The past two weeks we’ve written Top Tips of Selling Your Home and Buying a Home. This week we thought we’d focus on where the market is headed as so many have asked for an update on the market.

Prices in 2011 were up all year since February and never looked back. Most buyers realized the bottom of our market was back in 2009 at the height of the foreclosure crisis. Inventory has fallen dramatically although it has risen again which is a surprise to many.

Attached is the pending sales chart. As you can see, pending sales are up 15.44% over the previous month. Looking back, February always sees a jump in pending sales as the Northern Snowbirds are here in mass every year when our weather is beautiful and it’s cold up North. This year, we started noticing seasonal visitors back in October which was an early start.

While the pending sales chart doesn’t show it, people have been here looking for months. We believe they realize Florida is still relatively inexpensive compared to 2005 levels, but prices are rising and nobody wants to miss out on a good deal. Unfortunately, we have less inventory to sell, so not all are leaving with a deal. In fact, several commented they wished they would have bought last year as prices are definitely higher and selection is definitely less.

We still get calls from buyers looking for $25,000 properties 3 blocks from the beach. We’re not quite sure which website they’re looking at. The only thing we can guess is maybe it’s a 2008 or 2009 version that hasn’t been updated. Maybe they’re reading old headlines, or headlines about falling prices up North. Whatever the case, they’re convinced our agents are holding out on them and they move on to call other agents who they think will have those old deals for them.

The reality is the market moved on. The market rarely stays in one place, it is always in flux. Look at the Lee County Total Distressed Sales Chart. Last month only 44.84% of all single family home sales in Lee County were distressed compared to 71.86% back in June 2009. We have seen a rise in traditional sales combined with a fall in foreclosures available to sell which has contributed to higher prices.

We’ve actually seen more homes being built because of higher price points, declining inventory, and builders have been able to cut costs from suppliers and workers looking for work. While building activity has increased, it’s still a far cry from where it was back in the prime of the market.

We’ve got dozens more charts we could share but only so many would fit in a one page article. Suffice it to say that SW Florida is looking up a bit in housing. Our economy seems to be doing mildly better as well, which we ultimately need to fuel and sustain any housing run-up.

We know more foreclosures are on the way, but nothing like what we saw back in 2009. We have a slight backlog due to legal slowdowns because of the robo-signing issue. The market is easily absorbing all new foreclosures we bring to market and in fact has a thirst for more. We don’t believe this thirst will be quenched. We believe this year will produce a good season and hopefully things will continue on.

This is an election year, and the unknowns are always tax laws, gas prices, instability overseas, and the future of our economy. Absent the wild cards, our market looks in good shape and is healing in a positive way. This healing may be slow for some sellers, and fast for some of those buyers looking at outdated headlines or websites, however it is occurring at a healthy and sustainable pace. It is a process that had to occur, and thank God it is occurring.

Whether you’re buying or selling, it pays to get the facts. A mistake will cost you. Each neighborhood can be different, so be careful about relying on countywide information. It may or may not apply to the home you’re considering buying or selling.

Good luck and happy house hunting.