Monthly Archives: February 2020

Coronavirus Impact on Real Estate Nationwide and Locally

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People are talking and wondering what effect the Coronavirus will have if it comes to the US.  We should prepare for and expect that it will as it is spreading across the globe, and we are not immune no matter how hard we try.  Today we’d like to focus on a potential Coronavirus impact on real estate.

Let’s talk about what we know first.  From a health standpoint, the death rate appears to be about 2%.  Most people experience cold and flu like symptoms which might persist a bit longer than a cold.  The flu death rate was about .1%.  In 2018 61,200 people died from the flu, while about 42.9 million people were infected.

While Coronavirus appears to be very serious, it’s not something to freak out about.  We can try to slow it down, but if it reaches pandemic status it will come. The young and the old are most at risk, like many illnesses.

What Will be CoronaVirus Impact on Real Estate Nationwide?

If it comes, what will be Coronavirus impact on real estate?  Several things could happen.  First, the economy will slow down.  The virus is already affecting business worldwide.  We are seeing oil prices drop, in addition to interest rates.  A slowing economy lowers the demand for oil.

Coronavirus Impact on Real Estate

Home buyers can take advantage of lower rates.  Yesterday at our meeting a lender was quoting under 3.5% conventional and under 3% for government backed loans.  It’s a good day to be a buyer right now, and if you’re in the market, you should act now.

Rates are 1% lower than they were this time last year.  This adds 11% purchasing power to a buyer.  In January the median home price was up 2.1% over last year while the average was up 13.8% At the median level, buyers just gained about 8-9% purchasing power on interest rates alone, which adds fuel to the market.

The Coronavirus could impact travel plans for international visitors and Americans alike.  Tourism could drop and vacation rentals could be hit from foreigners.  However, we could see a boom from Americans who may become afraid to travel abroad and decide to stay in the US.  We could see people decide not to take cruises and vacation in Florida instead.

Florida May Fare Better Than Others

While airline and cruise stocks may be hit hard, the impact on Florida may not be as severe as people can drive here.  Luxury markets could be hit as we may have less foreign buyers here this year due to the virus.  California comes to mind as Chinese buyers are not traveling and spending money here right now.  Right now the virus is spreading across Europe, so expect to see more US luxury markets affected going forward.

Amazon has admitted it expect lower sales on its big sales day coming up.  A lot of product will not come from China, so global sales will suffer.  Short-term we could see an economic pull-back.  Some people could lose their job over the virus.  The only silver lining to all this was it’s happening at a time our economy was doing well, so at least it didn’t happen in a downturn.

While the economy could suffer a bit if we have a full-blown outbreak, there will be opportunity due to lower rates.  From a human standpoint we hope they contain this thing and get it under control soon.  The cat might already be out of the bag.  If it is, we’ll deal with it as best we can.  It may become a big inconvenience.  Meetings may get cancelled.  Schools and major events might have some choices to make.

Buyers and sellers have choices too.  Our suggestion would be, if a move is something you’re considering, do it now.  Rates are in your favor.

Best Way to Search For Properties On The Go

If you’d like the best search option available, check out www.mobilesearchapp.com It’s simply the best mobile search app on the planet.  It allows you to search at the neighborhood level anywhere in the US.  This is a great way to beat the crowds and see what’s available.

If you have questions feel free to call us 239-489-4042 Ext 4 Ask for Sande or Brett

Good luck, and wash those hands every chance you get!

See last week’s article “Interest Rates and Housing Inventory Levels Shape Direction of Market”

Check Out Lee County’s Best Real Estate Values

Ellis Team Weekend Open Houses

Interest Rates and Housing Inventory Levels Shape Direction of Market

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Two things we study closely are interest rates and housing inventory levels.  These two indicators help us get a sense of the forward motion of the local real estate market.  Currently, interest rates are around 3.5% which is even lower than the chart.

Interest Rates and Housing Inventory

Housing affordability numbers show the US market at 16 in 2019, which is less than 17 we had in 2018.  In other words, consumers could afford more home in 2019 than 2018.  Housing affordability is a function of price of home combined with how much it costs to finance it, and incomes.

