Cape Coral Archives - Page 17 of 62 - Fort Myers Real Estate and Homes For Sale

This season we have seen an increase of back on market homes increasing due to changing buyer tactics. We will explain why this is happening, and what the Ellis Team is doing to combat these tactics. The agent you hire to represent you matters!

Buyers are desperate and are doing anything they can to score a home purchase. Buyers are frustrated because the best homes are typically in multiple offer situations and the competition is fierce. Many buyers are not here locally and are trying to purchase from afar. They do not want to keep flying here every time a home goes up for sale. By the time they get here the home is sold.

Buyers are bidding up properties and using the As-Is contract to tie up the property. This buys them time to fly here and see if they really like it. Additionally, if another home comes on the market, they also like, they can dump the current contract and offer on the new listing. Some buyers are even offering on multiple homes and using the As-Is contract to bail on all but the best deal.

Some buyers are having inspections and renegotiating the deal afterwards. The seller thought they were signing an As-Is contract and does not understand why the buyer is asking for repairs or a change in price.

Back on market Homes Increasing

Sellers thought they were in the driver’s seat and now they are being forced to sell their home several times. As-Is does not mean what the seller thought it meant. This is why we have gone back to the Standard contract which was prevalent before the banks instituted the As-Is back in the foreclosure days. The standard contract gives the right for a buyer to have an inspection. They do not automatically have the right to cancel for any reason.

If valid inspection items arise, the contract is clear about what is a covered item and what is not. The seller will automatically bring back into working condition covered items up to a specified amount. Typically, these covered items are things the buyer asks for anyway in a As-Is contract. The standard contract eliminates a lot of non-covered fluff items the buyer typically tries to renegotiate price over.

When buyer and seller enter into a Standard contract, both are pretty much agreeing this is a one and done sale unless something major comes up. The Standard contract eliminates the buyer’s ability to cancel or renegotiate the price for any reason, and it puts their escrow deposit in jeopardy should they attempt to back out. This helps stop the practice of bidding on multiple homes at once and backing out of several deals.

When buyers back out of deals, it hurts other buyers as well. That property is off the market for awhile and not available for other buyers. If a buyer is in town for one week from out of state to purchase a home, it does not do them much good if next week 6 homes that match their criteria come back on the market. The out-of-town buyer never saw those homes because they were supposed to be taken.

Pick Best Option and Commit

Imagine being asked to the prom and your date cancels last minute. Not only are you devastated, but you were also not available for other dates that would have been more than happy to go to prom with you. You lost your shot simply because your prom date found a better option. Wouldn’t you rather go with the person who really wants to be with you?

The same is true in real estate. If you are going to take your home off the market, make sure it is for someone that values and really wants your home. Remember, the agent you hire to represent you matters! Always call the Ellis Team at Keller Williams Realty 239-310-6500 or visit www.Swflhomevalues.com for a free estimate of your home’s current value.

Good luck and Happy Selling!

In March we saw cash sales trending higher in the SW Florida real estate market. Cash sales represented 34.8% of all sales which was up from 27.8% last year. In multi-offer situations cash buyers have a leg up on financed buyers.

Cash Sales Trending Higher in Today’s Heated Real Estate Market

While cash sales have been rising since January, they are not alarmingly high. In fact, as a percentage of sales, cash sales were higher in 2017 and 2018. Cash sales are somewhat seasonal as you can see from the graph. They do tend to rise in season as buyers flush with money flock to SW Florida and begin their home search.

Many people believe if they just list their home on MLS, the cash buyer will find them. Typically, it does not work that way. While it is possible for the cash buyer to find the home that is not heavily marketed, how much will the cash buyer be willing to pay if they do not feel competition for the home? When a buyer sees a parade of home buyers marching through the home they want, it makes them up their game. They can use their cash as a weapon against other buyers.

When cash buyers have little competition, they use it as a weapon against home sellers. What has changed in this market is how the cash buyer sees themselves. In a buyers’ market, cash buyers dangle money using the scarcity concept. If the seller loses this buyer, it might be a while before they see another offer, and who knows if the buyer will obtain financing.

