Category Archives: Cape Coral Real Estate

News and information relating to Cape Coral real estate market

What Price Ranges are Hot?

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Last week we reported that home prices were down the past few months but not to get too concerned as they were expected. This week we provide a graph that illustrate median home prices and average mean home prices so you can see what we’re talking about. What Price Ranges are Hot?

What Price Ranges are Hot Median and Average Fort Myers Cape Coral Florida home sales

Each year our home prices increase in season because we have more affluent buyers here purchasing more higher end properties than we do other parts of the year, and this pulls the averages up and sets the tone for the year. When we have bad seasons we really have to watch the summer months to spot any meaningful trends. Last season was another good one, so we’ve had a few good ones in a row,

It’s not unusual for prices to retreat after the season, so we look at year over year prices out of season and we see prices are still up over last year by the same percentages as they were in season, so we’re fine.

Now let’s delve into which price ranges are hot. As you can see from the price range chart, the $400,000 $599,999 range is the hottest with a 82.5% gain. This is not only true for the July 2013 data but also many months prior, so we can definitely say the $400-600k range is doing well. Really all the price ranges except for maybe the $300,000-$399,999 range is doing particularly well. This could be for the same reasons the less than $100,000 range isn’t doing well. We have little to no inventory anymore at the lower price range. They’ve graduated up, so those same sales are occurring in the higher ranges. It’s entirely possible many of the $300k+ range homes have graduated into the $400k= range and thus more homes are selling in that range.

Fort Myers real estate sales by price range Cape Coral

I tend to think some of that is possible, but more likely we’re seeing strength at the bottom of the market and the upper middle of the market as those that can afford $400-600k either have local businesses on the mend in SW Florida or they are out of town buyers buying second home and retirement homes.

We are also seeing some relocations coming into the market and buying property, although companies like Hertz are recognizing that fewer existing employees took the relocation offer and instead their recruiting and hiring more outside employees to take jobs here in SW Florida.

Hertz will hire some locally, however many are coming here and being recruited from other companies with certain specialty education and job history in the field. It doesn’t really change how many people Hertz brings in but it does change from where they bring them. Less of these employees coming to Hertz are actually from Hertz.

Last November we started seeing spikes in the average sale price in Lee County Florida and it wasn’t until February of 2013 before we saw significant price swings here in SW Florida, so we may have a few months more to go before we start seeing if a new price trend emerges for next year. Inventory is still tight, so with any economic luck we’ll be in for another good season, assuming we have enough inventory to sell this upcoming season. Feel free to search the MLS at TopAgent.com. Good luck and Happy House Hunting!!!

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SW Florida Sale Prices Retreat

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Yes, we said it, and don’t be alarmed as we’ve said for months we wouldn’t be surprised to see prices pull back a bit due to seasonality.  Median sale prices are still up 20.7% over last year.  As you can see from the single family homes median price chart, most of our gains occur in season January through April.  That’s because more of the expensive homes sell that time of year pulling the median price up. SW Florida Sale Prices Retreat.

SW Florida Sale Prices Retreat

We’re still receiving multiple offers on many properties and inventory is as low as ever.  Last year there were 5,668 active homes on the market and this year there is only 4,924.  Closed sales are up 6.8% over last year and they’d be much higher if we had more inventory to sell.

Cash sales accounted for 51.7% of all single family home MLS sales which is really helping with appraisals.  In a rising market it’s sometimes difficult on appraisers because they’re using comparable sales from the past even though the market is rising now.  Cash sales typically aren’t subject to appraisal, so as they close they provide fresh new sales data that is sometimes more indicative of the market.

In July 1,466 new listings came on the market.  Some of these aren’t actually new listings as they could have been withdrawn or expired and re-listed.  July also saw 1,149 listings go pending, so approximately 78.4% of the new listings went pending.  In reality it wasn’t because some of the pendings would have been on properties listed before July, but it does show that the market is turning over at a high rate.

Average days on market are falling to 49 days now, down from 57 in June and 60 in May.  This is a result of buyers having fewer choices when searching for homes.  Buyers are really surprised when they find out there are only a few homes on the market that match their criteria.

If you’re considering selling now may be a good time to research your options.  Inventory is critically low and we’ve been selling our listing inventory to the point we have few listings left.  We’re selling them as fast as or faster than we can list them.

Just because it’s a seller’s market it isn’t a license to get crazy on pricing.  Prices are going up however we don’t have runaway prices as the overall economy still limits how fast and how far prices will rise.  If we had a great economy prices could be much higher, although we would see more sellers entering the market which would add supply.

