Everyone always asks how prices are doing in SW Florida. The next question is usually along the lines of how are distressed sales such as foreclosures and short sales affecting the market.
We have new numbers just released that will help answer these two questions. Sales have been falling the past several months as they usually do this time of year. This is also influenced by fewer listings on the market. We have demand but limited supply. Traditional sales are down as well as short sales and foreclosures.
As you can see from the attached chart, we had 158 foreclosure sales for single family homes in Lee County in August. This is down from the peak in March of 209 this year. Short sales are also down from their peak in March. It seems March was the peak for all three types of sales.
SW Florida is in that no-man’s land we predicted several years ago. Our prediction was inventory will be less and prices will rise, but not enough to encourage many homeowners who are underwater but hanging on. Our market is set to take off on the price-wise to the upside, but one thing is holding it back.
In a word, it’s the Economy. All signs point to upward price pressure. We have demand and limited supply, but incomes are not rising and we don’t have jobs to support enough full time end users with good enough credit.
SW Florida is littered with people who would like to purchase but have suffered a foreclosure or short sale themselves, so they are precluded from getting a mortgage for awhile. Even if they have regained full employment it’s difficult to get financing.
Many people are still hurting in SW Florida, and many more moved away perhaps never to return. When Florida’s economy returns we have the potential for some nice price appreciation.
Mind you, we think inventory will increase as prices rise. People who are barely underwater may not be with future price increases. So many are locked into a home that no longer meets their needs, but they can’t sell right now without facing difficult decisions. As prices rise options will open up for some. Others are so far underwater it may be some time before they’ll be able to sell.
Florida still has sunshine, the beaches, year round golf, and provides for an active lifestyle year round that is attractive to baby boomers who wish to retire or spend time in a nice climate as a second home. As the national economy improves more service sector jobs will be required. Along with those jobs typically comes construction jobs, and with that the cycle develops. We’ve seen the beginnings of construction jobs here in SW Florida, but they’re peanuts to what they were.
The good news is Florida is a desirable place to spend time or live, and SW Florida is amongst the best places in Florida. We live in paradise, and the future looks bright. Our market is still healing while all signs look to positive gains. The gains are when, not if. Time will answer how fast the market improves, and we believe the economy will dictate the pace.
If you’re looking for your piece of paradise, you could wait, but why? Prices are going down. They will rise, and the investment alternatives in stocks, bonds, and even precious metals are dicey. Returns are just hard to come by without taking huge risks, and the paltry returns usually aren’t worth the risk. Real estate may be the least risky and offer more to the upside. At least you can rent out or live in a house. It’s hard to rent out or live in a commodity.
If you’d like help securing your piece of paradise, feel free to call the Ellis Team at RE/MAX Realty Group 239-489-4042. We present you with your options and help you make a good decision for you.
Good luck and Happy House Hunting!
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