In a sellers’ market, the cash buyer is simply looking for an advantage over other buyers. They are not using the cash as a weapon against the seller. Cash is looked at as a good thing by sellers. In a buyers’ market, sometimes sellers see cash as a bad thing simply because cash buyers act differently in a buyers’ market.

Cash buyers fail to realize in a buyers’ market it is all cash to the seller. No matter if the money comes from buyer or the bank. Today, appraisals can lag, so a seller never knows if the buyer can perform when the appraisal misses the mark. For this reason, sellers are asking for a pre-approval letter and proof of funds showing the buyer can pay the difference in cash if the home does not appraise for purchase price.

Of course, you must insert language into the contract addressing appraisals and what will happen if the home does not appraise. The Ellis Team has been successful at pre-negotiating what will happen in this instance. Doing this upfront takes the uncertainty out of the sales process.

This assumes you have selected the correct offer to begin with. Picking the wrong buyer will blow up a deal before it even begins. Clever buyer agents write up deals just to win the bid. This does not mean it will actually close. This is one reason we are seeing so many homes come back on the market.

Most agents believe homes coming back on the market is a function of buyers offering on multiple homes and then backing out of all but the best deal. While some of this is happening, still more fail because the wrong buyer was selected as the winning bid.

An experienced agent can help you decide which offer is better. Of course, obtaining multiple offers requires substantial marketing. We are marketing into northern states where the buyers are coming from. Our roads have less congestion, and many have gone home. They are still looking to buy, but how will they know your home is waiting for them if it is not marketed heavily?

This is where we come in. Ellis Team marketing more than pays for itself. It gives sellers an unfair advantage over other sellers. We put more money in your pocket. If you are thinking of selling, we should talk!

Call Brett or Sande Ellis 239-310-6500 or visit www.SWFLHOMEVALUES.com for a free and instant estimate of your home’s value.

Good luck and Happy Selling!

It sounds like a broken record repeating itself for the past two years. Housing inventory levels fall again in April. We did see a glimmer of hope for homebuyers in the $400-$600k range and in the $600k-$1 million range as listing inventory increased. However, the market scooped it all up and sales increased which drove their months’ supply of inventory down with it.

Not only did overall inventory decline to a .78-month supply, but every single price range also saw drops in levels as well. This is a broad market inventory decline across the board. Many times, we will see segments of the market doing better than others. In this case, all price segments are seeing housing inventory levels fall.

Housing Shortage

Recent reports by Freddie Mac indicate the US is 3.8 million homes short of meeting the United States housing demand. This shortage has led to buying frenzies across the nation at a time when millennials are entering the market. Combine with the fact that people are relocating more as they learn to work remotely, and you have a recipe for increased demand and not enough supply.

Historically low rates have also fueled people to either stay in place and refinance or make the move. Now that rates have risen a bit from their lows, less people are refinancing. Because of this, we believe 2021-2022 will be the timeframe when more people decide to sell what they have and make a move.

It will be interesting to watch inventory levels. As more people sell so they can purchase, will this increase inventory? Because we have this shortage it may not make a big enough dent. Demand may still outstrip supply.

We have noticed an uptick in home sellers wondering if now might be the time to sell. They like that prices have risen, and they are beginning to weigh their options. Some sellers are questioning how much they love their home and if they should risk holding on to it longer. Prices have risen significantly the past several years, and this might be the point in time home sellers have been waiting for.

How Long Will it Last?

The dilemma is how long will this last? Nobody wants to leave money on the table, and yet, sellers do not want to wait too long and miss the top of the market. The reality is you will never know the top of the market until it has passed. By then, it is too late and headed down. When the market heads down, it can be a long, slow ride lasting several years. Buyers do not like buying when the market is headed down. Once word gets out, some buyers shut off out of fear and wait until the market bottoms. That process can take several years.

Our best advice is, if you love the home you are in and it suits your needs, you do not need to do anything. If your home no longer suits your needs, and you do not absolutely love it, now may be the time to explore.

For over a decade many SW Florida homeowners were trapped in a home they did not love, but because the market turned so drastically, they were trapped. We do not see any signs today’s market will be like 2005. What we are saying is it can be frustrating owning a home that does not suit your needs for too long.

