, or they have unrealistic expectations about the home inspection.  Others get nervous about HOA costs or insurance costs and find reason to talk themselves out of buying. For whatever reason, they panic and walk.  Buyers need a reassuring hand to tell them it is OK to buy.

What these buyers do not realize is when they walk there are dozens of other buyers right there to scoop it up.  Buyers from last year are kicking themselves they did not purchase and are amazed at what has happened.  Their agent probably told them we had a great market.  Inventory levels were going down before the pandemic hit.

Record Low Supply

Back in October 2020 our months supply stood at 2.15 months.  We had never seen it that low, and yet we knew it could go lower.  Today it stands at 1.77 months.   Today everything below $600,000 is below 2 months supply.  Back in October it was everything below $300,000.  Buyers are being forced to go higher or not get a home at all.

Interest rates are expected to stay low through 2023.  There is still room left for more appreciation.  Sellers should be cautious though, because holding out for higher prices on the selling end may cost you on the buying end.  If what you are selling today is going up in value, what you plan to purchase tomorrow may also be rising.

Florida is sitting in a good spot.  Not only do we have sunshine and a great economy, we also have low taxes and freedom.  Businesses are not shut down.  The vaccine is out and relief to people’s health is on the way.  What can never be fixed are all the business that shut down and closed forever.  Many businesses up north are shutting down and opening down here before they are bankrupt forever.  Florida is gaining residents from northern states, and it is adding to demand with little supply.

We see the Florida real estate market poised for another great run in 2021.  More sellers may decide to list and take profits, and that would be a good thing.

If you are a seller, we have some resources for you.  We have neighborhood market reports that will show you all the properties active, pending, and sold along with price, $/Sq Ft, and photos.  Yes, photos of the sold homes too, so you can see how your home compares.

Instant Price Analysis

You can also check out www.SWFLhomevalues.com It is a fast and Free way to get your home’s value.  While it is fairly accurate, we like to validate it in this fast-changing market.  Sometimes even the computers cannot keep up with the market. Low housing inventory levels might mean your home is worth more than you think.

If you are looking to buy, www.LeeCountyOnline.com is your best bet.  It has all the homes listed, and it is updated in real-time.  That is important in a fast-moving market like this.  You want to beat out other buyers to hot new listings, or listings that suddenly come back on the market.

Always call Sande or Brett Ellis 239-489-4042 Ext 4 for selling advice.  We’d love to help you.  We have a team of buyer specialists if you are looking to buy who can help guide you.

Good luck and Happy Holidays!

See last week’s article “Confusing Statements Lenders Make to Buyers and Agents“

Confusing Statements Lenders Make to Buyers and Agents

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The other day I received a call from a lender saying “Good news, the loan is approved.  We are now ordering the appraisal.”  If they left the same message for the borrower, they might think the loan was a done deal.  The truth is, the loan has only begun, and it is confusing. Let’s talk about confusing statements lenders make to buyers.

Confusing Statements Lenders Make to Buyers and Agents

Confusing Statements Lenders Make

Just recently a buyer quit her job because the lender told her she was approved for the mortgage.  On the day of closing the lender reverified employment and found out she left her job 3 weeks ago.  Her family lost the house and has no place to live and the seller must put their home back on the market and find a new buyer.

These are true stories, and they happen more often than you think.  Real estate agents can tell you stories about deals they’ve lost because the buyer did something after pre-approval to cause their loan to be denied.

When you hear the words loan approved, or clear to close, the deal is not closed.  Many lenders have a final compliance department that catches new credit items, or employment issues up until closing.  I even saw a loan pulled after closing.  The buyers had clear to close and closing instructions were sent to the tile company.  The wire never arrived from the lender because they found something right after signing.

