How would you like to view videos complete with graphs and analysis breaking down the overall Lee County Florida housing market, as well as many of the sub-markets throughout SW Florida? Now you can. The Ellis Team at RE/MAX Realty Group in Fort Myers Florida recently released its annual State of the Market Report, and this year they’ve produced videos explaining in detail what it all means for the future of the local housing market.
State of the Market Video 1 This video gives an overview of how the Lee County real estate market fared in 2009 vs. 2008 and provides many graphs and analysis on what foreces are influencing the market
It’s that time of year again. Final sales numbers are in, and we can accurately reflect on where we’ve been and where the market may be headed in 2010. Each year we release the most comprehensive statistical report on SW Florida residential real estate, and this year’s report uncovers some interesting observations.
Single Family Home Sale Prices in SW FLorida 2008-2009
Last year we said we really need jobs and employment to fix housing and that is partially true. A bottom seemed to form even without jobs and housing as investors came in and competed with first time home buyers for the best bargains. Never before have sale prices been so low as compared to rents as to cash flow for investors like we’re seeing now. This investor boom is much healthier now than back in 2005 as investors are helping to clear the foreclosure inventory, clean up the neighborhoods, and provide stability and capital until employment returns to the local economy. The underlying investment makes sense at today’s numbers, and in fact still has some room for price gains going forward as well.
We also talked about the true test of a bottom last year. “Sales volume increases, inventory levels stabilize, and prices stabilize.” 2008 saw 2 out of 3 so we speculated that 2009 might bring all 3 into alignment, and this is what occurred. 2009 saw all 3 factors come together and in fact median home prices really firmed up the 2nd half of 2009.
Sales in 2010 were up 92.11%, month’s supply of inventory fell from 17.53 months last year to 7.11 months this year, and both the median price and mean average sale price for single family homes rose in the 2nd half of 2009. All 3 signs point to a bottom that was reached in 2009.
Is every bottom firm? Just look around and you’ll see the answer is no, but we think the real estate bottom should be, as investors seem to have set the floor by scooping up everything they can because it makes financial sense. The phrase financial sense is a far cry from the speculators we saw in 2005.
So let’s give out some interesting facts from this year’s data: Last year we reported 9,207 sales. This year we report 10,021 sales that sold at $100,000 or less alone, and 4,651 sold from $100-$200k.
8,051 homes sold at or above full price last year. That’s almost as many homes as sold in all of 2008. Anyone who bought or tried to buy real estate in SW Florida last year knows this, as offers on properties were fast and furious. That equates to over 45% of the homes selling at full price or better.
So how did the county do on prices? We’re down in price, but most of those declines were 1st half of the year vs. 1st half of 2008 numbers. Much of the declines were year over year, and we believe prices could start showing gains year over year in 2010. Countywide we’re reporting median prices down 38.82% and average price down 40.23% This won’t make sellers happy, or government that relies on taxes to pay for services, but government better get ready for less very soon, because when the Lee County property appraiser comes out with their numbers later this year, it won’t be a gain.
So which area of the county fared the best? Our data shows Sanibel/Captiva fared the best, with a 18.51% price drop in media price and 19.45% drop in average price. Sales were up 28.97% last year in Sanibel/Captiva.
The headlines will read market is down close to 40% in price, but that’s not the real story here. That was year over year data, and is primarily affected by 1st half sales. 2nd half of the year sales firmed up in price, and going forward there’s an excellent chance we’ll see some price gains year over year. It really depends on future foreclosure activity, jobs, and the economy. So don’t get hung up on the -40%. Look at the trend of prices for all of 2009 and we think the data speaks for itself. We’ll post a price graph from the report illustrating 2008-2009.
Download your free copy of the State of the Market Report. You can look up all parts of the county, as we know, all real estate is local. This is just a snippet of data contained in the report.
Recently the Ellis Team has added videos on it’s YouTube channel by broadcasting The Future of Real Estate Show in video. For years the Ellis Team aired this show on radio and recently made the switch to video in January 2010. The Ellis Team YouTube channel already has over 24,000 views and is growing rapidly. We just released our annual State of the Market Report, and we’ll be providing videos in the coming days on the State of the SW Florida Real Estate market and provide even more in-depth knowledge and analysis.
Each week the show provides real estate news and analysis you won’t find anywhere else, and we also bring a featured Hot Properties of the Week segment as well. Be sure to subscribe to our channel and watch for brand new videos to be uploaded shortly.
We’ve been compiling our annual State of the Market Report which will be released soon and this year more than any other some interesting trends are developing. Full time agents tend to get caught up in the deals they’re working on and could miss some of the major trends developing in the overall market. It is always so interesting to analyze the overall Lee County real estate market, and then dissect down to the smaller sub-markets and see what story the data conveys.
This past week I asked several full time agents who work with a lot of buyers if they could tell me what they’re seeing on a day to day basis. I then compared what they said with the data we’re compiling to see what they story is.
A few themes developed from their stories. The first theme is many buyers have heard Florida is on sale, so they come down here with unrealistic expectations about what they can buy. Agents are receiving unrealistic requests for things like gulf front homes or condominiums 1 block from the beach with a garage, built in the 2000’s for $100,000 or less, or waterfront gulf access homes, 3 bedrooms, 2 baths, built in the 2000’s for $150,000 or less. The stories go on and on.
