We get asked this all the time, Is it time to buy or sell in SW Florida.  We believe it’s time to buy.  It is not a good time to sell unless your circusmtances dictate a need to sell.  We’ll elaborate.

Over the weekend we were featured on MSNBC about the national housing market.  We told their real estate expert, John Bendall, Fort Myers was a good place to buy.  Prices have retreated and there are some great buys now.

We recently sold a lakefront pool home in Hawk’s Preserve for about $265,000 with the seller paying closing costs.  Our buyer was elated as this same home 2 years ago was selling for well into the mid $400’s.  This buyer has approximately $200,000 more buying power.  They’re able to get a 2,400 sq ft of living area home, with a pool, and a gorgeous lake view for their family of four.  They could not have done this even a year ago.

Affordablity is back in our market says this real estate website by Rainier Nanquil.  In addition to shelter, the home is now once again a long-term investment, a financial asset.  Homes have always been an asset, but not necessarily a good one when investors were paying Top Dollar and the bottom fell out.  Our market was not healthy when short-term investors came in and bought up much of the market with the intent of flipping to someone else at a higher price.  We saw much fraud in the process, and the end-user was hurt because they couldn’t afford to buy at the inflated prices.

Fast forward to 2007.  Much pain has occurred, and many investors have either sold, rented their home, or faced foreclosure.  We have several segments that have rebounded nicely, and we can say with confidence that some sectors bottomed awhile back.

Just because some homes bottomed, and in fact median prices have been on the rise 5 out of the last 6 months, we can’t say that the entire market is healthy just yet.  We still have large degrees of inventory of condos on the market, and many subdivisions are still vacant and primarily investor owned.  These will take time to balance with today’s market.  Make no mistake, our market is healing itself right now, and the sectors that still need healing will continue to do so.  With healing comes pain.  Many have felt the pain and dealt with the situation, others still must come to that realization.

Regardless, it is much better to be a buyer in this market than a seller.  It’s also wise to work with a Full-Time Realtor experienced in the ups and downs of the SW Florida real estate market.  Good buys are out there, and you can do well.  There are still some over-proced properties on the market, and you don’t want to purchase one of those.  Always get with a qualified and professional full-time agent to guide you through the buying process.

We’ve always said, you make money in real estate on the “Buy”, not the “Sell”.  Make sure you buy right.  Believe it or not, the best priced properties are selling, and many have multiple offers.  Those are the ones you want to jump on, and you may even pay full price because it’s a good deal.  The over-priced properties you must offer less, and in fact you might be wiser to just pass on until the seller gets realistic.

The SW Florida real estate market again shows some positive signs, as median single family home prices in Fort Myers / Cape Coral area increased 5.67% in April over March.  March posted 4.65% increase, which means median prices have increased about 10% since February 2007.  Median prices are definitely on the rise, as illustrated by our SW Florida Real Estate Month Over Month Graph.

Sellers should be careful not to over react to this positive news, as it is only one indicator.  The entire breath and scope of the market isn’t moving upward, simply the median price.  We knew the median  price would be the first to stabilize.  Median price is simply a measure of half the homes selling for more than a certain number and half selling for less than a certain number.  Many homes are selling, but only the best priced homes are selling, and homes priced above the market will sit on the market.  Median price is just one indicator.

Another indicator is how many homes are selling.  Home sales fell from March levels, which is typically the case until the market heats back up again in the summer.  Our SW Florida Real Estate Homes Closed Graph illustrates this point. Single family home sales were down 37% from last years levels, and down almost 10% from March 2007 levels.

As you can see from our SW Florida Real Estate Sale Prices 2005-2007 graph, sale prices have caught last years levels.  This is important, because the media will now start reporting prices are edging higher.  The more accurate indication is month over month changes which have been rising 5 out of the last 6 months, but that was lost in the reporting because sale prices were down against last year, which seems to be the media industry standard.  Now that we’ve broke out of that mold, which we predicted would happen sometime mid-year 2007, the media will start reporting prices are up, even though they’ve been going up for months.

The overall direction of the market is encouraging, but all the stars are not in alignment yet.  What we’d like to see is inventory levels  decreasing more than it is, sales increasing over last years levels, and prices stabilizing across all market segments.  This hasn’t happened yet, but it will in time.  The market is cleansing itself.  We expect a gradual improvement in numbers throughout the balance of 2007 overall, even though some segments will continue to struggle into next year.  Particularly hard hit will be new subdivisions where investors still make-up a majority of the homeowners.  We need end users to stabilize this market, and that is occurring as pricing has come down significantly.

