May 2021 Southwest Florida sales prices rose 38.7% versus May 2020. Average sales prices were up 46% since the same time last year. Cash sales are up 176.5% since last year which is helping fuel these steep price increases.
Financed buyers are having a hard time competing against cash buyers. Cash buyers do not need an appraisal to come in for the sale to complete. To compete with cash buyers, financed buyers are waiving appraisal contingencies and agreeing to pay any deficiency the lender may require. Of course, this means the financed buyer must be able to show spare cash. FHA buyers are having a tough time in this market competing because they often do not have spare cash to meet an appraisal deficiency.
An appraisal is simply an opinion of value based upon what has happened in the past. We all know today’s home price is greater than yesterday’s, and tomorrow’s will be greater than today. In a rising market, that is just what happens. Appraisals do not account for that, so they are almost worthless in some cases.
To find out what your home is worth, go to www.SWFLhomevalues.com and plug in your address. Within minutes you will have your value, and the best part is it will email you a new price every month so you can track the changes.
Closed sales were up 82.4% over 2020, but keep in mind May closings were severely impacted last year due to Covid. It is possible more lower priced homes closed last May as we did lose some sales from higher end buyers who were afraid of potential Covid impacts. The 38.7% median price increase could be skewed by that fact. Any buyer that completed sales back in May of 2020 will be so glad they did. Last May’s prices were a bargain compared to today’s prices.
Time will tell, but 2021 prices might be a bargain compared to 2022 prices. We know there is a nationwide shortage of housing supply compared to demand. We also know Florida is an attractive state. Even if housing cools in other parts of the country when interest rates eventually rise, demand for Florida should still be high. Of course, like last May, it was better to buy when others were bailing on offers. Maybe it is a good time to sell and take some profit when everyone thinks prices will rise.
Should I Hold Out For More Money?
The herd mentality may get it right in the short term. In the long term they almost always get it wrong. If your neighbors are holding out to sell for higher prices later, that might be your sign. From our standpoint, the Florida housing market is good. Interest rates should stay low into 2022 and perhaps 2023, but nothing is certain. We will keep our eyes on inflation. The debate today seems to be, is it real inflation or temporary inflation?
Whatever it is, it is worse than people thought. Inflation may subside later this year, but for those paying higher prices at the store, it is real.
If you own property and would like to make a move but not sure if the time is right, or how it could work, give Brett or Sande a call. 239-310-6500 We have some programs you might now know about that could help. We also have data to help make the best decision for you. Plus, we are fun to talk to.
We always have new listings coming to the market, and they sell quickly. If you are a buyer and want to get on the Pre-Market list, call one of our buyer specialists at 239-489-4042 or register at www.LeeCountyOnline.com. We can notify you of new listings coming to the market that matches your criteria. Getting a leg up on other buyers is Huge in today’s market.
Good luck and Happy Buying and Selling!