Always Call the Ellis Team

Call Brett or Sande Ellis 239-310-6500 and we can discuss your options. We will talk about where you would go if you did sell, and what timeframe would work for you. Or, if you are just curious for now, you can go to www.SWFLhomevalues.com and get an instant and free home valuation on your home. It emails you a report in minutes and is a good starting place for a conversation.

Whatever your housing situation, Brett and Sande are here to answer your questions. We should talk!

Good luck and Happy House Selling!

Just when you thought you had seen everything, along comes another change in the real estate market. We are seeing SW Florida home builders changing sales tactics again, and it’s not good news for the buyer.

To mimic the success home sellers are having through their Realtor, several home builders have instituted a highest and best offer format on their homes. Basically, it works like this. The buyer makes a binding offer on a lot. There is typically a stated priced however the buyer can offer highest and best. The winning bidder chooses the home they want built and they go to contract.

Buyer Pays the Difference

If the home does not appraise, buyer agrees to pay the difference. Once you bid up the price, you’re buying it regardless of whether you pay cash or finance it. If the buyer is financing it, they will have already been pre-approved to bid on the property and shown financial ability to pay what they are biding.

Previously, home builders have been limiting sales contracts so they could keep up with price increases and maximize profit. Home sellers may have shown builders the way as builders want in on the fun as well. All of this puts additional pressure on buyers because they do not know what it’s going to take to win the bid.

I spoke with a homebuilder who used this in another city in Florida. The lot had a $25,000 stated lot premium and was offered out for highest and best. The winning bidder bid it up to $170,000 and won the bid. They then went to contract with the house on tip of that plus options.

The builders argue that it is not fair to sell to whoever shows up first. They are getting as many as 100 people per day through their model homes. That is 700 per week. If a builder releases 2 lots and calls for highest and best, they now have 700 from this week, and thousands from previous weeks who have seen the property. Builders love this because not only are they raising prices on the house as costs rise, but they are also maximizing value on the total package.

New Construction Prices Will Pull Resale Prices Higher

Rising new construction prices can help pull resale prices even higher when you have such limited supply and strong demand. It used to be when building prices got too high people would switch over to resale and vice versa. Now there is no switching. Buyers must jump on the first home that meets their needs and come with their best offer.

Buyers are not competing with the seller, or the builder. They are competing with other buyers. We have great tools on how to win bids when you are not holding all the cards. These tools help, but they are not an automatic win for buyers in every circumstance. You’ve got to play the cards you are dealt, and a great Realtor can help you play them as best as possible. If you are a buyer, call the Ellis Team at Keller Williams Realty 239-489-4042 or visit www.LeeCountyOnline.com

If you are a seller, you need an experienced Realtor. Buyer agents are trying all kinds of tricks and shenanigans trying to win deals. Some are legit, and some are not. An experienced agent can keep you from going down the wrong path with the wrong buyer. If something doesn’t seem right, you need an agent with experience to sort that out.

Getting Top Dollar For Your Home

With builders changing sales tactics, so too must home sellers. There are additional ways to maximize your sale price. Brett and Sande Ellis know how to do this as well. If you are looking for Top Dollar, call Brett or Sande Ellis 239-310-6500 or visit www.SWFLhomevalues.com to see what your home is worth.

Do you know what your home is worth? If you haven’t checked in the last week, then you really don’t know.

We have many happy home sellers that are glad they called the Ellis Team at Keller Williams Realty. Let’s talk and see if we can help you too!

Ellis Team Open House

Cape Coral Waterfront Pool Home Sat 12-3 PM

For the past year or more we have been telling readers now may be a good time to sell. The market statistics prove that, and yet not everyone is doing it, including Realtors. This year I took my own advice and decided to make a move.

It’s not that we were unhappy where we lived. It was a great neighborhood and a great house. Our needs changed, and this market provided an opportunity that was too good to pass up. If you love your home and your needs have not changed, you don’t need to sell just because there is an opportunity. But if you have been thinking about what a move would look like to better your situation, the opportunity is there.

