Statistically we see the housing market improving locally in SW Florida. Pending sales increased in season and local inventory decreased. We’ve been telling buyers their maximum leverage with sellers may be right now.
Interest Rates
All signs point to lower mortgage rates next year. As rates and inventory begin to decline, buyers’ leverage with sellers begins to dwindle as well. The winning strategy for buyers right now is to lock in low prices and negotiating leverage while you can, and refinance later when rates do decline. In this way, you can lock in low prices and concessions while waiting for the interest rate market to improve. If buyers wait to purchase, they may get a lower rate, but they’ll lose out on seller concessions and lower prices.
Time the Market
You can’t time the market, because nobody knows the date of the absolute bottom. What you can do is lock in a lower price for the home, at an affordable rate that works, and wait. Once rates start dropping, inventory supply will begin to get swallowed up. Already we’ve seen inventory supply decline. On March 18th we had 9,367 single family homes on the market in Lee County. Today we have 8,899. That is a 5% drop in inventory in less than 2 months. Rates have bounced around and largely stayed the same in these two months. Imagine what will happen when rates begin declining.
Shadow Sellers
What we don’t know is how many shadow sellers there might be. Decades ago, we called shadow inventory banks were holding on non-performing assets. Today, I’m referring to sellers who wanted to sell but pulled their home off the market and stayed or rented it out until prices rose again. We suspect there are many shadow sellers, but they will only enter the market when prices rise. They do not wish to sell at today’s prices, and buyers do not want to pay what those sellers were asking.
Housing Market Improving Locally
Today, buyers are in the driver’s seat. Next year they may not be. It’s possible we’ll have a driverless market for a year or two, with prices generally trending upward when inventory declines. We only see a driver’s seat market when the market is out of balance. Both buyers and sellers know what an out of balance market looks like. It’s fun to be a buyer in a buyer’s market, and it’s fun to be a seller in a seller’s market. The question I have is, why don’t all buyers buy in a buyers’ market? And why don’t all sellers sell in a seller’s market? You see, both groups have some that miss the market, usually out of greed or fear.
Some sellers believe the market will go up indefinitely. Some buyers fear today is not a good time to buy, because there are so many homes on the market. When the numbers begin to shift, both groups miss out because they don’t study the data. In fact, many Realtors miss it too. Realtors are guilty of judging the market based upon how their personal sales are going, rather than analyzing the market in depth weekly. If I sold 4 homes last week, as a Realtor I’m feeling like the market is great. Conversely, if I haven’t sold anything in 3 weeks, maybe I think the market is bad. What the Realtor is doing or not doing is irrelevant. It’s what the market is doing that counts.
If you’d like to see all the homes on the market, check out www.LeeCountyOnline.com Zillow is no longer showing all the homes on the market, and they are banning certain listings. Our website will show all homes in the MLS, so you can see them all. Or call a buyer specialist today at 239-489-4042 and find out if there is a home out there that works for you.
Sellers, you can call us at 239-310-6500 or visit www.SWFLhomevalues.com for your home’s instant value. Let us show you how to get your home sold today!