We have been reporting for weeks that pending sales have been outpacing new listings. See last week’s article “Housing Inventory Falls in May” We entered 2020 with low inventory and since the Coronavirus outbreak it’s only deepened. It’s time to issue a warning. Buyer beware listing inventory disappearing quickly.
Many people watch the news and speculate that homes are not selling. The truth is homes are outselling new listings by a 2 to 1 margin. In the last 24 hours we had 84 pending sales and 39 new listings. It’s a similar story the past 7 days, and the last month for that matter.
Buyer demand is strong. Realtors are on the front lines, so we hear the stories every day. Northern buyers are flocking to Florida and buying property. They are either buying a 2nd home and moving here to escape quarantine, or more predominantly they are escaping what they see as repressive government overreach and leaving their state entirely.
If business owners pull out of those states some of those jobs will never return. Others are deciding on early retirement and getting out of Dodge. You can only lockdown people for so long before they feel they need to make a change. States like Florida and Texas are particularly attractive for a few reasons.
Both states have had far less mortality rates and fewer hospitalizations than other states. Buyers feel as though states like Florida and a few others have been better managed through the crisis. Secondly, Florida and Texas offer no state income tax. Before Coronavirus people were already fleeing high tax states like New York, New Jersey, Illinois, etc. Low tax states like Florida helps seal the deal for business owners and higher end employees seeking relief from high taxes.
The other thing we have learned through this pandemic is people and businesses are re-thinking work models. More companies have allowed work from home, and employers and employees alike have gotten used to it. Now that its viable, companies are questioning if they need high lease space commercial properties or if they can get by with less expensive space out of the bigger cities.
Financially it may be an easy choice for employers, and even easier for employees. Add in the pandemic and there is a propensity to escape densely populated areas to more rural areas. When you combine financial concerns with health concerns, more employers and employees are choosing to get out of the big city, even if it means quitting a job, or closing a company.
We believe over the next few years companies will start migrating out to flex space in the suburbs, and out of high tax states altogether. As more people leave those states, it will place a higher financial burden on the fewer remaining to carry a higher tax load, and they will eventually leave too. It’s like a chain of events that began a few years ago with America’s economic revival and it’s picking up steam today due to Covid-19.
Buyer Beware Listing Inventory Disappearing Quickly
Our advice to buyers is select a property that meets your needs and lock it down. We are down to about 3.85 months supply of inventory and going lower every day. We were down to 4,440 single family homes on the market in Lee County Mid May, and if this pace keeps up, we’ll be down in the 3,000’s by June.
If you are a seller, there is no better time to sell than right now. We are seeing properties that did not sell in season suddenly sell because they are the next one up. If you are a buyer, you need a realtor that knows how to write a winning offer, and that takes experience.
If you are a seller, you need a Realtor with experience dealing with multiple offers, or the wisdom to know when to wait for a better offer that might be just around the corner.
Neither side should wait. Interest rates are low, and there are compelling reasons for both sides to act quickly. Call Brett or Sande Ellis 239-489-4042 Ext 4 to discuss your sale, or visit www.SWFLhomevalues.com to find out what your property is worth instantly.
Buyers, we have a system that will alert you to new listings the minute they hit the market. We can also tell you about new listings we might be working on. We’re here to help.
Happy Memorial Day!