Took My Own Advice

For us we had 4 children, and the last is graduating high school this year and moving on to college. My wife and I do not need a 5-bedroom 2 story home for just the two of us. We were torn because we loved the community so much.

We put in a contract at a new home community. That home is schedule to be built this year. Later we listed the home we lived in and it sold within 9 days. The buyers are thrilled with the home and we were able to jump into a rental that opened while ours is being built.

Not only did we get a good price for our existing home, but our future home has also already gone up $27,000 in price since we signed the contract, and they haven’t even broke ground yet. This market is a win/win market for buyers and sellers.

Sellers get to take advantage of Top Dollar. Buyers also win, because home prices are rising, and about a week after they move in the home is worth more than what they paid for it. In fact, many times it is worth more before they close.

Values Are Changing by the Week

Our home for example appraised for $20,000 more than what we sold it for. You might say how did you sell it for Top Dollar but below appraised value? After we signed the sales contract with new buyers several comparables closed which pulled the value higher. It is a fluid market and values are changing by the week.

Do you know what your home is worth in today’s market? If you have not had a thorough market evaluation and tested the market, then you really don’t know. In the absence of sales data, we have been forced to put homes on the market at prices higher than any recent sales. Then along comes several buyers we attracted through our marketing, and it sells for even higher than list price.

The market is setting new valuations right before our eyes, and the only way to get top dollar is to put the property on the market and market it. We may set a price higher than the last sale and the market may scoop it up anyway, and then some. They key is attracting multiple buyers.

Best Way to Determine Market Value

May times a seller has a tenant or family member that wants to buy their home. They get an appraisal to find out the value. But is that really the value? An appraiser is looking at yesterday’s value because all they can work with is what has happened in the past. They do not consider what is happening today, and what will happen next week when we place a home on the market.

If you own a home and want to explore your options, call Sande or Brett Ellis at 239-310-6500 Our marketing is different, and we can show you how to maximize the sale of your home. You’re going to need it where you’re going, so why not get it?

We can even help you with your next home. Or visit www.SWFLhomevalues.com to get an idea of what your home is worth. Our website will even email you your new price every month so you can keep track.

Good luck and Happy Home Selling! Always call the Ellis Team at Keller Williams Realty for Top Dollar!

According to william pitt sotheby’s SW Florida home appreciation rate intensified beginning in September of 2020. The official average single family home price in SW Florida was $391,168 and by February 2021 it rose to $486,406. That is a 24.35% gain in just 5 months. It was slightly higher in January.

The median home sales price was $295,000 in September and rose to $329,950. That is a 11.85% price gain in just 5 months. For the year, average home price gains were 32.3% while the median was up 22.2%. The SW Florida home appreciation rate is very high.

As you can see, the average was up 32.3% but 24.35% of that all happened since September. Median prices were up 22.2% in the past 12 months, with 11.85% of that being in the last 5 months.

We have been talking a lot about falling inventory levels, and at last check inventory has fallen yet again to the lowest level we have seen in decades. Demand is strong which is causing prices to rise. As prices rise, affordability shrinks. Back in early March we were reporting how home affordability was near an all-time high nationally. That story is available on our blog https://blog.topagent.com In fact, all our articles are available on the blog dating back years. The blog is a great way to keep up with how our market is doing over time.

Today home affordability is shrinking for two reasons. Prices have continued to climb, and interest rates have risen. Rates earlier this year were around 2.75%. Today they are about a half percentage point higher. Rising rates are like a hidden tax borrowers must pay. It raises the cost of buying a home, and you do not really get anything for it. When you purchase an upgrade for a home you at least get something for it. Not so with rising rates.

Will rising rates be the headwind that stops the real estate market in its tracks? We don’t think so, at least not in Florida. It does take some fuel from the fire though. Affordability caps a market, so it can only appreciate so far unless you have a secondary home market where wages don’t enter into the equation as much.

Florida is blessed in that all kinds of people want to live here. We have primary workers, remote workers, secondary homes, retirement homes, investment homes, etc. Demand is strong from all segments, and people are flocking to the area and escaping other areas.

We see demand remaining strong in Florida, but rising prices and rising rates do put pressure on home buyers. Many buyers will be forced to settle for a home they do not love, but happy to be in a location they prefer over where they came from. This may be a case where a buyer buys what they can afford now and rides the wave, propelling them to their dream home later.

