Monthly Archives: April 2021

Housing Inventory Levels Fall Again in April

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It sounds like a broken record repeating itself for the past two years.  Housing inventory levels fall again in April.  We did see a glimmer of hope for homebuyers in the $400-$600k range and in the $600k-$1 million range as listing inventory increased.  However, the market scooped it all up and sales increased which drove their months’ supply of inventory down with it.

Housing Inventory Levels Fall Again

Not only did overall inventory decline to a .78-month supply, but every single price range also saw drops in levels as well.  This is a broad market inventory decline across the board.  Many times, we will see segments of the market doing better than others. In this case, all price segments are seeing housing inventory levels fall.

Housing Shortage

Recent reports by Freddie Mac indicate the US is 3.8 million homes short of meeting the United States housing demand.  This shortage has led to buying frenzies across the nation at a time when millennials are entering the market. Combine with the fact that people are relocating more as they learn to work remotely, and you have a recipe for increased demand and not enough supply.

Historically low rates have also fueled people to either stay in place and refinance or make the move.  Now that rates have risen a bit from their lows, less people are refinancing.  Because of this, we believe 2021-2022 will be the timeframe when more people decide to sell what they have and make a move.

It will be interesting to watch inventory levels.  As more people sell so they can purchase, will this increase inventory?  Because we have this shortage it may not make a big enough dent.  Demand may still outstrip supply.

We have noticed an uptick in home sellers wondering if now might be the time to sell.  They like that prices have risen, and they are beginning to weigh their options.  Some sellers are questioning how much they love their home and if they should risk holding on to it longer.  Prices have risen significantly the past several years, and this might be the point in time home sellers have been waiting for.

How Long Will it Last?

The dilemma is how long will this last?  Nobody wants to leave money on the table, and yet, sellers do not want to wait too long and miss the top of the market.  The reality is you will never know the top of the market until it has passed. By then, it is too late and headed down.  When the market heads down, it can be a long, slow ride lasting several years. Buyers do not like buying when the market is headed down.  Once word gets out, some buyers shut off out of fear and wait until the market bottoms.  That process can take several years.

Our best advice is, if you love the home you are in and it suits your needs, you do not need to do anything.  If your home no longer suits your needs, and you do not absolutely love it, now may be the time to explore.

For over a decade many SW Florida homeowners were trapped in a home they did not love, but because the market turned so drastically, they were trapped.  We do not see any signs today’s market will be like 2005.  What we are saying is it can be frustrating owning a home that does not suit your needs for too long.

Always Call the Ellis Team

Call Brett or Sande Ellis 239-310-6500 and we can discuss your options.  We will talk about where you would go if you did sell, and what timeframe would work for you.  Or, if you are just curious for now, you can go to www.SWFLhomevalues.com and get an instant and free home valuation on your home.  It emails you a report in minutes and is a good starting place for a conversation.

Whatever your housing situation, Brett and Sande are here to answer your questions.  We should talk!

Good luck and Happy House Selling!

Builders Changing Sales Tactics to Mimic Home Sellers Success

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Just when you thought you had seen everything, along comes another change in the real estate market.  We are seeing SW Florida home builders changing sales tactics again, and it’s not good news for the buyer.

Builders Changing Sales TacticsTo mimic the success home sellers are having through their Realtor, several home builders have instituted a highest and best offer format on their homes.  Basically, it works like this. The buyer makes a binding offer on a lot.  There is typically a stated priced however the buyer can offer highest and best.  The winning bidder chooses the home they want built and they go to contract.

Buyer Pays the Difference

If the home does not appraise, buyer agrees to pay the difference.  Once you bid up the price, you’re buying it regardless of whether you pay cash or finance it.  If the buyer is financing it, they will have already been pre-approved to bid on the property and shown financial ability to pay what they are biding.

Previously, home builders have been limiting sales contracts so they could keep up with price increases and maximize profit.  Home sellers may have shown builders the way as builders want in on the fun as well.  All of this puts additional pressure on buyers because they do not know what it’s going to take to win the bid.

