Monthly Archives: March 2021

Local Listing Inventory Fell 64.5% While Closed Sales Rose

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Local listing inventory fell 64.5% in February while closed sales rose 24.7%.  As you can see from the chart, we’ve never seen inventory levels this low.  It is a great time to be a seller right now.

Local Listing Inventory Fell 64.5%
Local listing inventory fell 64.5%

Buyers are not having as much fun, but the ones who do score a property are winning too because now they are in the equity business.  Home prices are rising, and you must be in to participate.  Interest rates are rising so getting in sooner will save buyers money too.

The Ellis Team is busy creating our own market.  We are not relying on MLS alone to find properties for our buyers.  We have a database of over 12,000 people looking to purchase a property in SW Florida.  Obviously, there are not enough properties for all of them.

One of the newer things we are doing is playing matchmaker.  We are calling and contacting our database asking if they would sell to one of our buyers.  Sometimes the answer is yes, but they would need a place to buy as well if they did sell.  As our team makes more calls, we can identify more people that would be willing to sell if they could find a new place.  As this list grows, we simply matchup what we have and make dreams happen.  If you wait for a property to hit MLS, you’re too late as it will be gone in hours or days.  There simply is not time to put your home on the market, sell it, and go get that new listing that just came up.

If you knew of a seller that would sell if the circumstances were right, you would have time to make your move.  All we must do is identify enough people who would make a move and our customers are in business.  It’s like making your own market.

For sellers this is an attractive option because they get to buy a home before a seller lists it for sale.  This only works if the real estate team has a large database to draw from, and we do. Our marketing has been creating buyers for years, and we have years full of past clients in our database.

Our team still sells plenty of homes through the MLS.  This is just another way we can find homes for our buyers.  The MLS is slim pickings in many cases.

If you are a homeowner and would like to make a move but you are not sure where you would go, give Brett or Sande a call 239-310-6500.  We may already have a buyer for your home, and we may have a home that meets your needs you could purchase from one of our past clients who would also like to move.

If we match enough people up, we can identify and find hidden inventory for buyers.  We believe there are many people who would like to sell but just do not know where they would go.  You still pay us a commission.  This is a creative way to find a home to buy that the public might not know about.

The Ellis Team is marketing for buyers into high tax states where Florida is a bargain.  We are taking the advertising directly to where the high dollar buyers are, and it is working.  In the past 6 months we have sold so many of our listings above asking price.  The more buyers you have to choose from commands a higher price.

If you have a property to sell, imagine getting top dollar for your home and being the only buyer for a hidden home.  These homes are not withheld from MLS, they are not even for sale.  We are identifying sellers that would sell if the circumstance were right.

If you’d like to get a ballpark idea of what your home is worth, visit www.SWFLhomevalues.com The great thing about this site is not only will it give you a value, but it will also email you monthly how much your home is increasing.

If you would consider selling someday if the price were right, call Brett or Sande today! 239-310-6500

See last week’s article “Top Real Estate agent Mastermind Conclusions“

Top Real Estate Agent Mastermind Conclusions

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We are part of a Top real estate agent mastermind group from Lee and Collier county whereby several top agents come together to talk about current issues in the market.  At last week’s meeting we talked a lot about inventory levels and how top agents are handling offers as well as a variety of other things.

Top Conclusions

Here are some conclusions that came out of that top agent mastermind.  In other markets across the country where inventory levels approach the 2–3 week supply of homes, buyers are being forced to make offers with no contingencies to win the bid.  When we say no contingencies, we mean no financing contingency or inspection contingency.  In other words, when the buyer signs they are not backing out over financing, appraisal issues, or inspection issues.

Top Real Estate Agent Mastermind Conclusions

If a buyer is getting financing and the home does not appraise, it would require the buyer to pay the difference in appraisal price and purchase price plus their agreed upon down payment for the loan.  There is an exception to this whereby the buyer may qualify for a lesser down payment option, but in either event the buyer must be in financial position to put more down.  This weeds out some of the buyers, which is OK when you have multiple buyers bidding for homes like we do today.

This brings us to highest and best.  The definition of highest is bring your highest price.  Best means bring your best terms.  Buyers today are winning out on not only price, but maybe more importantly the terms.  Lastly, relationships matter most in this market.  Top real estate agents know who the other great agents are.  This is important because they know their buyer has been counseled appropriately.  While an agent cannot be judged on how their buyer will act, we do know that better agents do a better job counseling their clients.  Who you work with matters in this market, both on the buying and selling end.

Pricing Strategies

The mastermind group also talked about pricing strategies for sellers.  Many sellers do not realize that property values are changing by the week.  If sellers really knew what their property was worth, they might think again about how tied they are to the property they are living in.  Does your property fit your needs or are you settling because you have lived there so long?  With today’s prices, you may not have to settle.

Many sellers honestly don’t know where they would go if they sold their current home they don’t love.  There may be more solutions than you know.  Sales in the last year are rising even as inventory lowers.  While we may not have as much current inventory, we are getting enough to satisfy more buyers, it just goes quickly.  If we know in advance what would make you move, we can call you when we run across your next home even before it hits the market.

