First, we’ll start with the good news. Official real estate sales numbers for Lee County for November 2009 won’t be released until December 22. Last year November single family home sales totaled 600 in the Lee County area. This year we expect somewhere around 1,355 total single family home sales +/-. Assuming the 1,355 is anywhere close to accurate, those numbers would be an increase of 125.83% over last year, which is pretty remarkable. We’re sure the headlines will tout this feat.
As many of our readers know, the Ellis Team developed the SW Florida Real Estate Current Market Index many years ago which has accurately predicted the forward direction of the local real estate market. This month we spotted a new trend. The Index spiked up a bit to 4.36, close to what it was back in March. A falling Index number is a sign the market is heating up, and a rising number indicates the market is cooling down. As you can see, the graph was heading down which led our market to record sales numbers all year.
This month is the first month we’ve witnessed a spike in a long time, which could indicate December and January sales may fall from August and September levels. We will want to keep our eye on this Index in the coming months to see if it is a continuing trend. It does make sense though as the Homebuyer Tax Credit was due to expire at the end of November. This credit was just recently extended, so we’ll have to see if this affects future home sales going forward.
We’ve also witnessed an increase in listing inventory the last three months. Pending sales are down over 100 units this month. The pending sales drop can be attributed to lag time in the Homebuyer Tax Credit, and diminishing listings in the lower price ranges. We’ve begun to see slightly higher priced listings coming to the market.
FNMA has begun listing more properties as foreclosures, and the banks we work with are bringing new inventory to the market now as well. These foreclosure listings are a result of foreclosures that began 6-9 months ago. New foreclosure filings are trending down, which is good news for the market 6 months from now.
We believe this season is going to be good, as visitors recognize this may be the last season to fully capitalize on our great bargains in SW Florida. It will be interesting to see just how much inventory we can draw down through the end of March, as well as through July when the new Homebuyer Tax Credit expires.
It’s not surprising that home sales trailed off just a little bit as they typically do this time of year. It’s actually been a little bit surprising home sales have been as strong as they have, but of course investors have been swallowing up properties at great prices, and first time home buyers who were employed and qualified for a mortgage found the tax credit too good to pass up.
Even with these record sales, we’ve still added to overall inventory the last 3 months. We’re going to want to keep our eye on that. We’ve also reported that we feel there is pent-up supply, which is people who want to sell, but just cannot at these low prices. It’s still very difficult to fully assess this market, as there are many hidden variables.
The Treasury department has issued new guidance in the sale of short sales. Details are forthcoming, but this should be a roadmap for banks to follow to make the short sale process quicker and a little less painful. You’ll still need a short sale expert as many of details haven’t gone away, but the process is being streamlined and unified so no matter which bank is involved the process would stay the same. Keep in mind, this is government, and most of their past efforts to modify mortgages and streamline have failed, so we’ll see if this is any different.
Bottom line is we have a hot market, and visitors have shown interest and are buying. It’s also the end of the year when sales fall, and they’ve remained very strong. We have seen an uptick in listings and a fall-off in pending sales in recent months, and this could all be related to the supposed home buyer tax credit expiration in November. We’re just saying we’ve spotted a slight trend in the numbers and it’s something to keep our eyes on. We still expect big numbers on Tuesday when official sales numbers are reported, and we expect healthy sales all season. Stay tuned, as we’ll be tracking.