Home prices were up 4.8% nationally in 2019.  Wages were up, and rates were down.  After calculating these 3 factors, it turns out we could afford more home in 2019 than previous year.  This also means we have opportunity in 2020.

Buyers are having a difficult time right now.  Not because rates are low, or credit is hard to get.  On the contrary, credit standards are OK right now and rates are indeed low.  The issue is inventory levels are low.  Nationally we’re down to a 3.9 months’ supply of inventory, which is historically low.

If we revert to the top of the article, the two things we’re monitoring now are interest rates and housing inventory levels.  Both are down, which is putting pressure on buyers.  Our team is working with several buyers right now, and it feels like a race to find the best listings first.  Many times, there are several buyers interested and sellers are receiving multiple offers.

Every home isn’t receiving multiple offers, it just feels that way when you’re working with buyers.  A good agent working with a buyer searches for the best homes that meet their client’s needs.  The best homes are typically the next home to go, because they offer value for the size, location, and amenities that home offers.  It’s no coincidence that several agents zero in on the same few homes, because that home is clearly the best value, and one of the next homes to sell.

Buyers do the same thing online.  They search for the best home and best value for them.  Sellers often look at the competition, but they often do so through rose colored glasses.  Sellers tend to value their home more favorably than buyers because they live in it and it’s their home.  It’s like watching your child perform at the school talent contest.  You see more talent in your child than anyone else, and you’re proud of them.  It’s difficult for a seller to step back and take an impartial look at their home like a buyer would.

Ellis Team Nationwide MLS Search App
Ellis Team nationwide MLS search app

Thankfully we’ve got an app for both buyers and sellers that should help you.  It’s the first nationwide MLS search for both buyers and sellers, and it includes some features no other site offers.  You can download the app at www.swfloridaopenhouse.com  Next week we’ll present more things you can do with this app.  We’d appreciate your feedback as well.  It’s something we’ve been working on for a few years and we think it’s a major improvement over anything else out there.  If it asks for a Realtor choose Brett Ellis. We’ll let you be the judge, and we welcome your feedback.  Email me at Brett@topagent.com and let me know how you like it, and if there’s anything we can improve.

For the first time you’ll be able to search at the neighborhood level, not just the zip code level.  There’s a handy guide that guides you through the process, and a dynamic map where you can choose exactly what streets you want to look at.

You can always call us at 239-489-4042 Ext 4.  If you’re thinking of selling your home, ask for Brett or Sande Ellis.  We also have buyer specialists ready to serve you.

Good luck and enjoy the new App!

See Last Week’s Article “Real Estate Total Dollar Volume Up in Lee County in 2019“

Real Estate Total Dollar Volume Up in Lee County in 2019

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One of the ways we measure health of the real estate market is to measure the real estate total dollar volume of sales.  We get this by multiplying the number of sales by the average sales prices.  The reason this figure is important is because it quickly tells us so much.  We know that Lee County Florida real estate total dollar volume was up again in 2019, beating all the past 5 previous years.

Real Estate Total Dollar Volume Up in Lee County

Real Estate Total Dollar Volume Up

The average sales price was down 1.7% for the year while the median sales price was up 3.0% The reason the real estate total dollar volume is up is because sales climbed 3.4% for the year.  Even though the average price fell, we made up for it by increased sales.

We started to see sales prices rising at the end of 2019, so the 1.7% drop in average price is the average for the entire year.  Inventory fell 16.5% in 2019. Combining lower inventory with lower interest rates, we’ve got a recipe for potential price increases.  It’s a classic supply vs. demand with a little bit of affordability mixed in the formula which equals rising price potential.

Mortgage applications rose this past week as well, which is a sign that consumers are jumping on these low rates.  Many are new purchase applications, and some are refinance applications.  We’re seeing more people in SW Florida considering their options.  They’ve been locked in their homes for quite awhile and they’re wondering if now might be the time to make a move.  They’ve finally gained enough equity, either through paying own their mortgage or rising home values, or both.

The trickiest part is finding the next home to move into while there are low inventory levels.  That’s where we can help.  We’ve helped people find new construction they weren’t aware of, which is sort of like invisible inventory.  The other thing we have is a new App that is making the home search process more fun.