Creating Our Own Market

Imagine home buyers bidding on your property while you find an off-market home that hasn’t been listed yet.  This requires a massive database, and at the Ellis Team we have a database of people who might make a move if the right situation came up.

So, we ask you, is there a price at which you would sell your home with only one showing?  We might already have your buyer.  Is there a home that if it came on the market would make you want to move?  We might already have that seller.

We should talk!  Call Sande or Brett Ellis 239-310-6500 and we will see if we can make your dreams a reality.  This is the market to do it, so do not let this opportunity pass you by.  Or visit www.SWFLhomevalues.com to get a free instant price for your home.  It will even email you each month your new home value.

Good luck and happy home shopping!

Southwest Florida Market Snapshot January 2021Trends

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Interesting trends are developing in our Southwest Florida market snapshot for January 2021.  The first thing you will notice from the graph is new pending sales increased 25.6% over January 2020.  You might ask how this can be as we have been talking about declining inventory levels for months.

Southwest Florida Market Snapshot

Official numbers are in and indeed active listings are down 60.1% from a year ago. New listings entering the market in January of this year were down 10.4% from last January. The combination of fewer newer listings and increased pending sales have led to the 60.1% reduction in listings.

Pending Inventory is Up

Pending inventory in January increased 51.6% which means the situation will be worse when official February numbers are released.  Buyers who have attempted to purchase in this market are keenly aware of how tough it is to score a property.

I do not believe sellers are truly aware how advantageous this market is for them right now.  After years of letdown some sellers just quit checking in on their home value.  Others are interested but unsure where they would go.  I think it is safe to assume there are many homeowners in SW Florida that do not love their current home.  They’re just not sure they want to jump through hoops to make a change right now.

The real question is this?  When will you be ready?  A year from now, two years from now?  What if this real estate market looks different than it does today?  Interest rates could be a few percentage pints higher which will increase cost of future buying.  Not only will it cost you to get a mortgage on your next home, but it will also cost your future buyer as well.  That may limit how many buyers can purchase your home in the future.

Right now, we sometimes have 20-30 buyers putting in offers for each home.  What happens if we only have 1 buyer for each home in a few years, or worse?  In a normal market there are more home sellers than actual sales.  This would mean less than 1 buyer for each home.

When is Best Time to Sell?

If you were selling an item at auction do you think it would be more fun to have 20 bidders or just one bidder?  If there was just one bidder, there would be just one bid, and if you wanted to sell you would have to take that price or decide not to sell.

Our marketing is creating buyers from all over the country.  I have seen some statistics that show more than half of the buyers are from out of state currently. To get top dollar you must advertise out of state.  Ellis Team advertising reaches far and wide to bring the greatest number of bidders (offers) for your home.

When homes increase in value like they are today human nature tells us to hold because values will be greater tomorrow than they are today.  This may be true, but history also shows us that many wait too long and decide to sell after they have seen the top.  They still want the top, but the top has since passed.  By then it is too late.  The top never tells us when it is coming, so most are surprised when it happens.  We are not calling for a top, so do not be alarmed.  But do not blame us either if it happens and we did not see it coming.

We Should Talk!

If you are thinking of selling now, or 1-2 years from now, we should probably talk.  We can come up with an exit strategy for you, and if we see a shift in the market you will be the first ones we call.  The last time the market shifted we told our sellers first and got them out quickly.

You do not want to be caught sitting on an appreciating asset only to find out it started depreciating and the market did not tell you.  We will tell you.  Simply call 239-310-6500 and we can provide a market checkup for you.  This will allow you to be notified if the market shifts.  Or you can visit www.SWFLhomevalues.com for a free instant analysis.

Good luck and keep an eye on the market!

Future of Florida Real Estate

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A few agents and I were sitting around talking about the future of Florida real estate.  One agent speculated that this market could not last forever and would one day have to come down.  His theory was that everything that goes up eventually comes back down and that cycles are inevitable.

Future of Florida Real Estate

Then we got to thinking.  What if this market doesn’t have to come back down?  Is it possible Florida has been undervalued compared to other nice areas of the country?

Why Are People Moving to Florida?

Let’s talk about why Florida looks so attractive, and what the future may hold.  Everyone knows Florida is famous for sunshine and beaches and almost perfect weather in the winter.  Florida is also attractive because we have no income tax, which is substantial compared to some states that have both state and local taxes.

Florida has also been business friendly without all the lockdowns other states have endured.  We are seeing businesses flock from lockdown states and moving to Florida, bringing employees with them.  The real question is, what will happen in a few months once the vaccine is widely distributed and lockdowns end?

Some business owners we have talked to have had it.  Their fed up with restrictive policies and high taxes and they are not moving back no matter what.  It is probably safe to assume that anyone who has moved away from high tax states is not moving back.  The real question is, what will the people who wanted to move but just couldn’t yet do?  Will they further their plans to make the move or just stay put?

