Monthly Archives: June 2022

Two Types of Sellers in Today’s Real Estate Market

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Currently we have two types of sellers in today’s real estate market. We will go in depth on both and explain how each outlook can impact both the buyers’ and sellers’ future.

Two types of sellers in today's real estate market

Fearful of Market

These buyers respect the market and analyze facts. They tend to be motivated to get top dollar and do not want to miss this market. They realize the best may be behind us and they get that. Sellers in this category don’t want to be left holding the bag if the market drops further. They have watched inventory more than double since February and on its way to tripling by July at the current pace. These sellers know it is more fun to sell when there are fewer listings to compete with and they do not like that more competition is coming.

Interest rates have risen which has priced many buyers out of their current price range. Suddenly the homes in their new lower price range do not look as attractive as what they looked at before and they lose motivation. Many buyers have checked out and given up on the market at these prices. If they were on the fence with pricing, as many were, rising rates through them over the top.

Want the Price From 3 Months Ago

The second type of buyer wants the prices from 3 months ago, and some say throw in another $30,000 for good measure because those prices back then weren’t quite enough. These sellers lack motivation and want what they want without regard to market conditions. A few of these sellers still might get their price if their home is unique or offers something of value not readily available. Certain waterfront homes, or newer or updated homes might fetch top dollar plus simply because we still have a decent market, and no like kind inventory is competing with them.  As time goes on this will become more difficult once the market catches on and headlines change.

Headlines still compare year over year pricing, but we believe that will change in the coming months. We study both the year over year and the month over month statistics. It is possible we will see the month over month sales start to level off with the rising rates, and later it will show up in the year over year sales.

Because prices went up so much year over year late in 2021 and early 2022, we may not see the trend until many months from now, but the trend can still be there. Therefore, we will be studying the month over month numbers to get a quick blink on what the market is doing in real-time.

We already see inventory rising, less offers per property, and less cash offers. The financial markets are in turmoil, and it has worked its way into the real estate market. Consumers are not confident in the economy, and it is impacting buying decisions.

Thinking of Selling?

If you are thinking of selling, ask yourself which type of seller are you. Do you want to sell sooner before other sellers enter the market, or do you believe the market is still on fire like back in March? Marketing becomes more important in a changing market. When we meet, we can discuss the latest Ellis Team Current Market Index and what that means going forward. Remember, we developed this index that accurately predicts the forward direction of the market before it shows up in the numbers.

We are happy to share this with each of our clients. Call Sande or Brett Ellis 239-310-6500 and we can discuss your options or visit www.SWFLhomevalues.com to get an instant value of your property with a confidence score. The higher the confidence score, the more accurate the valuation. If your property receives 85 or better, the system is confident in your number. You can watch your value change each month.

Good luck and Happy Home Selling! And please, vote for us as Best Real Estate Team in the Fort Myers and Cape Coral News Press polls.

Ellis Team Weekend Open Houses

Open House Sunday 12-3 PM

3951 Spotted Eagle Way

3951 Spotted Eagle Way Fort Myers Florida
Open House Sunday 12-3 PM

Open House Sunday 12-3 PM

2007 SW 30th Ter

2007 SW 30th Ter Cape Coral Florida
Open House Sunday 12-3 PM

 

Two Types of Sellers

Inflation Rocks Financial Markets This Week Forcing Fed’s Hand

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Staggering inflation rocks financial markets this past week essentially forcing the Fed’s hand going forward.  This caused interest rates to skyrocket to over 6.625% for well qualified buyers, up from about 5.375% the week prior.

Inflation Rocks Financial Markets This Week

We are writing this article before the Fed makes its decision on rates. Some believe the Fed will raise rates 75 basis points while other believe 100 is in order. Essentially the overall market has priced in the anticipated Fed decision.

Of course, the stock market reacted negatively because rising rates is not good for earnings, which will impact stock prices.  The yield curve on the 10-year note and 2-year note inverted again this week briefly, which signifies what we saw earlier in the year. The financial markets believe we are headed for recession. The Fed will be forced to put us into a recession to curb demand and get inflation under control.

Experts disagree on how high rates need to go to curb demand. As oil continues to rise it adds inflationary pressure to everything, so getting oil prices under control is crucial. Failing that, the Fed’s job will be much tougher. As we write this article oil prices are at $123.50/barrel. Many believe it will go to $150, and if it does, the Fed may need to raise rates significantly more throughout the year.

None of this is good for the financial markets, and it’s not good for real estate either, in the short run. In the long run we know real estate holds up as a hedge against inflation. Home prices long term outpace inflation, and we have written an article on that. See our post from May 26th  Housing Best Hedge Against Inflation in Uncertain Times which covers that.