Builders are building again which is helping pick up the slack as today’s market just can’t fill the demand.  Buyers are often left scratching their heads wondering how they’re losing homes to other buyers.

If you’re a buyer and you want the house, don’t leave the door open for the seller to entertain other offers.  If you’re offering below asking price and the home is priced fairly, expect that someone else will offer full price or more.  More buyers are losing their first or second choice by leaving the door open.

Price isn’t the only way to make your offer look good to the seller.  Offer friendly terms, larger escrow deposit, and position yourself from strength.  Sellers not only look at price but how likely the buyer is to actually being able to perform.  If your offer is light on down payment, has contingencies, or other outs the seller may question your ability compared to other buyers.

Ask your Realtor to make your offer look good to the seller.  If you need help, feel free to call the Ellis Team.  We’re here to help. 239-489-4042

Good luck and Happy House Hunting!!!

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5 Things a Buyer Should Know About Lee County Real Estate

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It’s Labor Day weekend which brings lots of visitors to our area for the long weekend. Some return to our area for relaxation and fun and others are new.  Many visitors fall in love with SW Florida and get the itch to buy.  Here are 5 things a buyer should know about our current market. 5 Things a Buyer Should Know About Lee County Real Estate.

5 Things a Buyer Should Know About Lee County Real Estate

1.  SW Florida is a Desirable Place to Live and Work:  In fact large companies like Hertz and Alta Resources are moving their headquarters to SW Florida because it’s an easy sell to employees or future employees.  Not every employee can or will relocate, so companies have to ask is the destination attractive to future employees.  Invariably the answer is Yes to our area.

2.  Prices Have Risen From Their Undervalued Lows:  Back in 2008-2009 SW Florida was littered with foreclosures due to the excess of the mid 2000’s  SW Florida was overbuilt and the flipping frenzy ran out.  Buyers contact us today hoping to buy at 2008 prices.  Some still believe our market has not changed in last 4-5 years and they can buy at those undervalued prices.  That’s just not true.

3. Listing Inventory is Down: Inventory has been falling. January single family home inventory stood at 6,215.  Today it’s down to 4,924 and has been falling every month.  It’s common to receive multiple offers on a property if it’s priced correctly.  Buyers are surprised there may only be 1-4 homes that match their criteria on the market.

4.  Interest Rates Are Rising:  We saw a big jump back in May, over 1% jump in about 5 weeks.  Every 1% jump takes away 9% buyers purchasing power.  That rate swing back in May means a buyer that could afford a $200,000 mortgage before the increase could only afford a $180,000 mortgage after the swing.  Buyer’s purchasing power is going down, and this wouldn’t be the end of the world if prices were falling, but see Point #2.  Prices are rising, not falling.  To make matters worse, we expect rates to go up even further.  The Feds have been keeping rates down with stimulus by buying.  The Fed has indicated they will scale back buying treasuries at some point and this has caused the bond market to react.  We know it’s coming, and some speculate it could happen as early as this September.  When it happens, rates will eventually go up.  If you’re on the fence, waiting to buy will absolutely cost you, even if prices stayed the same.

5.  Educate Yourself on the Market:  It does no good to read articles from 3 years ago on what was going on in the market.  It also does no good to read about one market in the country and expect everywhere you visit conditions are the same.  If you’re new to the area, or even if you’ve lived here awhile, it pays to get the latest data and analysis.  When we go out to a home to do a CMA (Comparative Market Analysis) we have to update ourselves with the latest information.  Even if we sold 15 homes in that subdivision last year it doesn’t help figure out today’s prices.  We arm ourselves with data on each listing appointment.  Why wouldn’t a buyer want the same information when purchasing?

Feel free to visit Topagent.com  You’ll have access to our Future of Real Estate Show where we update you on the market via video and explain the latest charts and graphs.  Or you can read our Blog at http;//blog.topagent.com  Feel free to search the MLS like an agent at Topagent.com, or visit our virtual tours.

If you need help or would like to talk to a professional, we’re here to help 239-489-4042  Good luck and Happy Buying/Selling!!!

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Inside the June 2013 SW Florida Real Estate Numbers

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The past several months we’ve been reporting rising home prices in SW Florida.  Everyone seems to agree the Southwest Florida housing market is in recovery.  For awhile we’ve had tight inventory with escalating prices.  Periodically we like to go inside the numbers and breakdown various facets of the market.  June 2013 SW Florida Real Estate Numbers.

