Monthly Archives: August 2021

Lee County Sales Prices Hit Pause in July

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Lee County sales prices hit pause in July, backing down from June’s numbers.  The median sales price in Lee County was $360,000 in July, down from $365,000 in June.  The average sales price was $469,072 in July, down from $505,976 in June.

Sales Prices Hit Pause in July

Sales prices are up year over year.  Median sales price is up 27.2% in July and the average sales price is up 23%.  We saw big price increases start last September and October, so we expect to see large double-digit year over year numbers for several months to come.  Once December and January roll around, we do not expect those numbers to be as large unless prices continue escalating.

We are still experiencing multiple offers on many properties, and many properties are going well over asking price.  Since school started, we are not seeing the hyperactivity we were though.  There are too many headwinds that should prevent the market from double digit gains we have seen in the past.

It appears overall sales prices hit pause recently.  This does not mean all homes have hit pause.  The market rarely speaks in unison, although this past year it pretty much did.

When interest rates rise, and they inevitably will, it will put pressure on upward movement of prices.  Once prices hit full market value rising rates could lead to a decline in home prices.  The question is, what is full market value?

I don’t know who has the answer, but my suspicion is we are somewhere in the neighborhood.  Full market value is relative.  We seem so high priced compared to where we were, but then again, I always felt we were undervalued locally.  We are still a bargain compared to other parts of the country.  For what SW Florida offers, we may still be a bargain.

It is natural that markets take a breather and assess the situation.  Stock markets do it all the time, and so do real estate markets.  Most agents I know wouldn’t complain if this market took a breather.  Agents have never worked harder, and many could use a vacation.

If prices do take a breather, it can be a wonderful thing.  Prices are at all-time highs, so sellers get the benefit of that.  They also get the benefit of low inventory, although it has been rising slightly in recent months.  It is always more fun to sell in a low inventory environment when prices are high.

If prices do level out for a bit, sellers will need to be more accommodative to buyers.  Right now, sellers hold all the cards, but one day the buyers will hold some cards too.  Buyers may not have to give delayed possession or their first-born son like they do now.  The playing field would be more level.

Then again, maybe our market will continue climbing.  We may hit a soft-landing spot for us all to look around, take a breath, and decide to go higher.  Or, after careful assessment, the market could top out and drift a bit lower.

Nobody knows what the market will do.  Whatever the market does, we will report it to you fairly and honestly.

Sellers, if you were waiting for the perfect moment to sell but holding out for more, now may be the time to act.  You might get more in the future, but then again you might now.  Most sellers wait too long and regret not selling sooner.  If you have a property you do not love or need, give Brett or Sande Ellis a call 239-310-6500.

We have a website that gives instant online estimates of your home. www.SWFLHomevalues.com  The best part it, it will show you the direction of your home price every month.  Even if it is off slightly on your value, you can use it to track the direction of your home price.

Good luck, and Happy Home Selling!

Distressed Sales Practically Non-Existent in 2021

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Ever since Covid-19 hit people have been speculating we would see another wave of foreclosures hitting the market.  Experts talked about how many homes were utilizing mortgage assistance and how this would impact the market in the future.  We see distressed sales practically non-existent in 2021 and going forward, and we’ll explain why.

Distressed Sales Practically Non-Existent in 2021

In June, we had 0 short sales and 3 foreclosure sales out of 1,748.  That’s about 1/10th of 1% distressed sales.

Those reported numbers of consumers in forbearance were overblown.  We did not see those kinds of numbers.  For those that did use forbearance, many have caught back up with their mortgage servicer.  Furthermore, some people filed for forbearance as an additional tool for mortgage relief not knowing what Covid-19 was going to do to the economy.

Cash Sales

Next, the media speculated that as people lost their jobs, those caught paying high prices would be susceptible to a real estate correction.  This simply is not true either. Closed sales in June were up 40.6% while cash sales were up 149%.  More people are paying cash or putting substantial down.  Unlike 2006, people have equity in their homes regardless of what the market does.

High Demand

Secondly, we have end users for every home.  Back in 2006 we had flippers who built homes to flip to the next person without an end user in sight.  Today, you can hardly find a resale or rental.  Not only do homeowners have more equity today, but demand has also never been higher.

Changing Landscape

Covid has changed the way people think about their living and work choices.  More people have decided to exit the city life and move to the rural and less densely populated areas.  People have decided they can work from home, and they rather enjoy it.  Florida has become a popular destination for the work from home crowd.  If you are going to pack up and move, why not move to a low-tax state with beautiful weather?

When the market shifts, and eventually it will because all markets shift, we do not believe this market will be in trouble.  Most people vision real estate markets going up a cliff then straight down a cliff.  The reality may be our market heads up for a period, then levels off when it reaches an affordability point.  What happens after there is anybody’s guess. The market could stay level, generally rise slowly along a bumpy road, or decline slowly along a bumpy or uneven road.  Supply, demand, and affordability will one day drive the market.

