We are studying preliminary sales numbers for August from MLS. The numbers suggest a soft landing for sales prices in SW Florida.

Golf courses in Florida are mostly flat because much of Florida’s terrain is flat. Up North, many golf courses have elevated greens and greens that are downhill.  This past year our local real estate market felt like buyers were having to hit elevated shots to an elevated green to get their offer accepted.

Golfers know that for every elevated green there may be future shots to a downhill green.  Buyers have the same assumptions as golfers.  They believe what goes up must come down.

Soft Landing for Sales Prices

The reality is, the elevated green is the new level playing field.  While we will still have multiple offers on properties due to low inventory, we don’t believe the overall market is going to climb like it did this past year.  In fact, we are already seeing in the numbers a leveling off.  This is a trend that has been happening for about 3 months, but because it doesn’t feel like a flattening market, sellers and agents have not recognized it.

If you speak with real estate agents lately, they will tell you the market has cooled in the last few weeks.  The market has not cooled, it has leveled. When sellers bring a property to market correctly priced, there are many buyers.  When a property enters the market overpriced, we don’t have 50 buyers jumping at opportunity to bid on it.

Diminishing Price Increases

We saw 36% price increases year over year, but as we enter future months those will begin to diminish as prices have stopped rising.  We will still see year over year gains until one of two things happen.  As prices are stagnant, we will either run out of months and stats will show a leveling or the market will move once again.

If the market does not make a move, you will see prices staying the same.  We are already seeing this in the month over month prices.  Unofficial numbers for August show an average sales price of $466,281 and a median sales price of $365,000.  July 2021 official numbers showed an average sales price of $469,072 and a median sales price of $360,000.  In essence, the average price went down about $3,000 and median price went up about $5,000.  Keep in mind, these are still unofficial numbers.  There could be more sales reported from MLS participants from other boards throughout the state.

These numbers are believable though because we have been seeing this trend. Prices since April and May have leveled off.  Some is seasonal, and some is buyers have maxed out.

Sellers Should Sell Now

Listing inventory has leveled.  It’s not going up or down.  We are telling sellers now may be the time to sell. There is not much advantage in waiting now. We have low inventory.  Prices have stalled.  Interest rates are expected to climb when the Fed ends tapering.  This will put pressure on buyers and further cap future gains.  It just feels like this market is now fully valued unless something changes.

For years we said Florida was undervalued.  Today, it might be fairly valued.  We are not expecting prices to vary wildly.  We believe we are in a trading range.

Buyers should take advantage before rates rise and sellers should take advantage of the new normal in pricing.  Both sides can do well if they do not get greedy.  Waiting for a better opportunity tomorrow just doesn’t sound like the best plan.

If you’d like to talk about the market, call Sande or Brett Ellis 239-310-6500 or visit www.SWFLHomevalues.com to track your home’s value monthly.

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

While analyzing current market statistics we see September inventory levels rise slightly in select price ranges.  Six out of nine price ranges saw an increase in the month’s supply of inventory while five of nine saw an increase in the raw number of listings.

September Inventory Levels Rise Slightly

Four out of nine price ranges saw an increase in the number of sales.  In a hot market, you can only sell what you have.  As prices increased, some homes graduated to the next price level which increased their inventory, and increased chances of a sale in that price range.

With multiple offers, sometimes we would see a listing in one price range result in a sale in a higher price range because it sold over asking price.  For this reason, we must be careful about analyzing the numbers and interpreting what they really mean.

Inventory Still Historically Low

The overall market still stands at less than 1 month supply, which is low.  A buyer can assume any listing in any of the price ranges could be receiving multiple offers if they were priced correctly coming to the market.  There are some overpriced listings, and no matter how hot the market is, may never sell.

As more listings enter the market, buyers have slightly more choices.  The good ones still get swallowed up fast.  It is important for buyers to have their ducks in a row before they go shopping.

We monitor the monthly numbers, and we are studying the weekly numbers.  We saw a 9-home decrease in the weekly numbers which means more homes came off the market than went on in the last week.  Because this market is so hot, we expect volatility in those weekly numbers.  It could also be sellers were waiting until after Labor Day to place their home on the market while buyers did not wait.

Interest rates rose slightly in the past week.  Rising rates increase the cost of borrowing for buyers.  Initially rising rates adds motivation to buyers to purchase before rates go higher.  This assumes buyers were sitting on the fence.  In our current market it is more likely buyers could not find a home as the winning bid, so they settled for a rental for another year.

Rents are sky high currently. As tenants come off lease we expect them to look to purchase if they can find a home.  As the eviction moratorium abates, we expect rent prices could come down.

Eventually rising rates will hurt home buyers.  The wildcard will be if home buyers soften due to rising borrowing costs, how does northern buyers relocating here compensate for that?  This past year financed buyers were not winning many bids anyway so rising rates would have made no difference.  If buyers continue their march to Florida, rising rates might not matter.  We will keep our eye on migration patterns.

Is Now a Good Time to Sell?

Many homeowners are contemplating if now might be the time to sell.  Prices have risen a good amount, and some are surprised at how much their property is worth.  Homeowners also realize we are not likely to see price gains like this going forward.  Nobody knows the future and where prices will go. We think it is safe to say prices will not rise 36% in one year again anytime soon.

If you have been wondering if now might be the time to sell, call Brett or Sande Ellis at 239-310-6500 We will be happy to speak with you and discuss your options.  Some sellers appreciate our Free and easy home valuation tool where you can see your home’s value online instantly.  The system will also email you updates every month so you can track your home’s value going forward.  This is great for people who do not want to sell now but are interested in their home’s value.

Good luck and Happy Home Buying and Selling!

See last week’s article “Local Home Sales Highest on Record“