New Consumer Experience App

You’ll be hearing more about this new app very soon.  We believe it will make shopping for real estate fun and be the best consumer experience you’ve seen.  It will reshape the industry.  To do that, it must be a game changer.  This weekend I’m out in Dallas at our national convention where we expect it’ll be released.  If you’d like a VIP invite to check it out, send me an email to Brett@topagent.com with message line Consumer App.  I’m going to make sure News Press readers and our Blog readers get first access to this cool new technology.  The best part is, it works nationwide too, so if you’re visiting here from somewhere else, you can use it for back home too.

2020 will be an interesting year to watch.  Sometimes election years can be funky as consumer confidence is held in the balance, but that doesn’t seem to be the case this year.  Americans seem confident in the direction of the economy.  The job outlook is bright, interest rates are low, and people’s retirement plans are doing well.  The stock market is on fire.  All systems seem to be go.  Trade deals are going our way which sets up well for the economy of the future.

Prices are almost back to where they were in 2005.  The difference is we have end users for our homes.  Back then we had speculation and flippers without end users.  The inventory was built for future demand.  Today we don’t have enough inventory, so it’s a totally different market, and the risks that were present back in 2005 are not here today.

2020 is All About the Consumer

We feel good about the local real estate market and its direction.  We feel good about the consumer experience we’re bringing to the market.  2020 will be an exciting year on many levels, both for the consumer and for agents that disrupt the status quo.  The Ellis Team looks forward to disrupting the status quo.  Email us if you’d like a first access to our new consumer experience.  If you have a home to sell, call Sande or Brett Ellis at 239-489-4042 Ext 4

Good luck and Happy House Hunting!

See Last Week’s Article “Lee County Home Prices Almost Back to Record Prices”

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Lee County Home Prices Almost Back to Record Prices

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We’re almost back baby!  We mean this in a good way.  Lee County home prices are almost back to 2005 levels, and this is good news. Some might take this to mean home prices are approaching record territory and it’s time to worry.  We say not in the least, and for several reasons.

Lee County Home Prices Almost Back to Record Prices

In a growing economy, home prices were always going to rise.  The difference is, back in 2005 we had pre-built inventory that exceeded demand.  It was false demand.  You can’t keep selling the same home to flipper to flipper without an end user in mind without future repercussions.  Our market was playing musical chairs.  When the music ran out, we had more homes than end users, and we had a glut.

We would eventually need all those homes, just not right then.  Of course, the downturn came and hit our area hard.  Builders quit building.  Eventually our workforce grew again, and our economy picked up.  Except the home building didn’t, and what seemed like a glut back in 2005 was now the floor.  We needed more construction.

Fast forward to today.  Our economy is fantastic.  We’re looking at some of the best numbers in our nation’s history.  Because we’re now in a global environment, we have global competition.  The U.S. is tearing it up, and we don’t see much inflation.  This allows interest rates to stay low.  In the old days, a heating economy meant rising rates, and that’s just not the case right now.

Lee County Home Prices

We have more room for price gains because it’s really all about the affordability.  People are making more money and borrowing costs haven’t risen.  This makes housing affordable for more people.  And SW Florida is growing, which adds demand for more housing.

Therefore, we’re seeing inventory levels falling and prices rising.  We have end users, which is something we didn’t have back in 2005.  Trade deals favorable to us have been struck with Mexico, Canada, and China.  These deals will greatly help farmers, manufacturing jobs in the US, and more.  The very people it will help may eventually move to places like Florida.

We expect to see the Fort Myers/Cape Coral area and points north like Punta Gorda and Port Charlotte take off.  It may not be sudden, but 10 years from now we’ll look up and marvel at all the new growth we’ve seen.

With that being said, there are still sellers that manage to overprice their home and fail to sell.  Proper pricing and maximum marketing are what sells homes.  You don’t want to under price your home and give equity away to the buyer, and you don’t want to overprice it and watch your neighbors sell while your home sits on the market.

Great Agents Make the Difference

Hiring the best agent is the key.  Hiring the wrong agent can cost you thousands.  It can cost you the sale.  If you’re thinking of selling, please call Sande or Brett Ellis 239-489-4042 ext. 4 for some expert advice.

Buyers, you need expert advice too.  There is a lot to consider.  What is the total cost of ownership?  You’re competing against other buyers, so you need to know what the price and payments will be.  What are the HOA and condo fees?  How much will insurance be?  Are the planned special assessments?

