Inventory Levels rose for the first time in 5 months, as did the Current Market Index.  The Current Market Index has proven to be a valuable indicator as to the future direction of prices in SW Florida real estate.  The Current Market Index for single family homes is at its all-time high at 18.81 while the condo index sits at 22.06

This would help explain why meidan prices have fallen over 13% in just three short months.  What is selling in Lee County is the lower end of the market, which is skewing the median price down.  However, we are seeing price corrections at virtually all ends of the market, so we won’t dispute it’s representation of the overall market.

Mortgage disruptions have affected the mid and higher end of the market.  Going forward, the mortgage market is settling down and credit is slowly becoming available again to buyers who can legitimately qualify for a loan.  We still contend that the buyer is in the drivers seat, affordability is back in the market, and now is a great time to be a buyer.  It’s not a great time to be a seller.  Our advice is buy if you need a home, and sell only if you need to sell.  If you need to sell, you must price it aggressively to attract a buyer.  Homes are selling, but you must price your property where the buyers are.

New home construction has fallen off significantly, which will help the resale market in the coming months.  Resales will not have to compete with builders new product at below cost prices.  Resales will compete with foreclosures from investors with new product who walk away from their mortgages.  It will be interesting to see how the banks market and price the foreclosures that are looming.  History tells us banks are usually slow to price correctly, and the properties typically fall apart due to lack of upkeep, vandalism, and theft. 

We’ll report on the REO (Real Estate Owned by the Bank) as they influence the market and the effects they exhibit on the market.

The higher the CMI Index, the more supply we have relative to demand.