Monthly Archives: November 2016

Time to Give Thanks in SW Florida

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By the time you read this article Thanksgiving will be a distant memory as attention turns to holiday shopping, upcoming family get togethers, office parties, etc.  We thought it might be an appropriate time to give thanks in SW Florida before the holiday rush.

Give Thanks in SW Florida

Give Thanks in SW Florida

I’m thankful the election is over.  I was over it months ago really and Election Day couldn’t get here soon enough.  Now that the election is over, we can reflect on what the results might mean for our real estate market.

Interest rates are rising.  This was the case regardless of who was elected president, so we have some headwind there that doesn’t help.  However, rates are still very low and shouldn’t pose a big problem anytime soon.

We are hopeful parts of Dodd-Frank will be repealed.  This would help the financing market as onerous regulations have made lenders cautious about lending.  The finance industry was to loose before the run-up and they’ve been too tight since.

Appraisal regulations are terrible.  We’d like to see these revamped as they don’t serve the buyers or the banks well.  They’re forcing buyers to lose homes to cash buyers or put more money down when the home doesn’t appraise.  It’s a shame because if the buyer loses out because the home doesn’t appraise and a cash buyer comes in and pays what the previous buyer contracted to pay, it proves the home was really worth it.  New regulations within the last few years prevent appraisers from reaching actual value, especially on homes that are highest in the neighborhood.  Just because there are not comps at that higher price doesn’t mean home isn’t worth it.  It just means a home that size perhaps hadn’t come on the market until now.

We’re already hearing Apple and Ford may build products in the US that were previously slated to be built out of the country.  This is good news.  We need manufacturing jobs to come back to the US.  Lowering corporate income taxes raises the tax base as more companies do business here, and they hire US job seekers versus lower paying jobs somewhere else.  It’s a win-win for the US.  More jobs mean a healthier real estate market.

We’d like to see the Affordable Care Act reworked so the coverage is actually affordable.  We talk to buyers who cannot afford to purchase a home because health care costs have gone up so much.  The Affordable Care Act didn’t do much to contain costs, only premiums on those that qualify for subsidies.  This didn’t address the problem.  We need to control costs, deliver a better product, and make it affordable to more people.  It is our hope that the president and congress can work together to solve this issue.

Right now many employers will not hire full-time workers.  Some small businesses cannot afford to pay under Obama Care either, so it’s a double-whammy.  Repealing and replacing that law could fix this and allow businesses to hire full-time people, which will help the economy and real estate markets across the country.

We’re not here to argue who would have made a better president, or whether the popular vote or Electoral College is best.  Now that we have a president, our focus is on what we can do to get the economy going again.  We’ve basically had free money for the last 8 years and that didn’t help like you would think.  Change is required, and change is on the way.

We think we have the potential to kick-start this real estate market.  It will only happen if the economy takes off.  Be thankful change is coming, and let’s all hope and pray that change will kick-start this economy.

You can search our website at www.LeeCountyOnline.com for some great bargains in SW Florida.  You can also find out what your home is worth online for Free!  If you’d like to talk to us, we can be reached at 239-489-4042

Don’t forget about our Ready For a Yeti promotion.  Enter to win a Yeti cooler.  Details available on our Ellis Team Facebook Page

SW Florida Real Estate Market Update December 2016

For Sale By Owner Sales at All-Time Low

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Only 8% of recent home sales were FSBO sales which indicates for sale by owner sales at all-time low for the 2nd straight year.

For Sale By Owner Sales at All-Time Low

Most for sale by owners want to try and see if they can save the commission, and who could blame them.  Everyone wants to save money. What matters most is how much is in your pocket at closing.

The average FSBO gives up after 2-3 weeks when they get no showings or so many showings and no offers that they get tired of the process.  They don’t know who they are letting in their home and what their motivation is.  If it’s risky for real estate agents’ security, just imagine how risky it is for a sale by owner.

We know that 92% of all sales go through an agent.  Most sellers don’t realize that only 4% of buyers viewing their home are qualified to buy it.  Some don’t have the income.  Others don’t have the credit necessary to purchase.  A large percentage has locked equity, meaning they must sell something before they can purchase.  This requires an agent to solve that problem.  It is very frightening to sell and buy simultaneously and to coordinate financing on both properties and all the closing details when you don’t know what you’re doing.