10 Helpful Tips

  1. Do not buy a new or used car until your home loan is closed
  2. Do not purchase furniture for the new home or home improvement items on credit card prior to closing on your new home
  3. Never co-sign a loan if you plan to buy in the next few years, and certainly do not do so while you are purchasing a home
  4. Keep credit card balances low through the closing
  5. Do not cancel credit cards unless the lender asks you to. Believe it or not, established available credit can help you
  6. Always pay your credit on time. If there is a 15-day grace period, that is not considered on time.  Pay your bills by the due date, not by the penalty date
  7. Be careful with forbearance. Even if politicians say using it will not hurt your credit, be cautious, and only use that if you really cannot pay your mortgage
  8. Do not buy items on impulse simply because the store will finance it for you. If you cannot afford to buy it now, do you really need it? The item you buy today may block the big things you need in the future
  9. Do not switch jobs just before purchasing a home, or during the process
  10. Do not purchase a home while going through a divorce unless your attorney says it is ok

Loan Is Not Done Until Funded

By no means is this a complete list.  For some reason lenders terminology has changed over the years.  Loan approvals have so many conditions they are not really approvals until all the conditions have been removed.

We mention these 10 items because we have seen loans denied or deals fail from all 10 of these items.  Agents assume all buyers know these things, and the truth is they do not.  Some inexperienced agents do not know these things.  How could they?  You only learn through experience.

Remember, there is no substitute for experience.  Always hire the most experienced Loan officer and the most experienced Realtor you can find.  Experience can help you avoid costly mistakes on both the buying and selling end.  If you think hiring a professional is expensive, wait until you hire inexperienced people.  That gets expensive.

To search the MLS like a pro, check out www.LeeCountyOnline.com It’s better than the national sites and has all the listings in real-time.  Or call the Ellis Team at Keller Williams Realty 239-489-4042.  Our team will be glad to help.

Selecting Best Multiple Offer Tips From a Real Estate Pro

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Many properties listed today in SW Florida are receiving multiple offers.  How would a seller know which offer to take?  Today we offer our selecting best multiple offer tips for sellers.

Selecting Best Multiple Offer Tips From a Real Estate Pro

Selecting Best Multiple Offer

It is logical to assume the highest price would be the best offer, but that may not always be the case.  Of course, a seller wants to maximize how much they can get out of the home.  Of equal if not greater importance is the likelihood the buyer can perform.  It does no good to accept a higher offer that is unlikely to close.

It is important that the listing agents knows all facts about the home.  For instance, some homes may not qualify for an FHA or VA loan.  There could be some insurance uses, or property condition issues imposed by the lender.  Some buyers may not be able to cure deficiencies placed by their lender, and it has nothing to do with the buyer.

Purposely Bidding Up Home to Win Negotiation

Some buyers purposely drive up the price with their offer banking on the fact the lender will knock it back down with the appraisal.  If you are selecting best multiple offer based solely on price, you might be surprised later if the home does not appraise.  A buyer may have the option of buying the home above appraised value provided they are putting down enough to cover the difference for the loan they have applied for.

For instance, let’s say a buyer is putting 50% down.  Chances are they are going for a conventional loan needing only 20 or 25% down.  Because they are putting more than that down, they already have the difference if the home does not appraise by a little bit.  Now if the home only appraises at 50% of purchase price you would have a problem because the buyer would not have anything down.  Banks base their loan to value ratio off the value, not the purchase price.

Obviously, an all-cash buyer does not have appraisal worries, unless they add an appraisal contingency.  In that case, the home must appraise for purchase price or buyer is not obligated to complete the purchase.

Remove Appraisal Contingency

Back in the foreclosure crisis buyers were bidding up foreclosure deals and getting financing for the new purchase.  The seller (foreclosure bank) wised up and started adding language that if home did not appraise the buyer would be responsible for the difference.  This basically stopped buyers from outbidding each other just to score the deal.  Most of those buyers could not pay the purchase price because the new bank would not lend on it.  The seller would have been better off taking a lower bid with a buyer that could actually complete the sale versus buyers that could not.

The condition of the home may influence which buyer’s offer to take.  Knowing that a certain type of loan may not accept certain property conditions may save you from going down the road with the wrong type of loan.  All of this takes knowledge and experience, and therefore it pays to hire the best Realtor you can find.  Hiring the wrong Realtor can cost you thousands of dollars, even in a hot market.

Full-time agents that have thousands of deals for experience have seen a thing or two, and therefore know how to deal with issues before they become problems.  And when problems do arise, and they inevitably will, possessing that knowledge and experience pays off in solving the problem.