In an instant gratification world people like to get what they want now. Historically people bought what they can afford and work their way up the ladder to what they liked later. We may be returning to that model.

Many people are stunned to find out what their home is worth today. If you have been contemplating a sale, you should call Brett or Sande Ellis 239-310-6500. For those of you that have not thought about selling, let me ask you a question?

At what price would you sell your home? What number would make you move? When you come up with that number, call Sande or Brett. Perhaps we already have a buyer in our database looking for a home like yours. We might be able to make that Make Me Move number work for you. Call us 239-310-6500.

Good luck and Happy Easter and Happy Passover!

Check out 3 New Hot Listings This Week!

16613 Panther Paw Ct

Ellis Team Listing in the Forest Country Club — New Listing in the Forest

9854 Wildginger Dr

South Pointe South New Listing by the Ellis Team — New Listing in South Pointe South

15820 Portofino Springs Blvd Unit 101

Villa Medici Townhome Full of Upgrades — New listing in Villa Medici full of upgrades by the Ellis Team at Keller Williams Realty

We are part of a Top real estate agent mastermind group from Lee and Collier county whereby several top agents come together to talk about current issues in the market. At last week’s meeting we talked a lot about inventory levels and how top agents are handling offers as well as a variety of other things.

Top Conclusions

Here are some conclusions that came out of that top agent mastermind. In other markets across the country where inventory levels approach the 2–3 week supply of homes, buyers are being forced to make offers with no contingencies to win the bid. When we say no contingencies, we mean no financing contingency or inspection contingency. In other words, when the buyer signs they are not backing out over financing, appraisal issues, or inspection issues.

If a buyer is getting financing and the home does not appraise, it would require the buyer to pay the difference in appraisal price and purchase price plus their agreed upon down payment for the loan. There is an exception to this whereby the buyer may qualify for a lesser down payment option, but in either event the buyer must be in financial position to put more down. This weeds out some of the buyers, which is OK when you have multiple buyers bidding for homes like we do today.

This brings us to highest and best. The definition of highest is bring your highest price. Best means bring your best terms. Buyers today are winning out on not only price, but maybe more importantly the terms. Lastly, relationships matter most in this market. Top real estate agents know who the other great agents are. This is important because they know their buyer has been counseled appropriately. While an agent cannot be judged on how their buyer will act, we do know that better agents do a better job counseling their clients. Who you work with matters in this market, both on the buying and selling end.

Pricing Strategies

The mastermind group also talked about pricing strategies for sellers. Many sellers do not realize that property values are changing by the week. If sellers really knew what their property was worth, they might think again about how tied they are to the property they are living in. Does your property fit your needs or are you settling because you have lived there so long? With today’s prices, you may not have to settle.

Many sellers honestly don’t know where they would go if they sold their current home they don’t love. There may be more solutions than you know. Sales in the last year are rising even as inventory lowers. While we may not have as much current inventory, we are getting enough to satisfy more buyers, it just goes quickly. If we know in advance what would make you move, we can call you when we run across your next home even before it hits the market.

Creating Our Own Market

Imagine home buyers bidding on your property while you find an off-market home that hasn’t been listed yet. This requires a massive database, and at the Ellis Team we have a database of people who might make a move if the right situation came up.

So, we ask you, is there a price at which you would sell your home with only one showing? We might already have your buyer. Is there a home that if it came on the market would make you want to move? We might already have that seller.

We should talk! Call Sande or Brett Ellis 239-310-6500 and we will see if we can make your dreams a reality. This is the market to do it, so do not let this opportunity pass you by. Or visit www.SWFLhomevalues.com to get a free instant price for your home. It will even email you each month your new home value.

Good luck and happy home shopping!

Interesting trends are developing in our Southwest Florida market snapshot for January 2021. The first thing you will notice from the graph is new pending sales increased 25.6% over January 2020. You might ask how this can be as we have been talking about declining inventory levels for months.

