I’ve been reading that nationally homes sales are down because of declining inventory. Locally, SWFL declining home sales have not been caused by declining inventory. In fact, local inventory has almost quadrupled in the last 18 months.
On February 15, 2022 I calculated 1,071 single family homes on the market in Lee County. Today, that number stands at 4,178. Low inventory cannot be the reason homes are not selling. Currently there is a 4.2 months’ supply of inventory on the market compared to 2.5 months’ last year.
SWFL Declining Home Sales
Hurricane Ian had nothing to do with the numbers. We were seeing declining pending sales, closed sales, and pricing before the hurricane.
Often, I go on listing appointments and the sellers ask me how much prices are going up. Most sellers are shocked when they see the numbers and realize home prices are not appreciating. They read national headlines about low inventory keeping home prices steady and assume that is happening here. All real estate is local.
While many parts of the country probably have low inventory levels, SW Florida does not. Our inventory levels are increasing, and we track them by the week. When you track listings, pending sales, closed sales, price reductions weekly you begin to see trends before others do.
These Stats are Not New
If you read this article or our Blog you’ve known for quite awhile what was really happening. When supply outpaces demand, it is hard for home prices to rise. In July, median home prices fell .7% versus last year. That is only part of the story. Median home prices have fallen 5 straight months versus last year. Median home prices are also down 2 consecutive months currently, and down 3 out of the 6 in month over month comparisons this year.
While inventory is rising, home sales are going down. This July marked the lowest point in 6 years for home closings. Pending inventory is down 4.2% over last year, so we’re not too optimistic August closings will be any better when they are released next month.
Through it all, The Ellis Team feels good about the market in general. We’ve been through shifting markets before. What hurts sellers more than anything is believing the market is what it was. The market rarely stays the same, and when it shifts, it pays to be ahead of the curve. Sellers who hold onto yesterday will be stuck holding a property and will eventually sell for less-than-ideal terms. Sellers that acknowledge facts and react invariably come out ahead of those that do not.
Market is Good
The market is good for those that market their property correctly and price it correctly. This is nothing new. Hiring an experienced agent matters more in a shifting market than a sideways market. 85% of agents in the business today have never worked in a shifting market. They are learning fast, or getting out of the business.
I talked to several agents that quit this past month. That is a shame, because a 4.2 months supply of homes is not bad at all. A balanced market is about 5.5 months. 4.2 months seems bad compared to what we had, and it requires a different skill set for agents. A shifting market separates that salesperson from the order takers. Order takers are leaving the business, and salespeople are proving their worth.
Hire a Salesperson
Don’t be afraid to hire a good salesperson. You need that right now. Otherwise, you’ll be stuck holding a property you no longer need or accepting a price you’re not happy with simply because you hired an order taker. They took your order. You told them what you wanted, and they took it. It doesn’t mean they will sell it.
For the best salespeople around, Always Call the Ellis Team at Keller Williams Realty 239-310-6500 Brett and Sande Ellis