Bottom Line

The bottom line is an experience agent is more likely to get you top dollar and keep your deal together than an inexperienced agent, no matter how much determination they have.  There is just no substitute for experience.  This is not the market to experiment with an inexperienced agent.

If you have a home to sell, call Brett or Sande Ellis 239-489-4042 Ext 4.  Brett and Sande have sold over 5,000 homes, and we know a thing or two.  If you are looking at purchasing, our team of buyer agents work directly with Sande and Brett.  Our knowledge helps you structure the best offer.  Buyers can search the MLS at www.LeeCountyOnline.com   Sellers can visit www.SWFLhomevaules.com to get your home’s value online instantly.  Let us know if how we can help you!

October Real Estate Sales Prices Up Nearly 20%

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It is no surprise to anyone buying or selling in SW Florida that October real estate sales prices were up nearly 20% year over year.  We have written a great length each week about the factors influencing the market.  Let’s look beyond the headlines and unpack what is really going on and see if we can get a gauge into the future.

October real estate sales prices up nearly 20%

Median October real estate sales prices were up 18.8% while average prices were up 22.6%.  That is phenomenal growth. I would be a bit skeptical if just the average price was higher as a few high dollar sales can skew that statistic.  The other thing I look at is there a trend.  This was not a one-month phenomenon.

This is the 3rd straight month we have seen 20% gains in average price.  It is also the 3rd straight month median price has risen 16.5% or more.  That is telling us this pricing pressure is real and demand is truly outpacing supply.  This is not a joke.

New listings were down 2.5% in October compared to last year while new pending sales were up 38.8%.  This is putting a further drain on available inventory and making it harder for buyers.  Buyers are coming to town and finding few choices in their desired search for ranch properties for sale. In many cases buyers are having to settle just to score a home.  It does beat being homeless and someday down the road they will be able to trade for a home they like better.  The goal today is to find a home that at least suits their basic needs.

Pending inventory was up 61.9% in October.  This is an indicator that closed sales in November and December will be high.  Even though sales were down 14.1% in April and 39% in May, sales are up 8.3% for the year.  If we have monster sales in November and December, we could be in for some record numbers.

Perhaps next week we will dive into inventory by price range.  Suffice it to say that all price ranges today have less inventory than last year.  Every single range.  Let that sink in.  This market rally is across the board and not limited to hot spots.

The Ellis Team has done an excellent job counseling buyers what it takes to win a bid for a home.  Buyers do not want to pay more than they must, but they also do not want to keep missing out on homes either.  Getting their 4th or 5th choice is not as much fun as getting their first choice.  The sad thing is because all the buyers are clustered around the best listings, when one goes, they all move to the next best listing.  The irony is, sometimes buyers end up paying more for #2 than they would have for #1, because now there is one less choice once #1 goes off the table.

Working with experienced agents like the Ellis Team at Keller Williams Realty not only can help guide you into scoring the best home for you, but we can save you money as well.  We have access to zero lender fee loans that may save you thousands of dollars cash at closing.  These savings require less money at closing, or they allow you to buy more home because the cash outlay is less.

Talk to a friendly buyer specialist on the Ellis Team and ask about savings we can pass along to the buyer. To search the MLS like a pro, visit www.LeeCountyOnline.com  It has all the listings, and it is updated instantly so you will always have the latest listings.  In a market like this, speed and accuracy wins.

Sellers, we have good news for you.  Brett and Sande Ellis are experts at marketing your home to local and out of state buyers.  This creates more demand for your home and in turn gets you a better price.  If you would like to talk to us about selling a home, call Brett or Sande Ellis 239-489-4042 Ext 4. Or visit www.SWFLhomevalues.com

Always Call the Ellis Team at Keller Williams Realty.  We love helping people, and market knowledge matters more than ever.

Are you ready for a career change? Find out of a career in real estate might be right for you.

Housing Market Indicators Flashing Full Speed Ahead

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Recent closed home sales have housing market indicators flashing full speed ahead, so what could cause that train to slow?  One of the best ways to judge a market is supply and demand, and yet supply is the one thing that may hold this market back.

