January 2022 saw record home sale prices set as we started the year out with a bang. Median home sale prices rose to $413,500 from $327,250 last year. That is a whopping 26.4% increase over last year. Average home sale prices rose to $574,393 from $489,738 last year. That is a 17.3% increase.

Record Home Sale Prices

We did notice a drop in average sale price from December. Last December averages sale prices were $605,784. We do not get too hung up on average sales because a few large sales can skew the average. Therefore, median is most used. For instance, the Ellis Team closed one for about $3.8 million in December that would skew the numbers up on the average.

Inflation and Housing Prices

What effect will rising rates and inflation have on housing prices?  That is what we are going to watch. Typically, the Fed raises rates to slow down the economy.  An overheated economy leads to inflation which hurts the most vulnerable among our population. The Fed is determined to stop rising inflation with a series of rate hikes and elimination of the bond buying program that has infused so much into our economy. This will take money out of the money supply which will serve to slow down the economy and also make rates rise.

Where it gets tricky is the global economy. In the old days the US would raise rates and that would be that. Today we no longer live in a bubble and have to look at how the dollar stacks up against foreign currencies and economies. It could be that foreign governments choose to invest in US Treasuries which would pull rates back down. Keep in mind there is an inverse relationship with prices and yield, so as the price goes up the yield goes down. It will be interesting to watch how much interest rates will go up.

Price of Oil

The other wild card is the price of oil. Rising oil prices can be inflationary. We have a graph that shows key moments in history where when oil reached a certain point it led to recession. We are no super economist, and you know what they say about economists. It just feels like to me if oil were to hit $115/barrel or so it would not be good for our economy. As I write this article West Texas Intermediate crude oil is just above $94. We will be watching this number closely along with the price of the 10-year treasury yield.

Many sellers are holding out for higher prices, and their hunch to this point has been good. Nobody knows how much longer prices will increase. We also do not know how fast or how much interest rates will increase. We would say the cost of borrowing is set to go up. Rates have risen in the last year, and we expect more of that. If your home does not fit your needs, making a move today may be in your best interests. Waiting to make the move when borrowing costs are higher can cost you in two ways.

Interest Rates

If you are getting a mortgage on the next house, your borrowing costs will be higher by waiting. Secondly, all the buyers looking at your home will now qualify for less home when rates rise. For every 1% rise in rates takes away 11% purchasing power from borrowers. This means the pool of buyers for the home you are selling could shrink as well.

The good news is today we have more buyers than sellers. It is always more fun to sell in this environment. In the future we may not have quite the imbalance, which wouldn’t be as fun. Waiting can be a gamble.

If you’d like to discuss your options, call Brett or Sande Ellis 239-310-6500. We can consult and give you answers to your questions. Or visit www.SWFLHomevalues.com to get your home’s value instantly.

Let us know how we can help. We are easy to talk to, so we look forward to hearing from you.

Today we are reporting SW Florida single family daily inventory levels down 23.66% since Dec 8th, 2021. In roughly two short months we’ve managed to whittle down single-family inventory by 332 homes in Lee County. Back in December inventory stood at 1,403 homes and today it stands at 1,071.

Daily Inventory Levels Down 23.66% Since Dec 8

Sellers can attract multiple offers if their home is marketed correctly and choose from an array of buyers.  Buyers on the other hand are increasingly frustrated by the lack of inventory. They must compete with other buyers for fewer opportunities.

Dare to be Different

At the Ellis Team at Keller Williams Realty we work a bit differently than most Realtors.  This is why we are able to get our buyers into homes in an increasingly frustrating market. We are also able to get our sellers Top Dollar because we study the market in greater detail.

In a tense, stressful market it pays to work with a team that has been through changing markets before and knows how to operate.  The average Realtor has only been through one cycle. Therefore they do not understand what it truly takes to succeed for their clients in a rapidly changing market.

When the market makes a move, you must spot it quickly.  Our team is working the MLS every day and we track numbers religiously. When the market makes a move, we want our clients to know first.  Speed wins in this market.  You cannot tell where the market is going unless you know where it has been and where it is this minute.

We hope you appreciate us letting you in on some of the statistics we track and what indicators we look at when we give advice to or clients. We appreciate that so many Realtors read our column and share with their clients as well.  You do not want to be caught with week old data in a changing market. Unfortunately, we write this column on Monday or Tuesday before it prints on Saturday so it is the best we can do for readers.

Best Information Wins!

If you are in the market to buy or sell, you will want to call us for the timeliest information available.  We are listing properties one week, and by the time professional photos are taken and the home is ready for MLS we are adjusting. We have added tens of thousands of dollars to our sellers’ pockets by having up to date info on the market.

If we did a market analysis for you several months ago and you are thinking of selling, we need to talk again and update that price for you.  Chances are your home has gone up in value significantly, and the new data may affect your decision.