Buyers and sellers have fears and all these must be met.  A for sale by owner can’t do it.  Buyers don’t trust sellers because they have fears, just like the seller does.  Somebody with knowledge and people skills must manage all this.

Quite often we get sellers who contact us telling us they’ll pay us a certain percent to sell their home.  They mistakenly believe they’ll save part of the commission doing this, essentially becoming their own listing agent.

First off, they won’t have an agent representing them.  Secondly, they won’t have an agent marketing their home.  We go out and create buyers for each of our listings.  We target buyers online by the inventory we have.  When we don’t have the sale by owner in inventory, we aren’t out creating buyers for that home.

Real estate today isn’t like the old days where you put up a sign, placed it in MLS, maybe took out a generic ad in paper, and hoped someone else would sell it.

We Target the Buyers

Reaching buyers today is more sophisticated.  We buy the data and target the buyers.  We have the ability to search for buyers based upon their income, age group, lifestyle, whether they’re likely to make a move, etc.

Let’s say we list a property in a 55+ community.  It would do no good to target 30 year olds when they can’t live there.  We can target 55+ yr old buyers.  Or perhaps we list a property with tennis courts.  We can target buyers who are interested in playing tennis. The same is true for waterfront homes, golf course homes, gated communities, etc.

We go out and find buyers based upon our seller’s needs.  If a for sale by owner thinks they’re going to save part of the commission by offering all agents a fee to sell their home, they’ll be missing  on the prime benefit of listing with an agent.

For Sale By Owner Sales at All-Time Low

Two separate studies show for sale by owners receive 16% less than properties sold with an agent.  By giving away 16% are they really saving anything?  No, it’s costing them not to use an agent.

If you doubt us, go ahead and try it for a few weeks.  Then call us at 239-489-4042.  Or just call us upfront.  If we put a lot more money in your pocket at closing because we attract more buyers, we don’t cost you anything.  Imagine selling in an online auction.  Do you think you’ll receive more if you have 1,000 qualified buyers versus only 1?  Let us open the door to finding good qualified buyers for you.

Visit our website and search for your dream home www.LeeCountyOnline.com or find out what your property is worth.  Good luck and Happy Home Selling!

See Also:  FSBO and Discount Broker Sales at Record Lows

The Ellis Team now marketing Useppa Island Homes

Listing Inventory Rises Slightly

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The last few weeks we’ve been bringing readers up to speed on prices and where they’re headed as well as closings for 2016.  This week we decided to focus on listings.  We’ve been reporting that listing inventory rises slightly for months and here is the latest graph to illustrate that.

Listing inventory is seasonal.  For some reason, more sellers decide to list in season than other times.  I don’t know if they perceive there are more buyers here in season or perhaps they come back to SW Florida and decide to list.  For whatever reason is does go up in season which makes using the trend line a little complicated.

Listing Inventory Rises Slightly

We did add the trend line which does show a rise in inventory going forward.  Year over year numbers are up each month so this is accurate.  The real question is going to be, with slowing sales, rising rates, and stagnant home prices, what will happen in 2017?

Listing Inventory Rises Slightly

The amount of inventory in 2017 will most likely affect home prices as much as interest rates do.  We’ve seen rising prices up until this year partly because listing inventory has been so low for so many years.  As new construction and existing home inventory begins to rise, we’re seeing prices level off. We’re not sure if it’s the chicken or the egg.  Does listing inventory rise because prices stagnate or do prices stagnate because inventory is rising?

We think they go hand in hand and affect each other.  The SW Florida real estate market is totally balanced right now.  You might say it’s a perfectly healthy market.  Buyers and sellers are at an equal advantage right now.  In the lower price ranges, it’s a seller’s market and in the upper ranges it’s a buyer’s market.  The mid-market is balanced.

Buyers, sellers, and agents alike complain when the market is skewed too far in any one direction.  It is not often we can say the market is perfectly balanced, but at the end of 2016 I think we can.  Our market is like a teeter totter and it is straight right now.

As you know, it doesn’t take much to alter a teeter totter and they don’t stay straight for long.  Our market has been slowly moving from a seller’s market to balanced.  It could go either way from here.  It depends on interest rates, consumer confidence, and the economy.

What Role Will Election Play?

We think the election results will go a long way to resolving some of this.  Interest rates will probably rise in 2017.  Consumer confidence will be swayed by the economy and confidence in the election results.

