If you look at the graph it would appear that real estate prices leveled off the past few months. Is that really the case?
Median and average prices are up 36% in June over 2020. That is a huge gain and expecting future gains like this is not sustainable. Let’s dive into 3 key price components to get an idea on where this market is headed.
- Most of the price gains you see reported monthly have already occurred. For instance, May’s numbers were up 38.7% over last year. June’s numbers are a continuation of those gains that have occurred because they are year over year, not month over month.
- It is not uncommon for prices to adjust backward month over month in June. Traditionally April and May are the biggest price months and prices slip back in summer. It is the seasonality of the market as to when higher priced homes sell in SW Florida. This graph doesn’t go far enough back to show this.
- Listings are on the uptick even though we are still too low. Listing inventory peaked in February 2019 and has been on a steady decline since then. Typically, inventory does not pick up in April, May, and June, but it has this year. Is the increasing inventory enough to make a dent in this market? Not yet, it is still way too low.
So, what can we take from all of this? Prices can continue to gain going forward, but not at the 30% plus rate. Future price gains depend on listing inventory, interest rates, the economy, and northern states buyers continuing to see Florida as a better alternative to where they are now. We doubt real estate prices leveled off, but gains will be more moderate going forward.
Inventory is Rising
Listing inventory is rising. Home inventory does not usually rise this time of year, however Covid may have influenced timing is seller’s decisions. Many sellers were prevented from coming to Florida to get their home ready. Others did not want to sell while they occupied the home during a pandemic. It is possible Covid put off some sales decisions and altered the timing of when listings hit the market.
Inventory levels will be something we watch going forward. It is quite possible all the typical historical seasonality and trends will be off until the economy and real estate market rebalances itself.
Is Now the Time to Sell?
If you are a seller, now is a good time to sell. Inventory is rising but not to an extent that will hurt home sellers. We are still seeing multiple offers on properties. Buyers still outnumber sellers. Sellers hold the advantage right now, and it is always more fun to sell when you have the advantage. When buyers hold the advantage, they do not care about how much you want or need for the home.
Buyers today are not in competition with the seller. They are in competition with other buyers for the home they want. When the market turns, the seller will be in competition with other sellers. Right now, sellers have little competition.
After the Fall, season will be here before we know it. We do not know what the Covid landscape will look like, which states will be open, or if we will have Covid issues at all. Right now, we do, and the economy may tighten down again.
We are writing this article before the Fed releases comments from their July meeting. How the markets react to these comments and the future of interest rates could impact the stock and real estate markets.
If you have contemplated selling, call Brett or Sande Ellis 239-310-6500 and get the facts. Home prices are going up, but for how long? If you just want a quick home price for your home, go to www.SWFLhomevaules.com Our online value system will give you a good estimate of your home’s value, and it will email you every month the price changes. Even if you don’t agree with the actual estimate, you will be able to see which direction the market is moving for your home.
Don’t Settle for Appraised Value
Of course, Sande and Brett Ellis will be happy to visit your home and give you a more detailed value for your home if you would like. We can show you how our marketing is getting sellers more than the price estimates of their home and how we generate multiple buyers. Don’t just sell for appraised value when you can get more in this market. You need the right Realtor to do this. Brett and Sande have over 30+ years and over 5,000 transactions experience, so we know our stuff.
We look forward to helping you!