Housing Market Indicators Flashing Homes Closed
Homes closed in SW Florida real estate market through October 2020

Housing Market Indicators Flashing

As you can see from the homes closed graph, 2020 home sales are outpacing the previous four years.  The thing is, the previous four years were good years in real estate, so 2020 is shaping up to be a phenomenal year.

What may limit a record number of home sales in 2021 could be supply.  If we do not see more listings entering the market the SW Florida real estate market will simply run out of fuel.  We believe however that more sellers will decide to list their home in 2021 than 2020, for a few reasons.

More Listings Coming?

The first reason is profit taking.  Home prices are up 18.8% over last year for October.  That is an unbelievable month over month price gain.  Each year sellers assess their situation.  One trend we are seeing are rental homes suddenly becoming available.  Typically, the landlords have not raised their tenants rent like other landlords because they have had years long tenants. Sometimes it is hard to raise the rent on longtime tenants, to the next easiest thing to do is sell the property.  Either way the tenant ends up moving unless a new buyer wants to keep a tenant.

The second reason we may see more homes on the market in 2021 is covid-19 relief.  Many sellers did not want people in their home in the middle of a pandemic.  As therapeutics and vaccines are released, this may change.  Whoever thought herd immunity is a term we would use in real estate or any other faction of society?

As we approach herd immunity, more people will be comfortable returning to a normal life and buying and selling real estate is a part of that return.  Some people put off their life plans for a whole year.  This may add to pent-up supply hitting the market in 2021.

Interest rates are low and should remain low for the balance of 2021.  We may have enough housing supply to get us through a few more months.  Last month we had 1,593 new listing come on the market, while 1,770 went pending.  We have a little over 2 months supply of inventory which is as low as we have ever seen it.

We believe we will see more listings enter the market in January, but who knows for sure.  Once Covid numbers abate and as the vaccine is released, we think more people will be comfortable placing homes on the market.

Sellers Looking for Top Dollar?

Sellers wishing to sell for top dollar may want to call us before other sellers enter the market.  Supply is limited and demand is high.  We have buyers coming here from out of state markets where their business and life is restricted.  We know how to market to these buyers and achieve top dollar for our sellers.

Nobody can time the market perfectly. If we could venture a guess, selling before May 2021 may be a great idea.  Many experts are predicting herd immunity by May.  If our theory is correct about sellers holding off for Covid reasons, this timeline makes sense for maximum leverage.  Of course, economic factors will be in play, a new administration taking office, new tax policies, etc.  Many things can affect the real estate market and the economy.

The bottom line is right now is a great time for home sellers.  We think it should last awhile as interest rates are expected to be low through 2021.  As usual, we will keep watching housing market indicators for you.

To find out your home’s value go to www.SWFLhomevalues.com or call Brett or Sande Ellis 239-489-4042 Ext 4.

Good luck and Happy Home Shopping!

Nationwide Local Neighborhood Updates Where You Live

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The Ellis Team is introducing nationwide local neighborhood updates.  It is free and it offers some features you will not find anywhere else.  We will talk about some of the features and how it works here.

Nationwide Local Neighborhood Updates Neighborhood Trends

One of the features is a neighborhood trends report.  People like to see what is going on in their neighborhood.  We have included a snapshot of basic summary statistics for Reflection Lakes in Fort Myers.  Users can click to explore the neighborhood and more features open.

Some of the added features include local transit times to places of interest the user chooses.  Let’s say a couple is searching for a home.  The husband works one place, and the wife works in another.  They can add both locations so they can see how far each commute is from that neighborhood.

Other features included a list of nearby schools as well as an interactive map that shows places of interest.  Users could select highlights, nightlife, shopping, fitness, arts and entertainment, groceries, etc.  When you select your interests, the interactive map displays those things you have selected and placed them on the map.

Let’s say you selected groceries.  The map will show all the grocery stores relative to the neighborhood you have selected.  The same is true with any category.

I particularly like the nearby neighborhoods information and the available homes for sale.  Others will like the local reviews of each place.  The neighborhood report does an excellent job of compiling compelling data and displaying it in a useful way for consumers.