2nd Opinion

If you have consulted with another Realtor and did not like their opinion, perhaps it is time for a second opinion.  This offer is not an attempt to solicit a listing from any currently listed homeowner. We are simply saying your home may be worth more than you realize.

Our team has had great success already this year bringing several homes to market and getting Top Dollar. It is not uncommon to sell our listings above appraisal value. Buyers will pay above appraisal value even if they are getting a mortgage, and we can show you how.

If you are considering selling if the price is right, call Sande or Brett Ellis today 239-310-6500. We are experts at getting your home sold fast and for Top Dollar. Perhaps this is why the Ellis Team has been voted Best in Real Estate by News Press readers for 7 years in a row.

You can always use our online property value tool at www.SWFLhomevalues.com or search the MLS at www.LeeCounytyOnline.com. To get the timeliest information on what the market is doing and how to capitalize, give Sande or Brett a call 239-310-6500.


Good luck and Happy Selling!

I think it is safe to assume nobody studies the numbers for the SW Florida real estate market like we do.  Perhaps it is because I graduated with a degree in Finance that I study the cause and effects of the market.  This week I want to share a leading indicator.  The inverted yield curve predicts upcoming recession and stock market corrections.

Inverted Yield Curve Predicts US Recessions

Because of this we are better able to spot emerging trends that can affect our customers.  We were one of the first to predict the market change back in 2005, and back then everyone said we were crazy.  While we educate our customers first, I like to let readers in some metrics I will be watching going forward.

A lot of sellers are asking us if the market is going to crash.  My answer would be which market, the US market, or the local market?  For the record, I am not saying either is going to crash as the setup for this market is nothing like it was back in 2005. If it were to crash, or even suffer subtle setbacks it would surely mean that interest rates are rising, and the economy is faltering.  We know interest rates are already rising and predicted to go higher as soon as March.

Let’s look at the economy.  There is one leading indicator among others that predicts the economy, and that is the inverted yield curve.  Technically the inverted yield curve refers to the 10-year to 2-year spread.  Right now, the spread stands at .62% It has been falling since March 2021 when it stood at 1.58% difference. You can see it is declining, but it does that.  We will be watching to see if it reaches 0.

Did you know that the inverted yield curve has accurately predicted every single recession in the United States since the Fed has been publishing data on this back in 1976?  It has, and that is a scary accurate leading indicator.

This is why the Fed’s hands may be tied.  We have handled inflation all wrong heading into 2022 and it leaves the Fed with few choices.  They need to stop borrowing money and taper the bond buybacks.  They are doing this, and this program will take trillions out of the economy by end of March.  This will lead to higher rates.  Secondly, they must raise interest rates.  Some say look for 3-6 hikes this year.  But doing so could cause the economy to stall and lead to recession.  Recession is not good especially with such high inflation.

The working men and women in America are being hit the hardest.  Wages cannot keep up with rising cost of living and people are getting further behind.  If recession hits, some could lose their jobs.

Some people say the economy is on fire.  January numbers show 467,000 jobs were created.  Were they really?  We have 10.9 million unfilled jobs in the United States, and they report 467,000 jobs were created.  Perhaps 467,000 people decided to go back to work because they had to. Be careful which headlines you read.  Track your own numbers.

We cannot say what will happen. There are too many wildcards and too many decisions to be made by others.  We can report on what we look at to evaluate.  The inverted yield curve predicts recession before it happens.  It may or may not happen, but it will be fun to know ahead of time if you look at the right tools.

We hope you enjoy reading about how we analyze the market. It may be kind of geeky, but if you are buying or selling, it pays to know a geek.

If you are thinking of selling your home, call Brett or Sande Ellis 239-310-6500. We might be geeks, but we’re easy to talk to and we know our stuff.  Or visit www.SWFLhomevalues.com for an instant and Free home valuation on your home.

Good luck and happy selling!

Open House Saturday 12-3 PM

12790 Meadow Hawk Dr $450,000

2021 year end sales prices ended up at $360,000 median sales price and $506,033 average sales price.  The year end median sales price rose 24.6% while the average sales price rose 28.2%  The year end sales price is an average of all the sales that occurred in that year and is compared to the average the previous year.

2021 Year End Sales Prices Southwest Florida

Last week we wrote about how December median sale prices rose 27.6% over 2020.  It is always interesting to view the month price change in context with the yearly price change. It appears home prices sped up in the 4th qtr. which helped propel the yearly to the 24.6% price gain.

The question becomes, will the rapid price growth continue or will prices stall? We saw institutional investors come into the market and buy up as much inventory as they could.  They turned these properties into rentals and raised the rents. This put pressure on renters and first-time home buyers alike.

With Wall Street reaching record highs and retreating, will institutional investors keep paying top dollar for residential real estate going forward? They may, but if the economy turns in the 2nd half of 2022, they may not be willing to spend as much.  If institutional investors pause buying and normal buyers are hit with recession, the real estate market could become interesting.

