We are starting to see some SWFL real estate buying signals flashing in the market right now. Everybody always asks, “is now the time to buy real estate?”
The correct answer is not to try to time the real estate market. Don’t wait to buy real estate, buy real estate and wait. This article is not going to focus on that. This article is for all the people who want to time the market.
Several indicators are flashing green right now. This does not mean prices will begin rising right away. In fact, prices could continue to go down some as these are leading indicators, meaning it takes time to take effect, and conditions could change in the meantime while we wait.
Inventory Levels
For the first time in a while, single family inventory in Lee County declined this past week. Pending sales have picked up nicely. They are not to the level of last year but welcomed just the same.
CMI Index
The Ellis Team CMI index has been falling since its peak in January. This is a good sign for future prices in SW Florida, albeit down the road. If this continues falling in April and May sellers will breathe a sigh of relief.
Interest Rates
Interest rates have been falling since January 16th when they peaked at 7.04%. This week they were down to 6.67% according to the St Louis Fed. As rates drop, housing becomes more affordable to more buyers.
Insurance Rates Drop
4th qtr. insurance rates fell by .7% for single family homes and 1.7% for condos. This is the first drop in over 2 years. Granted, rates rose much more than that, but it is a sign that recent insurance reforms enacted are helping with insurance costs. Everyone said it would take time but watch for lower premiums in the future.
The Gap
The gap is the difference between the number of homes on the market and pending sales. The gap peaked on Feb 11th and has been declining since. This is another welcome sign for homeowners.
Tariffs
Tariffs on lumber and steel may help home sellers. Resales have been competing with new construction for years, and many times losing. As the cost of lumber, steel, and other commodities increases it raises the cost of new construction. This may help resales compete with new construction prices and stem the loss of buyers who have been buying new construction.
The SW Florida real estate market was flashing red for the past 2 years, but now some SWFL real estate buying signals are flashing green. We do not believe prices are headed higher anytime soon. We do believe if you are trying to time the market, there are some buying signals that look favorable.
Have We Hit Bottom?
We will never know when the market has hit bottom until some time after and it is heading up. We see signs of increased buyer affordability. It is better to buy at 1-2% before the market has hit bottom than 1-2 % after, because of the leverage buyers have today versus when everybody knows, including the sellers, that the jig is up. Today, buyers have maximum leverage and might one day regret not buying.
To search for your home and help analyze the market, check out www.LeeCountyOnline.com. Not only will you see all the listings, but you’ll also appreciate the neighborhood market reports.
Sellers love the free and instant home value tool at www.SWFLhomevalues.com Still others prefer to talk to us. You can reach us at 239-310-6500 and we can talk about your situation and the market. See last week’s article “Top 10 Reasons Sellers Become Frustrtated With Their Listing Agent”
Good luck, and Happy Selling!