Let’s analyze home prices nine months after Hurricane Ian. We did this post Hurricane Charley and Hurricane Irma as well.

Official median home prices last September in Lee County were $414,495. Average home prices were $534,035. Official numbers are not out yet for June, so we went into MLS and extracted data that should be close to actual numbers when they are released.

Home Prices Higher After Ian

 Unofficial June 2023 Lee County median price was $449,000. That is an 8.32% gain from September of last year. The average price in Lee County for a single-family home in June was $589,991. That is a 10.48% gain over September last year.

We know that home prices were coming down prior to the hurricane. Rising interest rates surely played a part in that decline. Much like hurricanes Charley and Irma, it doesn’t appear that the hurricane had much influence on home prices. Perhaps the greatest influence was which home sellers decided to sell. While demand has fallen with rising interest rates and insurance costs, it hasn’t gone away. Demand is still there. Sellers must price correctly for sure.

Because there is still demand, we may see lower prices if more lower end homes enter the market, and higher prices if more higher end homes hit the market. Obviously when supply outstrips demand it can lower prices, but through last year inventory was low, and the hurricane didn’t help that.

Rising Inventory

 Today we are seeing much more inventory.  Single family home inventory has almost quadrupled since February of 2022. If inventory keeps rising, we will be entering a balanced market. If you talk to most real estate agents, they will tell you this market feels like a balanced market.

We don’t have 50 offers for every property, but homes don’t sit forever either, if they are priced and marketed correctly.

We are seeing agents leaving the business. At last count 60,000+ agents nationwide have left, and we are expecting hundreds of thousands more. This happens with every shift in the market. So many agents come into the business and work in one part of the market. There are three different markets and how you consult and transact are completely different in each.

Three Markets

 The three markets are a buyer’s market, seller’s market, and a balanced market. Once the market makes a move, it’s very easy to slide through all three, or drift back and forth depending on market conditions. We’ve just gone from a severe seller’s market to a balanced market.  Interest rates are on the rise again. Mortgage rates hit their high for the year this past week and may go higher.

The economy is expected to slow down as rising debt is weighing on consumers. Student loan payments begin in October which will take spending money out of the economy.

For Florida we will be watching to see how many people continue moving to our state. As taxes rise in other states and people continue to move out of cities, where will they go? To date, many have chosen Florida which helped push our prices up. With rising prices, interest rates, and insurance costs it remains to be seen how many and how fast they will continue to relocate here.

It is possible a slowing economy might force people to relocate when they lose jobs up north. Others may simply decide to retire. Whatever happens, you know that we will be studying the numbers. Ellis Team clients always know the trends before other home buyers and sellers because we track the market so closely. We have years of data and analytics.

Search Like a Pro

 To search the MLS like a real estate pro, check out www.LeeCountyOnline.com It has features and data other sites do not have. Of course, Sande and Brett Ellis are here to answer your questions as well. 239-489-4042. Brett and Sande have worked in all three markets multiple times. There is no substitute for experience, hard work, reputation, data, and analytics. That’s what you get when you call the Ellis Team at Keller Williams Realty.

Advanced Negotiating Techniques

Last week we shot a video  utilizing advanced home negotiating techniques which you can find on our YouTube Channel  We also posted the video on our Facebook page at www.facebook.com/ellisteam.

We thought we’d share with you these advanced home negotiating techniques. The best part of the first technique is that it benefits both the buyer and the seller if used properly.

In a shifting market with rising inventory most sellers realize they must be competitive. Reducing the price is one way to get in the game, but what if there is another?

Simultaneously, the reason we have rising inventory is because buyers are struggling to pay higher prices and higher rates at the same time.  Today we’d like to share a concept that will help both.

Permanent Rate Change

Let’s say we have a $500,000 home. Also let’s say we have a buyer putting 20% down and financing $400,000.  The buyer could offer $490,000 to help make their payment a little better.  We ran a scenario last week, and by offering $10,000 less the buyer would save about $72/mo.  Not bad if the seller is willing to participate.  But what if the buyer still does not qualify?  This particular buyer might have to offer $450,000 to qualify. It’s a shame because this buyer loves the home, but the seller won’t come down to $450,000.

Now, let’s take the exact same home and the exact same buyer and look at it a different way. What if the buyer offered the list price of$500,000 but asked the seller to pay closing costs up to $10,000? With that money we buy the rate down from 7.5% with $2,000 in points to 6.25% with around $10,000 in points. By buying the rate down the new payment lowers by $333.99. The buyer qualifies for this payment when they did not qualify for the previous payment.

It is the same $10,000 just used a different way. The results can be enormous. You can watch the entire video online that explains it. Our example only shows the principal and interest portion. Obviously there will be taxes and insurance which varies by property.

Additionally, these numbers change by credit score, amount down, etc. Every buyer and every scenario is different. What stays the same is the concept. Once you understand the concept, we can run scenarios that best help your situation.

2/1 Buydown Option

We looked at a 2/1 buydown, but the day we ran it the permanent buydown was a better deal. A 2/1 buydown lowers the rate by about 2 percent the first year and 1 percent the second year before setting in on the permanent rates the final 28 years.  The buydown is temporary.

There are many more types of loan products we have access to. Keep in mind, we are not lenders. We are real estate agents that understand the process because we’ve worked through several interest rate cycles and have experience. Many new agents have never worked in these conditions, so they don’t have that knowledge to put and keep deals together. It’s a shame, because many times there is a willing buyer and seller, and they just don’t know how to keep it together.

Putting it All Together

The key is working with people with experience and a great team. We work with lenders who have decades of experience. Sometimes all the elements of a great deal are there, and people just need help structuring it to make it work. The days of 50 buyers bidding on every property and paying cash well in excess of the asking price are over. Financed deals are back in play, and this is where experience matters most.

Always call the Ellis Team at Keller Williams Realty 239-489-4042 or visit www.LeeCountyOnline.com to search for your next home. We’ll show you hot to use this and other adnaced home negotiating techniques to work for you.

Advanced Home Negotiating Techniques