It’s Hard to Just Pick up and Move

Some people have ties to an area. Some businesses have been in the family for generations and walking away isn’t as easy as it sounds.  It takes careful thought and planning, and there are pros and cons.  If these states continue to raise taxes and have high crime, it may chase the next wave of businesses and residents away as well.

People have learned through this pandemic that many jobs can work from anywhere.  Companies have learned they can save high lease rates on buildings if their employees work remotely or move to less costly locations.  This pandemic may have been the impetus for a transition that benefits the company and its workers, and that ship may have sailed.

Florida is the big winner in all of this, and if it continues, strong demand may not slow up when Covid comes under control.  In this scenario, prices could rise further as we are not building enough homes to meet the demand.

It is true that business tends to follow cycles, but that is premised on demand rising and falling.  What if demand does not fall?  Supply is limited, and if demand stays constant or rises, we have more appreciation to go.  We could see a lot more.

Future Warning Signs

It is also true that nobody knows the future of Florida real estate, or the economy for that matter.  Rising oil prices and inflation could slow the economy and kill jobs.  Florida still has a lot going for it, and that might offset whatever happens to the economy.  Realtors do not know what will happen in the future.  We believe more sellers will decide to cash out in a month or two as Covid becomes safer, but will it be enough to meet demand?

The bottom line is the market is good, and we expect the future of Florida real estate to be good for a while.  There are a lot of wildcards in play that could affect things a few years down the road, like immigration, cost of building, oil, taxes, interest rates, inflation, etc. We are starting to see people cash out of Wall St and put it into main street.  Some people thought the Dow was overpriced at 18,000.  Now it is over 31,000.

Prices in Florida have risen, and we still might be a bargain.  Just not the bargain we were in the past.  To find out what your SW Florida home is worth, visit www.SWFLhomevalues.com It’s fast and Free.  Or call Sande and Brett Ellis 239-310-6500 

Good luck, and Happy Selling!

Home Affordability Index Nears All-Time Highs

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You would think rising home prices would decrease home affordability.  This simply is not the case as the home affordability index nears all-time highs.

Home Affordability Index Nears All-Time Highs

If you look at the chart, home affordability was greatest back in 2012.  Median home prices averaged $131,000 for the year compared to $289,000 in 2020.  Today home prices are higher, so we took the yearly average.

So, what would cause affordability to rise if home prices are also rising?  Interest rates.  Lower rates equate to a lower mortgage payment, and it offsets the rising cost of the home.  Therefore, we are saying there is more room for further price increases.

Home Affordability Index Nears All-Time High

The home affordability index currently stands at 16.  It went as low as 13 in 2012 and hovered below 16 for 5 years.  The other thing that is different today is that we have end users for every home and rental.  Back in 2005 we had speculators bidding up prices to flip with no real end user in sight.  It was a house of cards. Today’s market is no house of cards.  We have legitimate demand.  In fact, we have more demand than supply.

Even if rates rise, we have room for that in the index.  As you can see, traditionally the index stands between 19 and 22.  At 16, we have some room if rates rise.  If interest rates do not rise much, we have room for further price growth.

Furthermore, we believe Florida has been undervalued for years relative to what it brings to the table.  Sunshine, low taxes, and freedom to work are just a few, and people are taking notice.  With the transition to work from home jobs, Florida is on the radar.  We just might see affordability numbers rise above their traditional numbers of 19-22.  That makes sense to us.

Of course, nobody knows what exactly will happen.  We do not know how much the price of oil will increase, what interest rates will do, and how the economy will react.  We do not know if northern states will continue to increase taxes, and we do not know what Covid-19 will do.  What we do know and are observing all looks favorable to Florida.

Our best advice for buyers would be to purchase as soon as you can.  As prices rise, and interest rates rise, your next home will inevitably cost you more than it does today.  If you have a home to sell, think about doing it now.  Waiting to get more money down the road will only cost you on the buying end.  It may cost you more in higher rates than you will receive with a higher price.

Our best advice to sellers would also be, do it now.  You are in the driver’s seat, and that’s a fun seat to be in.  While the market looks on the up and up, we never really know how long these markets will continue like this.  While we can make the case for increased prices, the price gains may not continue to rise at the same rate we have just witnessed.

History shows us the market never gives advanced warning when it is going to turn.  Sometimes we see signs, and we report those.  We are not seeing those signs, but someday we will and there will be those that miss out.  It always happens and will until the end of time.  It is true in the real estate market and the stock market.  You can never time the top perfectly, just as you cannot predict a bottom perfectly.  It is only after it occurs that we can tell you with certainty.

If you are thinking of selling, call Sande or Brett Ellis at 239-310-6500 or visit www.SWFLhomevalues.com for an instant home valuation.

See last week’s article “National Housing Supply Shortage Predicted Years Ago”

Good luck, and happy selling!  Don’t miss this market!

New Opportunity in Whiskey Creek