We don’t want to alarm you as 2018 turned in some impressive stats in the SW Florida real estate market. Closings were up for the year, as were prices and dollar volume. You would think with increased closings and prices, Realtors would be reporting the market is fantastic. 4th quarter numbers suggest there may be some chinks in the armor. Early signs point to a Southwest Florida market shift.
Closed home sales fell 15% in December over last year. We can attribute some of that to increased closings last year in December due to Hurricane Irma. However, we’re seeing new pending sales down 10.9% in December, which will lead to lower closings in January and February of this year.
The median sale price rose 3.1% for the year and ended at a year-end average of $251,000. The average sales price rose 5.6% to $351,200 year-end average. So, if prices are rising, why are we sounding the alarm?
Inventory rose 8.8% for the year. However, inventory shot up 19.8% over last December and the month’s supply of inventory was up 11.8% in December. While sales for the year may be up, we’re seeing declining sales in the 4th quarter, rising inventory, and a decrease in new pending sales.
Not Time to Worry
All this leads to worry amongst real estate agents that we may be in the middle of a shift. This isn’t a time to worry though. Experienced agents know how to handle a shift. If you’ll remember, our article back in October warned of a possible upcoming shifting market, and we recommended sellers put their home on the market before January to beat the predicted rush of listings.
People listened, and the rush began sooner than January. We talked about how selecting the correct listing agent is critical when the market shifts in our December 1st article. To read past articles, visit http://blog.topagent.com
When the market shifts, it’s critical you select an agent with experience. For instance, lower priced homes are still receiving multiple offers. Other homes take more marketing and experience to sell properly. Of course, you not only must select an experienced agent, you must listen to them.
Sellers do not like to hear that the market has shifted, and they hold onto what their home used to be worth. Markets move up and down, and just as a seller expects a buyer to get over it when the market moves up, buyers expect sellers to get over it when it moves down.
Sellers point to the fact prices went up 3.1% in 2018. Yes, but not in all sub-markets, and not all year. Prices may have gone up slightly in first 3 quarters of the year and pulled back in last quarter.
What’s Causing a Shift?
Some say it’s rising interest rates. Interest rates peaked in October around 5%. They’ve since slid back a bit. Rising rates rob home buyers of purchasing power. As this occurs, there are fewer home buyers available in each price range.
Keep this in mind. Inventory levels stand at a 5.7-month supply of homes. A balanced market is 5.5-month supply. So, we’ve barley crossed the threshold, and it varies by price range.
We’re seeing buyer activity picking up right now. We usually do after January 15th. Buyers have more choices today, but the best homes are flying off the shelves. The challenge to sellers is, you must be the best home, so buyers pick you. An experienced agent can guide you. Buyers see lots of homes, and it becomes apparent which is the best value for them. Sellers must learn to think like a buyer.
Thinking of Selling?
If you’re thinking of selling your home, always call the Ellis Team. Ask for Brett or Sande Ellis 239-489-4042 Ext 4. Put our decades of experience to work for you, along with the most aggressive marketing in Lee County. There is a reason our homes sell faster and for more money. If you’d like to learn more about the shift, call us for a confidential interview. Experience matters! To get an idea of what your home is worth for Free online, visit www.SWFLhomevalues.com
Good luck and Happy Selling!