June 2013 SW Florida Real Estate Numbers
June 2013 Home Sales Breakdown

Today we’re looking at traditional sales versus distressed sales.  As you can see from the attached chart foreclosure sales are down 35.1% from last year and short sales are down 43.9%.  Traditional sales are helping to pick up the slack but the limited inventory is holding sales down.  In other words, if we had more inventory to sell we’d surely sell it.

Traditional median sales price increases to $210,000 which is allowing many more sellers who were previously underwater the ability to sell their home without being a short sale.  However, there are still plenty of underwater homeowners who’d like to sell but are trapped.  They’ve held out this long and don’t want to jeopardize their credit by selling short, so they wait.

People talk about shadow inventory from the banks as if they’re holding back inventory waiting for prices to rise.  We don’t believe banks are holding back.  We don’t believe there is a glut coming to the market.  There will still be more foreclosures in the future as economic growth is anemic and underwater owners are still susceptible to changes in their personal employment situations, however we believe it will be a manageable number.

The real shadow inventory is the trapped homeowners waiting for the market to come back to a point where they can afford to sell.  In a normal market sellers buy and sell locally as their wants and housing needs change.  This hasn’t been happening here locally until recently.

In the past few months we’ve had several sellers placing their home on the market only to buy a different home that better serves their needs locally.  This trend will continue as prices rise, and especially in light of the fact interest rates are still relatively low, currently in the mid 4% range.

As prices rise we could see a little more inventory which will increase sales volume.  Builders are building again which is helping to pickup the slack due to the shortage in inventory.

We are seeing more homes come on the market in the $200,000-$300,000 range which should boost home sales in that range on inventory levels alone.  We’ll begin to see move-up buyers, lateral buyers, and transitional buyers who may not want as much yard or as much home due to their age.

One thing is constant is that the market is always changing, and we’re witnessing some pretty phenomenal positive changes in our market right now.  Because our market was healing for so long some started to believe we’d never see this day.  It’s easy to get bogged down on what has been and lose focus on where the market is today and where it’s going.  Real estate is a lot like a sports team.  “What have you done for me lately?”  The glory years of yesteryear don’t matter.  What your home used to be worth on paper is in the past.  The only thing that matters is today, the here and now.  A property’s value is not what someone paid for it a long time ago but rather what it’s actually worth today independent of its former value or cost.  Cost does not always equal value.

We’ll keep our eyes focused on the numbers and keep reporting them to you.  If you’d like to search the MLS you can at www.Topagent.com  If you’re a seller and you’re considering selling, you might be surprised to learn what your home is really worth today.  To find out, give us a call at 239-489-4042

Good luck and Happy House Hunting/Selling!!!!

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Appraisals an Issue Once Again

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Real estate agents have been complaining that appraisers have been under-valuing property again. Recently the National Association of Realtors listed the Cape Coral – Fort Myers real estate market as the #3 fastest rising home price markets in the country. Appraisals an Issue Once Again!

Appraisals an Issue Once Again

Appraisals are one person’s opinion of value based upon recent sold data.  The problem is in an upward rising market, past sales are yesterday’s news and today’s values are higher then a few months ago.

In a declining market appraisers are quick to make a time value adjustment as sales from 3-4 months ago would be worth more than today’s market.  Appraisers aren’t as quick in a rising market if you ask many real estate agents, and therein lay the problem.

Buyers and sellers quite often sweat out the appraisal which unfortunately doesn’t always occur right after the contract.  Many sellers are requiring the appraisal number to come in within 15 days of contract acceptance to remove this obstacle.

Typically a buyer gets pre-qualified for a loan and then goes out shopping for a home.  With inventory so limited in SW Florida it’s getting hard to find suitable homes in a buyer’s price range, and when you do find a home for the buyer the buyer isn’t holding all the cards.  The sellers are pretty much able to dictate certain terms as there are several buyers looking at the limited inventory in some price ranges.

The banks usually order the appraisal from an appraisal management company who hires the appraiser.  The management company serves as a middle man to keep the lender from influencing values.  A problem is if the appraiser is not local or is unfamiliar with the area, or simply chooses bad comparables, there isn’t a good way to fix a bad appraisal.  The bank is typically stuck with that number, so the buyer is stuck, unless they’re willing to switch lenders.

We work with one local lender who has access to 3 appraisal management companies, so if we get a bad appraisal from one company they can seek another opinion without being stuck.  This does add time to the process though and isn’t ideal.

This forces sellers to take the best possible buyer, and price isn’t always the most important issue.  True enough, in a tight supply market, all buyers are going to be at a high price, but what really makes a buyer stand out from another buyer are the “Other” terms, like closing date, and amount in escrow.