Right now, demand outweighs supply.  We still have more people that wish to move here than leave.  Interest rates are low, and even for many locals the market is still affordable.  For out of state buyers, Florida seems like a bargain compared to where they are coming from.

Real estate values are all about perspective.  To a buyer that looked 2 years ago and did not pull the trigger, we look high priced.  To a new buyer shopping from out of state, we look like a bargain.

Eviction Moratorium

We do look for the end of the eviction moratorium soon.  We believe this has placed an undue burden of renters as it has taken supply out of the market.  Once landlords can evict tenants not paying rent. More rentals will come back on the market and open opportunities for other renters.

Property to Sell?

Do you have a property to sell?  Are you wondering if now might be the optimal time to sell?  Talk to Sande or Brett Ellis at Keller Williams Realty 239-310-6500 We can discuss your options. Our marketing reaches out of state buyers willing to pay Top Dollar for your home. We have a website www.SWFLhomevalues.com that will give you an instant price estimate of your home. Our system will email you every month your new price so you can keep track of your equity position the market’s direction.

Always call the Ellis Team at Keller Williams Realty!  We are here to help.

Local Listing Inventory Grew 3.41% in Past Week

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We have been tracking inventory levels for years now and we have spotted an interesting trend.  In the past week, local listing inventory grew 3.41% in Lee County Florida.

Local Listing Inventory Grew in past week

A few weeks ago we showed a graph we will repeat again this week.  It showed inventory bottomed out in March at 1,510 homes and rose each month in April, May, and June.  Since these official numbers were released, we decided to track daily numbers to see if the trend continues.

Local Listing Inventory Grew Last Week

On August 4th, inventory stood at 1,379 homes.  Keep in mind, these are not official numbers and there can be other listings from agents who are members in a different MLS.  So, when you see these numbers and wonder why they are less than the 1,510 I mentioned was the bottom, you’ll know why.  Using the same criteria, listings have risen to 1,426 by Aug 11th.  This is the 3.41% rise.

We still have a very hot market.  What this is telling us is that some properties may have had 20 offers and now may only receive 5.  New listings and back on market listings are outpacing the closings, hence the number is growing.

We have noticed some buyer fatigue at these prices.  It could also be that many buyers were shut out of the process and were forced to rent.  Rent prices have shot through the roof.  When the eviction moratorium finally ends, rent prices may come back down.  The end of the moratorium could lead to more listings as well.  Some owners wish to sell at today’s prices but have not been able to get a non-paying tenant out.

As we mentioned earlier, we still have a strong market.  So far, all the cards have been in the seller’s favor, and that may change.  At some point we may enter a more balanced market.  Listings are still too low, and it is a seller’s market.  As more listings enter the market, it could shift to a more neutral market.  When that happens, prices may not increase like they have.

In fact, we can almost predict prices will not increase like they have.  Statistically, we cannot have prices rising 36% year over year forever.  At some point buyers turn off and do something else.  Lately, cash buyers forced financed buyers out of the game.  When these markets shift, inevitably we see financed buyers start winning deals again.

Time to Sell?

We always tell sellers; it is more fun to sell when there is less competition.  Right now, there is not enough competition, but we can see it growing slowly.  If this trend continues, buyers will have more choices.  This is not to say prices cannot keep climbing.  They absolutely can.  Will they, who knows?  Whatever prices do, do not expect 36% increases going forward.  Rising interest rates will also eat into buyers purchasing power.

Florida Is/Was the Place to Be 

During the pandemic, Florida absolutely was the darling of work from home workers tired of lockdowns and high taxes in Northern states.  Today, we still enjoy low taxes and no lockdowns, but our Covid numbers are high.  How will that influence buyers going forward?  When will our numbers settle down?

Employers have begun calling employees back to work or paying them less if they work from home.  As the Delta variant spreads, employers have had to back off the return to workplace.  When normalcy returns, will the return to workspace affect the work from home demand Florida has enjoyed?  How would this affect sellers?

With rising inventory, buyer fatigue, and potential return to work situations, it might be time to think about selling a home you no longer love.  Competition from other sellers is low and even though market is great, this might be a great time to capitalize.

The Ellis Team tracks the market daily, so our clients always receive up to the minute data that can affect decisions.  If you are tracking a hurricane, you want the latest data to make best decisions.  The same is true in the real estate market.  The Ellis Team has the data.  Call Sande or Brett Ellis 239-310-6500 or visit www.SWFLhomevalues.com to get a quick estimate of your home’s value.

See last week’s article “Have Real Estate Prices Leveled Off?”