Year End Prices 1993-2009
Many buyers want to look at bank foreclosures, but they don’t want to do any work if it needs repair. They expect all homes should sell at the bank foreclosure prices regardless of whether they need work or not. Many buyers feel the foreclosures set the prices in the neighborhood even though they may be missing a kitchen and needs tens of thousands in work. Buyers are quite often dissatisfied with the condition of the distressed properties, but they don’t want to look at a regular home that is all fixed up because it is not a perceived bargain.
You could take two identical homes next door to each other, one being a foreclosure and needing $15,000 in repairs and another being a normal sale and in excellent condition. The bank foreclosure might be priced $15,000 below the normal home, but when the buyer sees it they’re turned off. They’re also turned off by the price of the normal home because they feel it should be priced $15,000 lower. Many times there is a reason a foreclosure is less money. It takes money to fix them up, not to mention time and effort. Not everybody wants to do that.
Another theme is buyers have no idea homes are selling as quickly as they are. Many buyers are looking around and because there is some inventory believe they have time. Many are not motivated to pull the trigger because they believe that home, or one just like it will be on the market in 6 months or next year. Buyers do not believe these homes are receiving multiple offers and being scooped up by investors who can actually cash flow them at these low prices.
The emotional buyers are seeing fault with the homes and are afraid to buy. The studious investor is beating the regular buyers to the punch because they know these homes will be selling for more in the future, and they can actually rent them out and make more return on their money than other investment vehicles. These homes make financial sense to investors on both ends of the spectrum.
The regular buyer is operating out of fear and lack of knowledge about the local market. After they miss out on several properties to higher bidders it becomes apparent to them this market is much more active than they actually thought.
The SW Florida real estate market is on sale, but it’s the old herd mentality buyers follow. Buyers tend to be most motivated when everyone else is buying, usually at the height of the market. It’s true in the stock market, and real estate market. Back in 2004 and 2005 people couldn’t buy fast enough, sometimes buying groups of homes. Would you say buying a home back in 2005 was a better investment than buying one in 2010? And yet the motivations were higher back in 2005 because people weren’t afraid, when they should have been. 2010 is a far greater opportunity, and the people who study the market realize it.
Later this week we hope to release our State of the Market Report at www.Topagent.com so you can analyze what properties are selling the best right now, analyze where the inventory is, and what prices are doing on a monthly basis. Being informed will help you make a better buying or selling decision. It makes no sense to miss out on opportunities because of lack of local market knowledge just as it makes little sense to overpay, or list at the wrong price either. If you list too high your property won’t sell, and if you list too low you’ll be giving equity away to someone else who is more informed than you.
We’re still analyzing data for our annual State of the Market Report which will be released soon. It’s always interesting to pull the stats and look at the story the numbers tell us, without a preconception of what they should tell us. Because we are in the business full-time and experience real estate on a day to day basis, it’s impossible not to have some assumptions about what the data may contain. That’s probably normal and healthy, however we really try to step back and let the data tell the story.
Let’s start out by telling you what’s involved in getting this data. We pull data from two MLS’s, Sunshine MLS and the Realtor Association of Greater Fort Myers and the Beach. Sunshine contains a lot of data for Bonita Springs, Estero, and some in San Carlos, while Greater Fort Myers primarily serves all of Lee County. Companies and agents can belong to one or more MLS’s and enter listings and sold data into either, or both. We find this data more useful and even more comprehensive than official numbers that are reported, but getting this data is cumbersome and time consuming. After it is acquired, it must be scrubbed because there can be duplicates by agents who enter into both boards. We also identified a few listings that were reported as closed but never recorded with the county, so we discard that sale. It’s also amazing to see how listings can be two different prices in the various MLS’s, so we check those against official public records. When we’re done, we believe we have the most tight and comprehensive data available.
Each year we publish the annual State of the Market Report. We try to deliver this in an easy to understand format and explain what is really happening in the market. We cannot publish all the data as it would be too large and not understandable, so we break it down to make it easy to read and informative.
We’re not done analyzing this data, but we can report a few facts that stand out. If you read this article on a regular basis, you know that we’ve been reporting sales are at record levels and many are selling at or above full price. We know this from our personal experience, but we were astonished to learn how prevalent this is statistically. In 2009, 8,051 homes sold at or above Full Price. That is almost 48% of all homes sold in MLS selling at full price or better, which is simply mind boggling.
Lee County Florida Distressed Sales Chart
The reason homes are selling at full price or more is because so many are distressed sales, a new phenomenon to SW Florida in the last few years. In fact, in December of 2009, 63.78% of all home sales in Lee County were distressed sales. We’ve added a chart that shows the percentages of distressed sales for the last 3 months by area. As you can see, Lehigh Acres leads the way in distressed sales followed by Cape Coral, then Fort Myers. Distressed sales percentages are falling, which is good news.
Each month you hear that home prices are down vs. last year. We believe that is about to change. Soon you may start hearing that prices are up over last year. Prices fell somewhat in 2009 but began rising the 2nd half of the year and are close to where they were at the beginning of 2009. Barring unforeseen circumstances, headlines should read price gains going forward.
Banks tell us to get ready for more rounds of foreclosures coming to the market. How many remains to be seen, but the banks we deal with directly say they are coming. The good news is our market to date has proved its ability to absorb this inventory. If it’s a deal, the market is ready. What happens when distressed inventory dries up and it’s no longer a deal? Stay tuned and watch for the annual State of the Market Report which will be released soon at www.topagent.com which may help answer some of these questions.