Who holds the presidency?  Who controls the Senate, and the House?  Is the election in dispute?  Is the winner under investigation and facing indictment?  We don’t know how the election will turn out.  Nobody knows how the winner and loser will react post election.  We don’t know who will control congress.  You’re witnessing is the craziest election we’ve ever seen, and could get crazier after the election.

All we do know is we have uncertainty.  Uncertainty may hold back interest rates for a while, but it may also hold back the economy.  We don’t control any of this.  All we can do is advise our clients and help them make the best real estate decisions for their family.

If you’re thinking of buying or selling, call the SW Florida real estate authority, the Ellis Team, 239-489-4042  or visit our MLS website.  While we may not be able to tell you who will win the election, we can advise you on your real estate decisions.  Use our website to find out how much your home is worth for Free or search the MLS.  Neighborhood market reports are available for neighborhoods you’re interested in.

And be sure to buy some popcorn this weekend because next Tuesday will be must-see TV.  Good luck and Happy House Hunting!

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SW Florida Real Estate Shift is On

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Real estate shifts are the natural ebb and flow of the market.  The real estate market never stays constant.  It is affected by supply and demand, employment, the economy, interest rates, weather, political forces, and more.  Our world is in a constant state of shift, so why would the real estate market be any different? We’ll show you why the SW Florida real estate shift is real and it is in effect.

Nobody would expect the stock market to stay the same each day.  People know that it goes up and down, and many times it does so in the same day.

Currently the SW Florida real estate shift is on.  Last week we reported that sales prices have been flat all year.  Some prices ranges have gone up and some have gone down, and overall the market is flat.  If you didn’t read last week’s article on about SW Florida home sellers  we’d encourage you to go back and read it as the graphs show perfectly what is going on with prices.

SW Florida Real Estate Shift is On

SW Florida Real Estate Shift

Today we’d like to focus on closed sales.  As you can see from the chart, closed sales are down in Lee County versus last year.  In fact, they’re down 9.04% year over year.

We have rising inventory, declining sales, and stagnant home prices.  I’d call that a shift.  It’s nothing to worry about or blatant in the numbers, but something to be aware of going forward.

In a shifting market, marketing is more important than ever.  To get top dollar your home must compete and stand out.  It must do so in three ways.

Everyone knows if they wish to sell something it pays to have interest from more than just one party.  Imagine selling an item online.  Would you rather have 1,000 bidders or just 1 bidder for your item?  Of course, everyone would choose multiple bidders when selling.  The same is true in real estate.  You don’t necessarily need multiple bidders; however, you better expose the home to multiple parties.  Everyone would agree that 100% exposure equals top dollar.  Anything less may net you less than top dollar.

Secondly, while marketing is most important, no amount of marketing will sell an overpriced home.  We could spend a million dollars marketing a property.  If it is worth $500,000 and we price it at $1 million will it sell?  Of course not.

Thirdly, the agent you choose may be the most important factor of all.  You want an agent that will give your home the most exposure.  You want an agent with experience to know what price it should start at, and the wisdom and courage to tell you when it’s time to adjust.  Inexperienced agents may not know how to price, and they may not have the courage or confidence to tell you an adjustment is needed.

When I go to the doctor because I fear something is wrong I don’t want a doctor who will tell me what I want to hear.  Of course, I hope its good news and nothing to worry about.  However, if it isn’t I want a doctor to tell me straight-up so I can make quick decisions and rectify the bad situation.  The sooner you deal with a medical issue the less pain you may feel on the back end.  In life, the sooner you deal with issues the quicker they are resolved and the sooner you get back to living life.

The same is true in real estate.  When making a real estate move, don’t call that friend who just got their license or that family member who needs help.  You want the best, and your financial success depends on it.  Especially in a shifting market.

When financial markets shift, you’ll hear the term “Flight to quality.”  This means a movement towards safety and dependability.  In real estate, sellers move towards experienced agents who can guide them through the shifting maze.  Now is when experience counts, and your future depends on the advice, expertise, and marketing from agents who can guide you.

If you go on a swamp buggy tour, you’ll know what I mean.  You want a tour guide who’s done this a time or two and won’t tip the buggy over in alligator infested swamp water.  We’ve done this a time or two, so feel free to call us if you’d like to buy or sell in SW Florida.  Visit our website at www.LeeCountyOnline.com to see all properties in the MLS or find out what your home is worth.

Watch our SW Florida Real Estate Shift Predictions Back in February 2016