Today we would like to introduce the inventory sales gap metric for Lee County Single family homes. This metric measures the difference between the available single family home inventory versus the pending sales.
Inventory Sales Gap Metric
It is entirely possible to have rising inventory and rising sales. Imagine a low inventory market where virtually all the homes that enter the market go pending. In this case, the inventory sales gap metric is very low. As more homes come on the market, more go pending because demand from buyers is high. We saw this happen in 2022 and some weeks in 2023.
When pending sales exceed new listings entering the market along with homes coming back on the market, the gap lessens. This new graph shows in a different way than our supply-demand graph what the gap looks like. Both of our graphs help identify in an instant the health of the market.
As you can see from the graph, the inventory sales gap metric is widening. This means that the gap between listings and pending sales is widening. Currently, single family home inventory is rising and pending sales are flat. The good news is that we are seeing a slight uptick in new pending sales except for last week, which dropped by 1 home.
Ellis Team Current Market Index
The current market index is the third indicator our team uses, which accurately predicts the forward direction of prices. The current market index is still rising, which is not a good indicator for future prices. The index is the highest it has been all year. We’re going to be keeping an eye on new listings, new pending sales, and closings for the next 6 weeks. It will be fascinating to see how many new sellers decide to enter the market and how buyers respond.
Buyers seem to be responding. Showing activity is picking up and the phones are ringing. Many experts are predicting interest rates may not fall much in 2025 and could stay in the 6-7% range, which is average over time. Once buyers’ expectations for rates to decline go away it could spur motivation to buy sooner. It is possible the index could reverse course if buyers turn on in season.
The real question becomes what happens in January? Are there more shadow sellers waiting to place their property on the market? How does that number compare to the buyers looking to purchase this season. The forward direction of the real estate market feels like a college football playoff game. The winner will be decided in the trenches. Whichever side gains the most ground will determine the future of real estate prices in the next few months.
Selling?
If you’re thinking of selling, you need a team with marketing and experience. Many of our properties are receiving offers. Ellis Team listings receive more exposure than average listings, and our experience is second to none. If you’re thinking of selling, call Brett or Sande Ellis 239-310-6500 or visit www.SWFLhomevalues.com for an instant free online home value. Of course, Sande or Brett will be glad to verify if the estimate looks correct.
Good luck, and Happy Home Selling!
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Open House Sunday 12-3 PM
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