When you hear the market is falling off a cliff it brings back memories of the past 5 ½ years of a real estate market in free-fall. Anyone reading headlines for the past several years would believe any such headline is another bad story and perhaps would bury their head in despair.

Well SW Florida, a part of the market has fallen off a cliff, and it’s actually good news. Inventory has been eaten up by buyers faster than it has come on the market, and buyers are actually competing with other buyers to buy the best properties. It’s not uncommon for a property to have multiple offers.

For historical reference, I just checked overall Lee County single family inventory numbers for October 2006 which stood at 12,669. They peaked at 16,694 in February of 2008 and basically held firm until December of 2008 when they began to fall. Currently single family home inventory stands at 9,785.

We’ve included inventory charts for Fort Myers, Cape Coral, and Lehigh Acres because overall inventory numbers can be deceiving. You’ll notice there are some minor differences, but for the most part the lines look similar and all three show a steep decline from January 2011 to present.

Fort Myers, Cape Coral, Lehigh acres Residential Inventory
Fort Myers, Cape Coral, Lehigh Acres Listing Inventory

While national news outlets report the rest of the country could be in for a fall, nationwide analysts fail to recognize SW Florida has fallen for over 5 years and is actually on its way up. All real estate is Local, and our market is artificially priced too low, as much as 40% below replacement cost in some instances. As distressed inventory is shrinking, we’ve seen median sales price increases because the market cannot sustain these artificial low prices forever.

We do expect more foreclosures to hit the market as the legal system has been working through some challenges pertaining to the validity and legal documentation provided by the banks. We don’t believe however there will be enough foreclosures to satisfy buyers’ appetite and we could continue to see rising prices. We don’t believe the next wave of foreclosures will be as large as the first waves, and our market absorbed all those foreclosures just fine.

We’ve seen rising prices, increasing pending sales, and decreasing listing inventory for several months now. The fundamentals point to a recovering market in SW Florida. Wildcards can always influence any market, such as gas prices, terrorism, the United States mounting debt and its effect on interest rates, inflation, Middle East flare-ups, and so on. Last year we had an oil spill that had the potential to influence our market, and in some respects probably did.

Nobody knows for certain what wildcards might present themselves. For instance, not many people predicted a 9.0 earthquake that would lead to a tsunami which would lead to a nuclear crisis in 2011, but it happened. Each event led to and compounded the following event.

Absent any major wildcard events, it would appear that the SW Florida real estate market is on solid ground and mounting a comeback. We’d like to see sustained job growth before we’re ready to see sales prices take off, and this is why we know prices will increase, we just can’t say how fast and how high until more of the picture comes into play.


Let’s face it, as agents we’re either promoting properties to sell or educating the public about changes in the real estate market or tips professionals know that the public may not. For years agents used traditional print marketing, TV, radio, billboards, mail outs, signs, banner advertising, and more. Many of these are still very effective and they’re used by large and small companies to this date, however video has exploded on the scene as a medium anyone can use to further illustrate a message.

Ellis Team at RE/MAX in Fort Myers YouTube Channel
Ellis Team YouTube Channel

Newspapers are using video as a way to compete with TV stations. Large news organization post videos provided by viewers, Viewers become extra eyes in the field. Courts are using video from police cars, and defendants are using video to tell their side of the story.

Video doesn’t replace older media, but it does open up new ways of reaching consumers. The Y generation would just as soon search the Internet and watch videos about a subject than watch the news or visit a library, so reaching younger consumers requires change. If I comment to my children I’m having difficulty hooking something up, they’ll have a YouTube video up in about 15 seconds thoroughly explaining the task. I guess those bad instructions in the box don’t matter so much now.

High definition video cameras make it easy to produce video. The trick is proper lighting and sound. We’ve created some high quality videos and some quick videos that tell a simple message about the market without all the bells and whistles. What we’ve found is viewers don’t seem to care about the bells and whistles as long as the video is informative, timely, and matches what they’re looking for.

We’ve created a YouTube channel http://www.youtube.com/brettellisfl Currently we have 113 videos uploaded and about 45,000 views. Our property tours are located on another channel, so these 45,000 views are simply people tuning in to hear about the market or timely news affecting real estate.