Florida sits in a better position than many states, but you must wonder if homes become harder to sell up North, will the money keep flowing to Florida like it has in years past?  Even if money does continue to flow, at what rate?  Will we see 25% price gains going forward?

25% appreciation rates are unsustainable, and if you have them for too long it is a matter of time before things go back the other way. Some sellers are questioning whether now the time is to sell.  The answer is probably homeowner and situational specific. Additionally, nobody knows how much more upside is left in this market and for how long.

All we can say is it is more fun to sell right now than buy. Listing inventory is low. Sellers usually wait to sell until they see the market turn, and by then it is too late.  Have you ever heard the term “You never want to catch a falling knife”? Buyers do not like to buy when the market is falling. They prefer to wait when the all-safe is given, which means the market begins to go back up.

Some people will always need to buy, and others will always need to sell no matter what the market is doing.  It is the discretionary seller that may be holding out for one last sign the market is peaking. Stock analysts always advise not to time the market. Rarely will you get it exactly right, and only in hindsight will you know if you did.

If your home does not work well for you, or if you have better uses for your equity, now might be the time to explore your options. Do not sell just because the market is high. Have a plan. Who knows, the market may go higher in 2022. However, do not hold something that doesn’t work for you simply because the market went up in the past.  Just because it went up last year does not mean it will go up this year. If your home is not ideal for you, let’s sit down and talk about your options.

Call Sande or Brett Ellis 239-310-6500, or visit www.SWFLhomevalues.com to get an Instant and Free online valuation.

We can discuss your options and help you make better decisions for your family.  This may be a generational wealth decision for your family, so let’s get this decision right.

Good luck and Happy Buying and Selling!


January 2022 State of the Market Video

Home sale prices rose sharply in December climbing to a median price of $402,000 and an average price of $605,784.  Median prices rose 27.6% versus December 2020 while average prices rose 32.9% The number of homes closed dropped 13.2% from December 2020 primarily because there is less inventory.

Home Sale Prices Rose Sharply in December
Home sale prices rose sharply in December 2021

Cash sales accounted for 37% of all single-family home sales in December. We did see a 3.5% rise in new listings in December, so some homeowners have decided to sell while the getting is good. There were only 5 foreclosure home sales in the county and only 1 short sale. For those so-called experts that were predicting distressed sales hitting the market in 2021, they were sadly mistaken.

Sellers Wondering When Market Will Top

Many homeowners are concerned about rising interest rates, as they should be.  Traditionally rising rates limits home sale prices. While many financial gurus have predicted 5-6 Fed rates hikes in 2022, we are not so sure. Many experts believe the Fed will have a difficult time raising rates as drastically amidst a rapidly falling stock market.  While we have seen stock market volatility, it remains to be seen how the market will fare throughout 2022.

The stock market, and the real estate market’s future may be tied to inflation and what the Fed must do to get it under control. Taming inflation through the Fed is the toughest way to go and takes the longest. Typically, there is a lag between rising rates and slowing down the economy to fight inflation.

The president has so many other tools he could use than just using the Fed, but we doubt he will go that route so here we are. Today the 10-year note stands at 1.784. Keep your eye on that number.  Some believe it could go to 2.5 or even 3. Thirty-year mortgages are pegged to this number, so the higher it goes, the higher mortgage rates will be.

Marketing Muscle Leads to Multiple Offers

Last weekend we sold 3 properties. Both homes sold over asking price.  We attracted buyers both locally and targeted buyers in high tax states. Many open house attendees were from those high tax states we advertised in.

We plan to do a future article on how to properly evaluate multiple offers and how to negotiate them. Most people believe it is as easy as picking the highest price. Agents are getting very creative in writing their contracts. Financed offers are disguised as cash in hopes of winning the bid. It takes a savvy agent with experience to sort out true facts of the buyer which are critical in selecting the best offer. It does no good to select the highest offer only to find out buyer is getting financing and does not have money to cover an appraisal deficiency.

Some agents are writing ridiculous offers only to win the bid and knock the price down later when they can’t perform.  If they can catch the seller days or weeks down the road, perhaps they will be in a position where they must take less.  While this tactic is less than honest, it pays to verify facts before accepting an offer.

Strong Listing Agents

Real estate agents can be very pushy trying to get their buyer’s offer accepted. You need a strong listing agent to stand up for you. One that knows the local customs and has relationships with local agents. Nobody is going to push our sellers around. An inexperienced agent with less confidence might buckle when the other agent is demanding answers on their time frame instead of yours or demanding to know how high they must go to win. They know this is unethical and yet we saw it happen many times this past weekend.

Rest assured, when you list with the Ellis Team at Keller Williams Realty, you are in good hands. We are not saying all agents operate this way, but a few hungry agents desperate to get a deal did this past weekend.

Please call Brett or Sande Ellis 239-310-6500 or visit www.SWFLhomevalues.com for an instant home value of your home.

Good luck and Happy Selling!


Market Update

New Listing-Open House Sunday 11-2