I spoke with a homebuilder who used this in another city in Florida.  The lot had a $25,000 stated lot premium and was offered out for highest and best.  The winning bidder bid it up to $170,000 and won the bid.  They then went to contract with the house on tip of that plus options.

The builders argue that it is not fair to sell to whoever shows up first.  They are getting as many as 100 people per day through their model homes.  That is 700 per week.  If a builder releases 2 lots and calls for highest and best, they now have 700 from this week, and thousands from previous weeks who have seen the property.  Builders love this because not only are they raising prices on the house as costs rise, but they are also maximizing value on the total package.

New Construction Prices Will Pull Resale Prices Higher

Rising new construction prices can help pull resale prices even higher when you have such limited supply and strong demand.  It used to be when building prices got too high people would switch over to resale and vice versa.  Now there is no switching.  Buyers must jump on the first home that meets their needs and come with their best offer.

Buyers are not competing with the seller, or the builder.  They are competing with other buyers.  We have great tools on how to win bids when you are not holding all the cards.  These tools help, but they are not an automatic win for buyers in every circumstance.  You’ve got to play the cards you are dealt, and a great Realtor can help you play them as best as possible.  If you are a buyer, call the Ellis Team at Keller Williams Realty 239-489-4042 or visit www.LeeCountyOnline.com

If you are a seller, you need an experienced Realtor.  Buyer agents are trying all kinds of tricks and shenanigans trying to win deals.  Some are legit, and some are not.  An experienced agent can keep you from going down the wrong path with the wrong buyer.  If something doesn’t seem right, you need an agent with experience to sort that out.

Getting Top Dollar For Your Home

With builders changing sales tactics, so too must home sellers. There are additional ways to maximize your sale price.  Brett and Sande Ellis know how to do this as well.  If you are looking for Top Dollar, call Brett or Sande Ellis 239-310-6500 or visit www.SWFLhomevalues.com to see what your home is worth.

Do you know what your home is worth?  If you haven’t checked in the last week, then you really don’t know.

We have many happy home sellers that are glad they called the Ellis Team at Keller Williams Realty.  Let’s talk and see if we can help you too!

Ellis Team Open House

Cape Coral Waterfront Pool Home Sat 12-3 PM

Took My Own Advice

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For the past year or more we have been telling readers now may be a good time to sell.  The market statistics prove that, and yet not everyone is doing it, including Realtors.  This year I took my own advice and decided to make a move.

Took My Own Advice

It’s not that we were unhappy where we lived.  It was a great neighborhood and a great house.  Our needs changed, and this market provided an opportunity that was too good to pass up.  If you love your home and your needs have not changed, you don’t need to sell just because there is an opportunity.  But if you have been thinking about what a move would look like to better your situation, the opportunity is there.

Took My Own Advice

For us we had 4 children, and the last is graduating high school this year and moving on to college.  My wife and I do not need a 5-bedroom 2 story home for just the two of us.  We were torn because we loved the community so much.

We put in a contract at a new home community.  That home is schedule to be built this year.  Later we listed the home we lived in and it sold within 9 days.  The buyers are thrilled with the home and we were able to jump into a rental that opened while ours is being built.

Not only did we get a good price for our existing home, but our future home has also already gone up $27,000 in price since we signed the contract, and they haven’t even broke ground yet.  This market is a win/win market for buyers and sellers.

Sellers get to take advantage of Top Dollar.  Buyers also win, because home prices are rising, and about a week after they move in the home is worth more than what they paid for it.  In fact, many times it is worth more before they close.

Values Are Changing by the Week

Our home for example appraised for $20,000 more than what we sold it for.  You might say how did you sell it for Top Dollar but below appraised value? After we signed the sales contract with new buyers several comparables closed which pulled the value higher.  It is a fluid market and values are changing by the week.

Do you know what your home is worth in today’s market?  If you have not had a thorough market evaluation and tested the market, then you really don’t know.  In the absence of sales data, we have been forced to put homes on the market at prices higher than any recent sales.  Then along comes several buyers we attracted through our marketing, and it sells for even higher than list price.

The market is setting new valuations right before our eyes, and the only way to get top dollar is to put the property on the market and market it.  We may set a price higher than the last sale and the market may scoop it up anyway, and then some.  They key is attracting multiple buyers.