Official numbers are in and indeed active listings are down 60.1% from a year ago. New listings entering the market in January of this year were down 10.4% from last January. The combination of fewer newer listings and increased pending sales have led to the 60.1% reduction in listings.

Pending Inventory is Up

Pending inventory in January increased 51.6% which means the situation will be worse when official February numbers are released. Buyers who have attempted to purchase in this market are keenly aware of how tough it is to score a property.

I do not believe sellers are truly aware how advantageous this market is for them right now. After years of letdown some sellers just quit checking in on their home value. Others are interested but unsure where they would go. I think it is safe to assume there are many homeowners in SW Florida that do not love their current home. They’re just not sure they want to jump through hoops to make a change right now.

The real question is this? When will you be ready? A year from now, two years from now? What if this real estate market looks different than it does today? Interest rates could be a few percentage pints higher which will increase cost of future buying. Not only will it cost you to get a mortgage on your next home, but it will also cost your future buyer as well. That may limit how many buyers can purchase your home in the future.

Right now, we sometimes have 20-30 buyers putting in offers for each home. What happens if we only have 1 buyer for each home in a few years, or worse? In a normal market there are more home sellers than actual sales. This would mean less than 1 buyer for each home.

When is Best Time to Sell?

If you were selling an item at auction do you think it would be more fun to have 20 bidders or just one bidder? If there was just one bidder, there would be just one bid, and if you wanted to sell you would have to take that price or decide not to sell.

Our marketing is creating buyers from all over the country. I have seen some statistics that show more than half of the buyers are from out of state currently. To get top dollar you must advertise out of state. Ellis Team advertising reaches far and wide to bring the greatest number of bidders (offers) for your home.

When homes increase in value like they are today human nature tells us to hold because values will be greater tomorrow than they are today. This may be true, but history also shows us that many wait too long and decide to sell after they have seen the top. They still want the top, but the top has since passed. By then it is too late. The top never tells us when it is coming, so most are surprised when it happens. We are not calling for a top, so do not be alarmed. But do not blame us either if it happens and we did not see it coming.

We Should Talk!

If you are thinking of selling now, or 1-2 years from now, we should probably talk. We can come up with an exit strategy for you, and if we see a shift in the market you will be the first ones we call. The last time the market shifted we told our sellers first and got them out quickly.

You do not want to be caught sitting on an appreciating asset only to find out it started depreciating and the market did not tell you. We will tell you. Simply call 239-310-6500 and we can provide a market checkup for you. This will allow you to be notified if the market shifts. Or you can visit www.SWFLhomevalues.com for a free instant analysis.

Good luck and keep an eye on the market!

A few agents and I were sitting around talking about the future of Florida real estate. One agent speculated that this market could not last forever and would one day have to come down. His theory was that everything that goes up eventually comes back down and that cycles are inevitable.

Then we got to thinking. What if this market doesn’t have to come back down? Is it possible Florida has been undervalued compared to other nice areas of the country?

Why Are People Moving to Florida?

Let’s talk about why Florida looks so attractive, and what the future may hold. Everyone knows Florida is famous for sunshine and beaches and almost perfect weather in the winter. Florida is also attractive because we have no income tax, which is substantial compared to some states that have both state and local taxes.

Florida has also been business friendly without all the lockdowns other states have endured. We are seeing businesses flock from lockdown states and moving to Florida, bringing employees with them. The real question is, what will happen in a few months once the vaccine is widely distributed and lockdowns end?

Some business owners we have talked to have had it. Their fed up with restrictive policies and high taxes and they are not moving back no matter what. It is probably safe to assume that anyone who has moved away from high tax states is not moving back. The real question is, what will the people who wanted to move but just couldn’t yet do? Will they further their plans to make the move or just stay put?

It’s Hard to Just Pick up and Move

Some people have ties to an area. Some businesses have been in the family for generations and walking away isn’t as easy as it sounds. It takes careful thought and planning, and there are pros and cons. If these states continue to raise taxes and have high crime, it may chase the next wave of businesses and residents away as well.

People have learned through this pandemic that many jobs can work from anywhere. Companies have learned they can save high lease rates on buildings if their employees work remotely or move to less costly locations. This pandemic may have been the impetus for a transition that benefits the company and its workers, and that ship may have sailed.

