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.
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?”