Marketing really works when you tie all the media together. For instance, our print ads show our website. Our website has links to our YouTube channel, property tours, MLS search, and more. Our MLS search has links to the others as well. In this way we get all the marketing tools we invest in to work together, in concert. Together these tools can be so much more effective than if we just used on over the other.

Consumers are like cable TV viewers. If you’ve ever flipped channels you’ll notice there are a lot of things on at any one time, and they’re competing with each other. Younger viewers like MTV, while older viewers might like the History channel or national news. There is a place for each, and while they cross over, each definitely has a certain target demographic.

Marketing is similar. Each method could potentially reach everyone, but realistically there are target demographics, and getting them to work in concert with each other increases frequency and reach. It also sends out a message to the public when they see you more than one place. They think you’re everywhere. No matter where an agent puts their marketing dollars, the message is critical. It pays to be clear, concise, and topical. The public enjoys getting this information in print, on smart phones, and certainly in video form.

Look for video to play an increasing role in the dissemination of real estate information. Video will help companies and agents differentiate themselves and allow consumers to decide who they best want to do business with. It could be the information, the look, the professionalism, etc. Video opens up an array of ways a consumer can evaluate who they do business with and assist in making a choice. And if you ever want to know how to unclog a sink or hookup a BluRay player, consider doing a video search, or ask a 10 year old.

Tune in to the Future of Real Estate.  This week’s show is the April 2011 SW Florida Real Estate Market Update


The past few weeks we’ve laid out in detail how prices have increased and some reasons that would explain why. This week we thought we’d illustrate how the distressed market is faring versus the traditional or normal resale’s and look at how that impacts prices.

Breakdown of Distressed Sales Versus Normal Sales SW Florida
SW FLorida Distressed Sales Breakdown

As you can see from the chart, distressed sales are down about 4% in 2011 versus 2010. We all know distressed sales have weighed down the SW Florida real estate market for several years. Prices didn’t just fall in half, they fell in some cases to about 25% of what they were back in 2005 or early 2006.

We’ve often said sale prices have fallen artificially too low and the only thing holding them that low was a flood of continuing foreclosures entering the market to keep the prices down. For the most part, investors and 1st time buyers bought every foreclosure they could and prices stayed low because there were new foreclosures coming on to satisfy buyers appetite.

The foreclosure machine hit a snag in late 2010 due to legal concerns in Florida and 10 other states; however we expect that foreclosures will return in the 2nd qtr of 2011. The question is how many more are left, and how long will it take the banks to work through them. I guess the other question is how long will the economy be stagnant further forcing teetering homeowners over the brink?

Assuming we’re in the 7th inning of the foreclosure crisis and that any wave of future foreclosures won’t be as robust as past waves, prices should continue to rise. Official numbers for March won’t be released for about 3 weeks, but preliminarily we’re seeing median prices rising about 3.45% over last year and mean average prices rising about 16%. Stats were pulled as of March 29, and it does take several days for all sales to be entered into MLS, so these are very raw and preliminary numbers, but they do coincide with what we’ve been seeing and predicting the last several months.

As prices rise, more and more sellers will qualify to sell without being a short sale or foreclosure, which will also change the charts. Nobody should expect an overnight turn around as our market is still healing, and even though we’re in the latter stages of the correction, healing can be painful. Sellers expecting a return to 2005 prices might be waiting years or a decade or more.

We’ll also be anticipating Congress submitting and passing a budget. Many do not realize that last year’s Congress didn’t do that, so we haven’t had a budget in 2 years. They’ve kicked the can down the road and left it for others to do. Because Congress didn’t do their job last year, it’s making it tougher this year, and everyone knows we need steep budget cuts. Inflation will rise as we cannot continue deficit spending. This throws the capital markets off and interest rates could rise, which could also affect real estate prices as increased rates dig into buying power for buyers. When rates go higher, buyers have to offer less for homes in many cases to afford the property. Increased interest rates are like a hidden tax on real estate, so we’d hope for our country to get it’s spending in order for a lot of reasons.

Stay tuned and we’ll watch together how these forces play out and affect our market. Nothing is as simple as one variable dictating prices. We have several variables at work, and time will tell.

Watch our April 2011 SW Florida Real Estate Market Update