The best part is this website http://ellisteam.kw.com works anywhere in the country.  Users can select multiple neighborhoods.  For instance, a user may own a home in SW Florida and one up North.  It is easy to add both neighborhoods, and once selected each neighborhood has their own tab and data, all in one place.

We can email this information out every two weeks, or monthly.  This is particularly helpful, so you do not have to remember the website.  Just click on the link and it will take you to the report when it is updated.

The Ellis Team is working extremely hard to bring consumers tools that are useful, and work anywhere.  We have strong partners in other states that can assist with your real estate needs wherever they are.  Providing useful information that works anywhere benefits customers from out of our area.  This benefits local sellers because we can now provide nationwide local neighborhood updates.  Out of state buyers are more likely to use us, and when they do their interest in SW Florida rises.

We have some customers that are selling here in SW Florida and moving back to family or a job relocation.  These tools provide tremendous data in separate locations.  Providing this data makes the Ellis Team a one-stop shop no matter where a buyer is buying or selling.  We will not be their agents out of state.  That takes a separate license.  What we can be is their guide to selecting the best agent no matter where their interest is, as well as great neighborhood data.

The Ellis Team still has our local websites, like our home valuation tool www.SWFLhomevalues.com and our local property search www.LeeCountyOnline.com Nothing is going away.  We are bringing more tools and more value to consumers.  When we meet in person or via Zoom we can show you powerful data.  This data will help you make better decisions, and it’s fun too!

We look forward to helping you with your real estate needs.  If you have a home to sell, please call Brett or Sande Ellis 239-489-4042 Ext 4.  We are easy to talk to and we can help you with your needs, both in SW Florida and anywhere in the country.

Happy Thanksgiving!

See last weeks article “Biden Tax Plan Benefits Florida Real Estate Market“

Biden Tax Plan Benefits Florida Real Estate Market

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I have been reading several articles on how a Biden tax plan benefits Florida real estate market.  Biden’s tax plan has many parts to it, some of which benefit Florida homeowners and some of which hurt.  As I am writing this article neither candidate has been declared the winner, and we will not go into that for purposes of this article.  We are simply passing along information should Biden eventually be declared the winner.Biden Tax Plan Benefits Florida Real Estate Market

One article suggests the Biden tax plan benefits Florida real estate market by creating an incentive for residents to leave high tax states more than they already have.  Biden’s tax plan could create a marginal tax rate exceeding 60% in New Jersey, California, Hawaii, and New York.  As these states suffer shortfalls, they will be under more pressure to raise rates even higher.  It is a vicious cycle.  Many high tax states are hemorrhaging residents. As they lose residents, they must either cut spending or raise more taxes on the fewer that are left.

Vulnerable States Losing Residents

Another article mentions Illinois and California as particularly vulnerable.  Biden’s tax plan calls for an increase in capital gains rates as well as several new taxes.  One such tax is raising the amount many earners pay on social security.  Another tax is capping deductions for some earners, as well as raising the top income tax rate from 37% to 39.6%

When you factor all these new taxes in, the theory is people will flee high tax states and move to lower tax states where their income is taxed less by the state.  It is not much theory as we have already seen it the past 4 years.  The writers of these articles speculate it will intensify and speed up.

At this time, we still do not know who will control the Senate and how those votes will go.  All we know is that if Biden wins the election, there will be upward pressure.  Some of these taxes will hurt real estate, and yet the Florida real estate market could still be a net winner in that we may gain more people interested in Florida than we lose in tax penalties.  The same cannot be said for other states, but we focus on the SW Florida real estate market.

Target Marketing High Tax States

In 2020 the Ellis Team has sold many properties to buyers from high tax states.  In fact, we have several looking right now and making offers.  Our marketing has focused on those areas and we expect that to continue.  When our team lists a home, we advertise it where we think the buyers are.

We have many local buyers and even more out of state buyers.  If you get lucky out of state buyers come to you based on brand, reputation, or referral.  If you are an aggressive agent you go find the buyers through advertising, and that is what we have done.  We do get a lot of referrals from out of state agents. Many agents calls us because of the Keller Williams name.  We appreciate all of that and that is why we are at the company we are with.

