A few weeks ago we provided preliminary statistics which suggested single family home prices in Lee County had risen to $135,000. Official numbers are out and the number is actually $137,000 which is an 11% rise over last year and a 2.24% rise over the previous month. As you can see, prices have been rising in 2012 and the trend looks good heading into season.

SW Florida Real Estate Sale Prices

I thought it would be good to look inside the numbers just a bit and compare November 2012 with November 2011. As you can see, sales over $500,000 are roughly the same. Where we really notice a difference is in the $100-200k range and even more significantly in the 200-500k range. You’ll notice from the graph that foreclosure sales are down in both ranges and short sales are down in the higher range.

SW Florida Real Estate Market Solds November 2012

The decrease in short sales and foreclosures combined with a dramatic increase in traditional sales is helping the market recover in price. The 11% increase in price is not surprising given the sales mix.

One might look at the under $100k price range and notice the drop-off in sales and wonder if there is trouble in that market. The reality is there are less sales in that market because prices have risen and fewer homes fit into that market. Inventory under $100k is nothing like it was 3-4 years ago, so it’s impossible to pull those kinds of sales numbers from that price range because the inventory just doesn’t exist.

After the height of the market in 2005 we watched home prices tumble and higher priced homes creeping back down to much lower price brackets. You can see from the graph we really started an upward trend in 2011 that continued in 2012.

This will be good news for the county as tax assessments have been much lower forcing the county to cut budgets and spend from reserves. While there may still be some financial misery at the county level, it’s easy to see that price drops have abated and we are on our way back up which should help a bit.

Rising prices will also help more homeowners sell their homes. Many have waited out the market in hopes prices would rise enough to cover their mortgage. We assume many home sellers would like to sell but just couldn’t due to prices relative to their mortgage amount. The rising market will help a certain number of sellers each year meet that goal.

We’ve seen a large amount of investors and baby boomers buying second homes for retirement over the last few years. What’s been lacking are the locals who move up, down, and sideways. Consequently this has been an out of the area buying experience in large part.

While we may not be quite there yet, we are getting closer to seeing locals up-sizing, down sizing, or trading lifestyles. Things change in life as kids grow up, move out, and sometimes back in with parents. Some people think they want a condo in a golf community only to change their mind later on and decide on a waterfront home where they can have their boat in the back yard.

Some want space and privacy, while others decide they want a community with activities. People learn that what interests them today can change over time as people age, relationships change, and employment changes. Having a real estate market open up where less people are under water opens up new possibilities for many in SW Florida, and that is a change I’m sure many here welcome.

As the market continues to improve I think we’ll begin to see more of that. We’ll also see more building which opens up more inventory, and more jobs. And if we can just get our national economy back on track, SW Florida could be in for some great times ahead.

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