Best Way to Determine Market Value

May times a seller has a tenant or family member that wants to buy their home.  They get an appraisal to find out the value.  But is that really the value?  An appraiser is looking at yesterday’s value because all they can work with is what has happened in the past.  They do not consider what is happening today, and what will happen next week when we place a home on the market.

If you own a home and want to explore your options, call Sande or Brett Ellis at 239-310-6500  Our marketing is different, and we can show you how to maximize the sale of your home.  You’re going to need it where you’re going, so why not get it?

We can even help you with your next home.  Or visit www.SWFLhomevalues.com to get an idea of what your home is worth.  Our website will even email you your new price every month so you can keep track.

Good luck and Happy Home Selling!  Always call the Ellis Team at Keller Williams Realty for Top Dollar!

SW Florida Home Appreciation Rate Ratchets Up Since September 2020

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According to william pitt sotheby’s SW Florida home appreciation rate intensified beginning in September of 2020.  The official average single family home price in SW Florida was $391,168 and by February 2021 it rose to $486,406. That is a 24.35% gain in just 5 months.  It was slightly higher in January.

SW Florida Home Appreciation Rate

The median home sales price was $295,000 in September and rose to $329,950.  That is a 11.85% price gain in just 5 months.  For the year, average home price gains were 32.3% while the median was up 22.2%. The SW Florida home appreciation rate is very high.

As you can see, the average was up 32.3% but 24.35% of that all happened since September.  Median prices were up 22.2% in the past 12 months, with 11.85% of that being in the last 5 months.

We have been talking a lot about falling inventory levels, and at last check inventory has fallen yet again to the lowest level we have seen in decades.  Demand is strong which is causing prices to rise.  As prices rise, affordability shrinks. Back in early March we were reporting how home affordability was near an all-time high nationally.  That story is available on our blog https://blog.topagent.com In fact, all our articles are available on the blog dating back years.  The blog is a great way to keep up with how our market is doing over time.

Today home affordability is shrinking for two reasons.  Prices have continued to climb, and interest rates have risen.  Rates earlier this year were around 2.75%. Today they are about a half percentage point higher.  Rising rates are like a hidden tax borrowers must pay.  It raises the cost of buying a home, and you do not really get anything for it.  When you purchase an upgrade for a home you at least get something for it.  Not so with rising rates.

Will rising rates be the headwind that stops the real estate market in its tracks? We don’t think so, at least not in Florida.  It does take some fuel from the fire though. Affordability caps a market, so it can only appreciate so far unless you have a secondary home market where wages don’t enter into the equation as much.

Florida is blessed in that all kinds of people want to live here.  We have primary workers, remote workers, secondary homes, retirement homes, investment homes, etc. Demand is strong from all segments, and people are flocking to the area and escaping other areas.

We see demand remaining strong in Florida, but rising prices and rising rates do put pressure on home buyers.  Many buyers will be forced to settle for a home they do not love, but happy to be in a location they prefer over where they came from.  This may be a case where a buyer buys what they can afford now and rides the wave, propelling them to their dream home later.

In an instant gratification world people like to get what they want now. Historically people bought what they can afford and work their way up the ladder to what they liked later.  We may be returning to that model.

Many people are stunned to find out what their home is worth today.  If you have been contemplating a sale, you should call Brett or Sande Ellis 239-310-6500.  For those of you that have not thought about selling, let me ask you a question?

At what price would you sell your home?  What number would make you move?  When you come up with that number, call Sande or Brett.  Perhaps we already have a buyer in our database looking for a home like yours.  We might be able to make that Make Me Move number work for you.  Call us 239-310-6500.

Good luck and Happy Easter and Happy Passover!

Check out 3 New Hot Listings This Week!

16613 Panther Paw Ct

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South Pointe South New Listing by the Ellis Team
New Listing in South Pointe South

 

15820 Portofino Springs Blvd Unit 101

Villa Medici Townhome Full of Upgrades
New listing in Villa Medici full of upgrades by the Ellis Team at Keller Williams Realty