What is particularly fun is selecting certain markets you believe contain buyers who might move to SW Florida and combine that with our artificial intelligence that shows us where buyers are coming from and take out ads directed at those buyers.  When the leads start to flow in off those ads it feels a lot like finding a good fishing hole nobody else knows about.  Never ask a fisherman where their best fishing hole is and expect a straight answer.  Conversely, never ask a top agent who is using this advanced technology to locate buyers to tell you exactly where they are coming from.

Never Ask a Fisherman

A fisherman might tell you which lake the fish are in, but never the exact spot.  A top agent might tell you which states buyers are coming from, but not the exact formula to advertise to them.

If you have a home to sell, always call Brett or Sande at the Ellis Team 239-489-4042 Ext 4.  We have buyers and can help you get Top Dollar.  We do not know who the next president is yet, but we do know how to sell your home either way.  Or visit www.SWFLhomevalues.com for an instant and Free valuation.

Pre-Election Dollar Volume SW Florida Real Estate Market

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We are writing this article the morning after the election.  At this time, it is unclear who the next president of the United States will be or when we will know.  What we do know are the real estate statistics pre-election.  Today we decided to focus on pre-election dollar volume for the SW Florida real estate market.

Pre-Election Dollar Volume SW Florida Real Estate Market

Pre-election dollar volume measures the total dollar volume of sales in a defined time period.  We calculate this by adding up all the sales volume in each month.  September 2020 SW Florida saw $564.8 million dollars in total dollar volume.  That is a whopping 63.4% increase over 2019 numbers which were $345.6 million.

Pre-Election Dollar Volume up in Summer

Pre-election dollar volume started taking off back in June.  Keep in mind we have been in the middle of a pandemic and we are still eclipsing 2019 numbers.  2019 is the benchmark, and we know that was a good year in real estate in SW Florida.  June was only up 1.5%, but it started a trend we will look back on as a defining moment.  July posted a 20.1% increase in pre-election dollar volume in real estate sales.  Along came August which blew June and July away.  People thought the market could not get any stronger, and September would prove them wrong.

New pending sales in September are 58.2% higher than 2019.  We know you must have a pending listing before you can have a closed sale.  New pending sales are a leading indicator of what may happen 1-2 months down the line.  Because many home loans are taking a minimum of 45 days to close, many of the September new pending sales will close in December. August new pending sales were up 42.4%, so we believe October official numbers when released will show increases as well.

We may not see a rise of 63.4% like we saw in September, but October numbers should rise compared to 2019.  We have seen excellent demand.  One thing that could limit sales would be limited supply.  The other factors that will influence the market going forward is how people feel about the eventual winner, and the makeup of congress.

Will economic policies spur growth?  How will northern states react to the winner, and will they continue moving to Florida?  Will that pace speed up or slow down?  How many people will decide to list their home post-election?  All these factors will play a role in the total dollar volume moving forward into 2021.

Waiting on a Winner

Once a presidential winner is determined, it may take people awhile to digest how they feel about it and how future economic, social, and tax policies will affect homeowners.  This may vary by state and county.  We have seen a migration away from high tax states to low tax states. We do not know if other factors will come into play post-election.

It would be impossible for anyone to predict how the SW Florida real estate market will fare going forward.  Heck, as of today writing this article we cannot even tell you who the president will be or who will control congress.  We can report that pre-election dollar volume was excellent in SW Florida and on the rise.  It should remain great for another few months.  Other indicators have been excellent as well.  Right now, SW Florida has an exceptionally good real estate market.

If you would like to talk about selling your home, please call Sande or Brett Ellis 239-489-4042 Ext 4.  We can discuss your options, how the overall market is doing today as well as your neighborhood and put a game plan together for you should you decide to sell.  Or, you can always get an instant value of your home at www.SWFLhomevalues.com It’s instant and easy.  We can validate the online price in person if you are considering selling.  Your choice.

Always call Sande or Brett Ellis at the Ellis Team Keller Williams Realty! We’re never too busy to talk to you.  Good luck and Happy Selling!

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