May home prices increased 1.3% over last year. Isn’t it nice to read that home prices increased for a change versus declining?
For regular readers, this change shouldn’t be a surprise. For months we’ve been telling readers about changes we are seeing in the Southwest Florida real estate market. These changes should lead to a balanced market and eventual price increases if conditions continue.
Market Indexes
The indicators that have been predicting the market balance are the Ellis Team Current Market Index and the Market Spread Index. The latest reading of the Current Market Index came in at 3.54 this week. The Southwest Florida real estate market lost another 51 units this week as pending sales remain strong. It’s no wonder closed home sales were up 2.5% over last year. We are still looking at the third best year on record for single family home sales, and most agents don’t realize it.
The Ellis Team Market Spread Index was at 4,892 last week and we expect it to shrink further to around 4,865 when new numbers come out this week. As we have been reporting, if that index gets down to around 4,800, we should see pricing balance out. When the CMI gets close to 3.0 and the MSI gets around 4,800, we could see prices rise. We are not far off those numbers, and that’s why we’re not surprised prices rose over last year.
May Home Prices Increased
One month does not make a trend, however it is a start. Next month we might see another gain, or we could slip backwards. Much of what happens from here on out is a function of economic conditions. Will we maintain positive momentum? Gas prices are coming down, so what will that do for consumer confidence, spending money, and inflation in upcoming months?
I saw a report that showed people moving from California to Florida are speeding up. Many of these buyers are moving from Silicon Valley to Miami and Fort Lauderdale, but some could move to the west coast. As the east coast becomes unaffordable, we could continue to see buyers come over from the east coast of Florida. Housing is all about affordability, and we could sure use some good news in the interest rate, insurance, and property taxes departments.
Interest Rates
Predicting interest rates is difficult. Essentially, we need to wait and see when inflation comes down. In the meantime, rates could go up or down. The good news is the bond market has been reacting favorably to the Iran situation. Property taxes may decline next year for some if the property tax initiative passes, and insurance is always a crap shoot.
Precision Pricing
The Ellis Team are experts at getting Top Dollar for our sellers. We use these indexes to advise our clients on how to get the most for their home. Since these indexes are forward looking, meaning they accurately predict forward direction of the market, we are able to advise our clients with more confidence than simply looking at months old comparable sales.
With our aggressive marketing, professional sales agents, and advanced market data we can sell homes faster and for more money by keeping our listings algorithm ready. The last thing you want is for the algorithm to hide your home due to unoptimized data or inaccurate pricing based on the models.
Always Call Brett Ellis or Sande Ellis at 239-489-4042 to find out how to get your home optimized for the algorithm and priced correctly. Remember, a home that isn’t optimized isn’t seen by as many buyers, and that can cost you in your sales prices.
Good luck, and Happy Selling!
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