The game plan for buyers right now is get in before interest rates rise further, as rising rates will cost you much more than a possible price decrease from sellers in the short term. See our video from April 15th  Better to Buy Now or Wait? on our YouTube channel https://www.youtube.com/Topagent which shows you exactly how much it costs by waiting in a rising rate environment.

We have been predicting this day for the past several months and advising our clients. There are no surprises for the informed. We always say, hiring the right Realtor makes all the difference, especially in a shifting market. What you do next will determine your financial future.

If you are thinking of selling, knowing the latest statistics will help. You must price your home for the market we are in and for the market we are going into. Some sellers are holding on to the market from 3 months ago, and those strategies may not work. Gone are the days of throwing up a listing and expecting 20 multiple cash offers. You may need to look at financed offers and appraisals.

If you are a buyer, you may want to get ahead of this. More listings are coming on the market to choose from, and waiting can seriously cost you. If you see a home that meets your needs and is priced correctly, you may want to make your move. Waiting for a seller to reduce their price 5% might cost you 15%.  This is what we just witnessed this past week. Waiting absolutely cost financed buyers.

Our team is not here to sell you anything. We present the facts and let you make the decisions. We do so in a factual and logical way so you can make the best decisions for your family. Most people appreciate the truth, and that’s just what you’ll get when you work with our team. If you’re thinking of selling, talk to Brett or Sande Ellis 239-310-6500 or visit www.SWFLhomevalues.com

If you’d like to buy before rates go up again, visit www.LeeCountyOnline.com or call us at 239-489-4042. We’re here to help. Remember, when the markets get rocked, stay calm and work with a professional.

Market Turmoil

Housing Inventory Trend Line Headed Upward

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Lee County housing inventory trend line is on the rise. Local inventory has grown above the trend line for 6 straight weeks. Housing inventory has risen for 17 straight weeks.

Housing Inventory Trend Line Headed Upward
Housing inventory trend line headed upward

This tells us the top of the frenzy probably occurred back in February. Agents across the county are noticing less offers on their listings, and the upward pricing pressure has abated.  We will still see higher prices year over year as the numbers come in, but we may not see substantial price increase month over month going forward.

The housing inventory trend line is a leading indicator for the local real estate market. Inventory levels tells us about the relationship between supply and demand. With inventory rising, supply is outpacing demand at these prices. Therefore, we are seeing so many price reductions in our market.

Sellers Pay Attention

Home sellers may have missed the peak of the market, but it is still a great time to sell. Housing inventory currently stands at 1.43 months supply which is still fantastic. We just do not have the upward pricing pressure fueling large price gains like we used to.

The best indicator we have is the Ellis Team Current Market Index. While we are no longer publishing this live data to the public, we can tell you that it almost doubled since April 26th, which was just 6 short weeks ago. Ellis Team clients get access to this data which is crucial in making proper pricing decisions in a changing market.

Focus on Marketing

Today sellers are hiring agents with a focus on marketing. The past two years we noticed sellers were interviewing agents and sometimes selecting the lowest cost agent. Perhaps they felt any agent could sell a home in the heated market, and that was true. Not all could get Top Dollar, but they could sell the home for full price.  There is a big difference in the two.

Today marketing matters again. Sellers are not looking for the cheapest way to sell but rather the agent who can fully market the home and get Top Dollar. When the buyers fall off, marketing becomes more important to sellers. As inventory grows sellers know they must make their home stand out. It used to be that buyers were in competition with other buyers for the best homes. Now buyers have more choices, and we are heading towards sellers being in competition with other sellers for the best buyers.

Home prices have exploded in recent years and sellers do not want to jeopardize cashing in at these prices by hiring an agent that simply puts their home in MLS. When inventory grows, buyers shop online, and homes begin to look alike. Each home has its unique features, and you’ve got to create ways for that home to be seen by buyers who want those features.

Target Marketing

This is why we target market. Placing a home on Zillow or Realtor.com is not going to sell the home when inventory grows. We take our listings and place them in interested buyer’s inbox, social feed, and search online. Our marketing contains various target sets depending on which listing we are advertising.

We can reach buyers in out-of-town markets who want to buy here. Why advertise to only local buyers when you can target out of state buyers too?

This is the difference between selling a home to just one buyer or reaching many buyers from all over. Do you think you would get more money if you had one buyer interested or dozens of buyers interested?

If you are thinking of selling and want Top Dollar in today’s market, we should talk. Call Sande or Brett Ellis 239-310-6500 We’ll be happy to discuss your situation and show you how our marketing can give you an advantage. Real Estate agents aren’t cheap, so why not hire the best? A great agent can actually put more money in your pocket at closing!

Good luck, and Happy Selling!

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