Average home prices fell 16.4% from May Peak. Last year home prices fell 10.5% in a similar period April through July. Essentially average home prices fell 5.9% more this year than last year around this time.

Home Prices Fell 16.4% From May

I read a lot of headlines that talk about how home sales have fallen but prices are still going up.  I would argue that home prices are not going up and whoever wrote the headline doesn’t understand our market.

It is true that median home prices are up 16.7% over last year and average home prices are up 17.4%. That doesn’t tell the whole story.  Those are year over year numbers, and they are declining each month because homes are not going up currently. We saw over $100,000 median price gain from September 2021 to April 2022. We saw $188,000 gain in average price from September 2021 to May 2022.  Since April/May it’s been downhill.  We are still up year over year because most of the gains happened from September on.

The real numbers will begin to show in October once official September numbers are released.  From this coming September to April, we will get an excellent idea of how the market is doing. We can already see home prices are down slightly, but to calculate how much of that is from seasonality is hard to do.

What seems absurd is the fact some people believe home prices are still appreciating. Listing inventory has tripled since February, pending sales are down, and closed sales are down. This is not a sign of an appreciating market.  Home buyers know it, and home sellers know it too.  I appreciate the media putting a good spin on the market, but quite frankly we don’t need a good spin.

The market is what it is, and always will be. You cannot spin the market into something it is not. When inventory is rising it means supply is outpacing demand. When inventory is falling it means that buyers are scooping up properties faster than they come on the market.

Simple Law

We have an excellent market, if you price your home fairly and market it aggressively.  This simple law works in all markets, up, down, or sideways. Hire the best Realtor you can find, market the property for full exposure to the largest number of buyers, and price it fairly. I’ve seen sellers miss the best seller’s market we’ve ever seen, and I’ve seen buyers miss out on the best buyer’s market we’ve ever seen.

Buyers and sellers typically miss the market out of greed. The truth is, over just about any 10-year period real estate is a good investment. Don’t get too greedy and you will never miss the market. Sure, real estate can go down in the short term. In the long term, real estate has done well, and even better than the stock market.

Don’t believe everything you read or hear. Consult a local market expert. While we are experts in this market, we would never purport to be an expert in another market. Listening to someone from another state about how to negotiate or price a home locally doesn’t make sense.

Always go deeper than the headline. Sometimes the headline doesn’t match the content of the story. Ask yourself if the data makes sense and seek out numerous opinions if you are unsure. When you hire the best, you tend to get much better results. This is true in any profession.

Always Call the Ellis Team

If you are thinking about selling your SW Florida property, give the Ellis Team a call. We have the knowledge, experience, and marketing muscle to expose your home to the largest audience. 239-310-6500 Find out if your home is going up or down in value online for free!

Good luck and Happy Selling!

Both condo and single-family housing inventory stalls briefly before reaching new highs this past week.  We noticed.  We noticed the last few weeks pending sales increased as interest rates were declining.

Housing Inventory Stalls Briefly Before Reaching New Highs

Since we last posted about rates going under 5%, they have since gone back up to around 5.25% Sure enough, pending sales dropped a little and inventory increased again.  Is this a direct correlation to interest rates? We cannot say for sure, but it is interesting.

We do know that interest rates play a part in affordability. Affordability affects not only what a buyer can pay for a home, but also their emotional outlook on finances in general. We did see some contracts from families trying to get into a certain school zone and that could have played a part as well.

The general consensus is mortgage rates will rise in the short term, although the long-term effect is less clear. Buyers would be better off purchasing sooner than later if possible. Even if you don’t like today’s rate, you might like tomorrows worse. We have a saying “You marry the house and date the rate.”

Marry the House and Date the Rate

Find the home that matches your needs, and you can afford today. Later on, if and when rates come down you can refinance to a lower rate.

Listings that are priced correctly and marketed well are seeing offers. Gone are the days where we see 50 offers on every property. We still have a good market with buyers motivated to buy. Buyers today cannot afford as much as they could 6 months ago. The good news for buyers is the massive price increases have stopped. We are not seeing rapid rise in prices. In fact, home prices have leveled off or declined slightly. It is hard to calculate because this time of year usually brings a slight dip due to seasonality.

The US economy is holding up well. Bear in mind, there are still trillions of dollars floating around out there, so a few interest rate hikes wasn’t going to kill the economy.  Our government just signed a deal for even more money flowing into the economy, so when the Fed pulls back it’s treasury security buybacks it may not hurt as much.

Experience Matters

I just saw a stat from the National Association of Realtors that said 91% of Realtors have not sold a home when interest rates were over 4% and days on market is over 45 days. So many agents in the business today just joined in the last few years and have no experience working in a normal market. It’s no surprise that so many agents are leaving the business.  Last year you couldn’t write offers fast enough.

Today it’s back to knowledge, experience, and marketing muscle. I predict thousands of new agents will get licensed because they don’t know any better. They don’t realize how many agents are leaving because real estate is hard. This business always has room for dedicated people who are willing to work hard and learn. Most agents get into the business for the flexibility, which means the ability to take off.

When you are interviewing agents to buy or sell, make sure they are dedicated to staying in this business, and have the experience working through market shifts. If not, you could end up paying for their inexperience. Their learning becomes your experience.

There is an old saying “What happens when the guy with experience meets the guy with money? The answer is the guy with experience ends up with the money and the guy with the money ends up with the experience.”

The commission you pay is for your agent’s years of experience. Saving money with an inexperienced agent could leave you with the experience and out much more money than what you hoped to save.

Always call the Ellis Team at Keller Williams Realty 239-489-4042. Visit www.LeeCountyOnline.com to search the MLS and www.SWFLhomevalues.com to get your home’s current value.

Good luck and happy selling!