Florida is the big winner in all of this, and if it continues, strong demand may not slow up when Covid comes under control. In this scenario, prices could rise further as we are not building enough homes to meet the demand.

It is true that business tends to follow cycles, but that is premised on demand rising and falling. What if demand does not fall? Supply is limited, and if demand stays constant or rises, we have more appreciation to go. We could see a lot more.

Future Warning Signs

It is also true that nobody knows the future of Florida real estate, or the economy for that matter. Rising oil prices and inflation could slow the economy and kill jobs. Florida still has a lot going for it, and that might offset whatever happens to the economy. Realtors do not know what will happen in the future. We believe more sellers will decide to cash out in a month or two as Covid becomes safer, but will it be enough to meet demand?

The bottom line is the market is good, and we expect the future of Florida real estate to be good for a while. There are a lot of wildcards in play that could affect things a few years down the road, like immigration, cost of building, oil, taxes, interest rates, inflation, etc. We are starting to see people cash out of Wall St and put it into main street. Some people thought the Dow was overpriced at 18,000. Now it is over 31,000.

Prices in Florida have risen, and we still might be a bargain. Just not the bargain we were in the past. To find out what your SW Florida home is worth, visit www.SWFLhomevalues.com It’s fast and Free. Or call Sande and Brett Ellis 239-310-6500

Good luck, and Happy Selling!

You would think rising home prices would decrease home affordability. This simply is not the case as the home affordability index nears all-time highs.

If you look at the chart, home affordability was greatest back in 2012. Median home prices averaged $131,000 for the year compared to $289,000 in 2020. Today home prices are higher, so we took the yearly average.

So, what would cause affordability to rise if home prices are also rising? Interest rates. Lower rates equate to a lower mortgage payment, and it offsets the rising cost of the home. Therefore, we are saying there is more room for further price increases.

Home Affordability Index Nears All-Time High

The home affordability index currently stands at 16. It went as low as 13 in 2012 and hovered below 16 for 5 years. The other thing that is different today is that we have end users for every home and rental. Back in 2005 we had speculators bidding up prices to flip with no real end user in sight. It was a house of cards. Today’s market is no house of cards. We have legitimate demand. In fact, we have more demand than supply.

Even if rates rise, we have room for that in the index. As you can see, traditionally the index stands between 19 and 22. At 16, we have some room if rates rise. If interest rates do not rise much, we have room for further price growth.

Furthermore, we believe Florida has been undervalued for years relative to what it brings to the table. Sunshine, low taxes, and freedom to work are just a few, and people are taking notice. With the transition to work from home jobs, Florida is on the radar. We just might see affordability numbers rise above their traditional numbers of 19-22. That makes sense to us.

Of course, nobody knows what exactly will happen. We do not know how much the price of oil will increase, what interest rates will do, and how the economy will react. We do not know if northern states will continue to increase taxes, and we do not know what Covid-19 will do. What we do know and are observing all looks favorable to Florida.

Our best advice for buyers would be to purchase as soon as you can. As prices rise, and interest rates rise, your next home will inevitably cost you more than it does today. If you have a home to sell, think about doing it now. Waiting to get more money down the road will only cost you on the buying end. It may cost you more in higher rates than you will receive with a higher price.

Our best advice to sellers would also be, do it now. You are in the driver’s seat, and that’s a fun seat to be in. While the market looks on the up and up, we never really know how long these markets will continue like this. While we can make the case for increased prices, the price gains may not continue to rise at the same rate we have just witnessed.

History shows us the market never gives advanced warning when it is going to turn. Sometimes we see signs, and we report those. We are not seeing those signs, but someday we will and there will be those that miss out. It always happens and will until the end of time. It is true in the real estate market and the stock market. You can never time the top perfectly, just as you cannot predict a bottom perfectly. It is only after it occurs that we can tell you with certainty.

If you are thinking of selling, call Sande or Brett Ellis at 239-310-6500 or visit www.SWFLhomevalues.com for an instant home valuation.

See last week’s article “National Housing Supply Shortage Predicted Years Ago”

Good luck, and happy selling! Don’t miss this market!

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