Condo sale prices were down 24% in the Greater Fort Myers Cape Coral area from $322,500 last April 2006 to $244,100 April 2007, and the number of sales were down 14%, from 259 last April 2006 to 223 April 2007. Condo sales were actually up slightly from March levels, 223 in April 2007 Vs. 221 in March, and prices were down from $250,800 in March 2007 to $244,100, a 2.67% decrease.

Statewide, single family home sales were down 26% and median prices were down 3%, so Fort Myers and Cape Coral did better than the state average in price and worse in sales. Statewide, condo sales were down 19% and median condo sale prices were up 3%, Fort Myers Cape Coral did better than the average for numbers of sales and worse than average in median sales prices.

You can see how Fort Myers and Cape Coral single family home sales did this year Vs. last year and compared to the entore state.  Also view Condo sales in Fort Myers and Cape Coral report.

Suffice it to say the Ellis Team goes on it’s fair share of listings appointments in SW Florida, and we are in tune with what’s on the minds of home sellers.

Some sellers are logically tuned in to what’s going on in the SW Florida real estate market, some are in shock and awe, especially the ones who bought in 2005, some are happy and accept it is what it is, and some are downright fearful as they are in danger of losing their property.

While the Ellis Team goes on many listing appointments, we only take a small percentage of listings.  We only list properties when we feel we can help the seller.  In order for us to do that, the seller must price the property in-line with today’s market conditions, and must be willing to accept out expertise and advice.

Some sellers decide they’re going to sell for a certain price because that’s what they "Need" out of the property, or that’s what it’s "Worth" and somebody should just pay it.  When confronted with the facts, we’ve even heard some sellers say, "OK, it may not be worth that, but that’s what I want, and can’t you just find someone from up North who doesn’t know any better to pay it?" We explain that we actually have to sell a home three times in order to have a successful sale, so we better price it right upfront.

1. It better be priced correctly in MLS, or other agents won’t even show the property as they have a choice of thousands of properties to choose from when showing their customers, and they usually picked the Best values.  If your home isn’t priced right, it won’t get shown by other agents.
2. The buyer is the one who is out there looking at maybe 20 properties before making a decision to buy.  Your home or condo is in competition with all the other thousands of properties on the market right now, so it better be priced in-line with other comparable properties, or the buyer will just buy something else.
3. Lastly, even if we’re successful getting agents to show the property, and the buyer to accept that your property is the "Best" value available, the bank will still require an appraisal.  Banks are skeptical not lend more money than the property is worth.  Foreclosures are rising, and banks know that property values have declined since 2005.  Banks lending money will require an appraisal, and sometimes two before they lend in today’s market.  Your home must be in-line with Sold data, not just what other active sellers are "Asking" for their property.

This brings me back to Sellers "must be willing to accept out expertise and advice."  If the seller is willing to price the property correctly, they must also be willing to allow us to do our job and sell the property for them.  Sometimes sellers get in their own way by listening to other so-called experts about how to sell a property.  Perhaps a neighbor gave them advice on something that worked for them in the past or a friend or relative tells them something they should do.  Some ideas are good, and should be part of a pro-active marketing campaign to sell your home.  Other ideas are not proven or time tested, and frankly some are just off the wall and do not work.

It takes two things to sell a home in today’s market.  Aggressive Marketing and Aggressive Pricing.  One without the other isn’t good enough.  Ultimately the seller controls the price, while the Market determines the Value.  When price meets value, the property has a chance to sell, if buyers are aware of the property.  This is where aggressive marketing comes in, and this is what a good Realtor brings to the table.

Lastly, sellers control the marketing by the agent they select to market the property.  Sellers should be careful not to micro-manage the marketing as the seller is usually emotionally attached to the outcome, and the least prepared to know what actually works in selling a home.  This doesn’t mean you shouldn’t ask questions of your agent.  It pays to ask these Most Important questions upfront in the listing interview.  Hiring the right agent the first time will save you much time, effort, money, and worry.  Hire the best agent, and then listen to their advice.

Soon we’ll have a follow-up article on pricing.