A seasoned agent can help you get all this information.  Buying a home or condo is much more than just looking at pictures and prices.  A lot of study goes into it, and a true professional can speed up that information gathering and analysis for you.  Analyzing information quickly is key here, because low inventory levels are forcing buyers to act faster than years past.  Our team can help you do that.  Buyers can search the MLS like a pro at www.LeeCountyOnline.com  It is updated in real-time, and you can reach us quickly if you need us.  Sellers can get their home value instantly at www.SWFLhomevalues.com  Quality and speed are the keys in 2020, and we can help you with both.

Let us know how we can help you.  Good luck and Happy House Hunting!

See Last Week’s Article “Lee County Real Estate market Finishes 2019 Strong”

Lee County Real Estate Market Finishes 2019 Strong

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For the past few months we’ve been saying the 2019 Lee County real estate market stood an excellent chance of surpassing the previous 4 years closed sales numbers.  More recently we predicted it was going to happen because the pending sales were higher going into December and we only needed about 700 or so closings to break the recent records.  Sales came in as expected, and we can now report 2019 was a good year for home sales.

Lee County Real Estate Market Finishes 2019 Strong

We’ve got so much to report now that we have final year sales statistics, so we’ll do so over the next several weeks.  The Board of Realtors saw a 3.39% rise in number of Lee County real estate market homes closed in 2019 over 2018.  December helped as the Board of Realtors sales were down 1.2% year to date going into December.

Ellis Team sales were up 18.82% in 2019 versus the board at 3.39%, so we feel pretty good about our sales numbers too.  This means we took market share from somebody.  We’ll have some major news releases coming up in a few weeks as to changes arriving in the real estate industry, so stay tuned for that.  These changes will significantly impact consumers and how they receive real estate information.

Some agent’s sales numbers are up, and some are down.  This tells us we have a shifting market and some agents are prepared for what’s going on and some are left wondering what is happening.  When we say shifting market, we don’t mean going from good to bad.  In this case the shift is in the way buyers find homes and select their agent.   This shift is going to accelerate in 2020 and we’re going to see big changes coming.

The agent you choose to work with better be on top of their game.  If they don’t understand the changes that have begun, they won’t be prepared for the changes that are coming.  The cycle has started, and we’re seeing a shift in agent’s and brokerage’s numbers.

Some brokerages are laying off staff.  Agents are watching profit vanish as lead generation costs are skyrocketing.  They don’t know what to do or where to turn.  They were told change would come in 2019 but they didn’t believe it, because it hadn’t happened yet, and they’ve heard all this talk before.  Except this time, it was true, and there is more to come.

You would think with rising sales numbers, agents would be happy.  A rising tide lifts all boats.  The tide hasn’t risen for all agents.  In fact, the tide has gone out for many agents and that has created opportunity for agents that are making the change.

The consumer should not worry.  These changes won’t affect the real estate market.  The market itself will still ebb and flow as it always does.  It will affect how consumers receive information, and it will improve the consumer experience.  Consumers will be happy and will be more educated.  They will feel more involved and will have more information available than ever before.  Exciting things are coming that will shake-up the industry and improve the consumer experience.

If you’re a consumer with an interest in real estate and you’re wondering what the heck we’re talking about, send me an email to Brett@topagent.com with subject line Consumer Experience.  In a few weeks I’ll send you information that will change everything.  Imagine travel before Expedia, Orbitz, and Trivago.  Imagine watching movies before Redbox, Netflix and streaming TV.

In each case the way you received information and the experience you gained from it changed your life forever, for the better.  Some people still remember ordering tickets from the airline and waiting for them to arrive in the mail.  Others remember going to the store to pick out a DVD for the night.  Today it happens at the speed of now, and in a format you can see and digest quickly.  The same is about to happen in real estate.  Sure, you can search real estate online now, so you’re probably wondering what we’re talking about.  You’ll have to trust me that soon your real estate experience is about to change.  Until then, www.LeeCountyOnline.com is the best place to search for SW Florida real estate.

See last week’s article “New Home Construction Up 16.9% in December and It’s Not Enough”

Good luck and Happy Selling!