If you have a buyer putting 20% down but only putting $1,000 in escrow it looks suspicious to a seller.  The escrow money is counted towards the down payment money anyway, and it is refundable if the buyer cannot get their financing assuming the contract is written properly, so sellers ask themselves, “Why isn’t this buyer putting more money down upfront?”

If a seller has 2 or more offers and one has $10,000 in escrow and one only has $1,000 down, which offer sounds better?  Even if there isn’t another offer Yet it still screams weak offer and throws up a red flag.  In a competitive market where a buyer isn’t in competition with the seller but rather with others buyers, it pays to make your offer look strong anyway you can.  If you’re financing there is a limit to how high you can go because it has to appraise.  Do the other things to make your offer stand out.

Listening to your agent will help.  If you don’t make your offer stand out, you’ll be on your 4th or 5th favorite home instead of your 1st, and in this market many times there aren’t more than 3 to choose from.

If you do run into an appraisal problem, there are things you can do.  Perhaps the seller may consider pre-paying the mortgage insurance which might eliminate the need for the property to appraise.  Speak with your agent and lender about these options.  Don’t let a bad appraisal Kill your sale.

Good luck and Happy House Hunting!!!!

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Listing Inventory in Southwest Florida Down Again

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A few weeks ago we did a story called “Riding Low” about real estate listing inventory falling is SW Florida. We had May data to work with and at that time listings were lower than they were all last year and we speculated based upon pending sales they would most likely go lower when June data was released.

Listing Inventory in Southwest Florida Down

Well, June data was just released and indeed listing inventory fell again to its lowest level in quite awhile. Last year agents from Cape Coral to Fort Myers to Bonita Springs to Naples were all complaining about lack of inventory. It is putting pressure on buyers in 3 ways.

Prices are going up rapidly. Median prices are up about 30% over last year. This doesn’t mean all homes are up in price as some ranges have lots more inventory than others. Buyers today are being squeezed by rising prices, that’s for sure.

Secondly, interest rates are going up and this is causing the cost of ownership to rise. It’s a double whammy. Prices are going up and so is the cost to finance. Throw in some insurance rate increases and even a tax millage increase and you’ll see that some buyers are quickly being priced out of the market.

Lastly, when there is a shortage of homes on the market buyers are in fierce competition with other buyers. It’s very frustrating to look at homes and select a favorite only to find out the seller just accepted another offer, or worse is in a multiple offer situation and a bidding war ensues.

We just listed a short sale that had interest from several buyers because it has been kept up very well. We had to wait 5 day including a weekend because the seller’s loan was a FNMA loan and they now require a waiting period before signing contracts. We did that and a few buyers were very disappointed. We see this quite frequently on our listings and our buyer agents deal with this on a daily basis with our buyers.

This is the market we are given. It does no good to complain, although complaining sometimes makes us feel better. The best solution to having success in a market like this is accepting the market we’re given and educating our customers on how to succeed in this market.

Setting reasonable expectations upfront means educating our customers with facts, data, and logic. Facts help overcome emotional objections and get us in the mindset to make an informed and intelligent decision rather than a seat of the pants knee jerk reaction.

Women might appreciate and notice that they’re male significant other will study their fantasy football team until the cows come home but when it comes to using that same diligence on studying the housing market the motivation isn’t there. Some people are into fantasy football and some people are into studying the market, and neither way is right or wrong. I’m just saying as a buyer or seller it pays to either study the market as if you want to win your league or hire someone who knows.

Buyers and sellers who try to go it alone sometimes make some costly mistakes. Real estate is a complex transaction. Pricing is just one component. Taxing, deed restrictions, title, survey, financing, transfer protocols, HOA and condo associations all play into things you need to know about, and this is just the tip of the iceberg.

If you’ve got questions on buying or selling real estate in SW Florida, don’t hesitate to call someone who can guide you. If you’d like to search the MLS and have a look around, feel free to do so on our website www.Topagent.com If you’d like to get a valuation on your property go to www.SWFLhomevalues.com

Good luck and Happy Buying/Selling!!! Listing Inventory in Southwest Florida Down.

 

National Housing Market

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Lately we’ve been focusing on the local real estate market as we know all real estate is local.  However, sometimes the national market helps us spot trends that may affect us in the future. National Housing Market Update.

National Housing Market

When Northern markets have struggled in past years it made it difficult for some buyers to purchase down here because they no longer had the equity they used to have in their current home or they just couldn’t sell their home to make the move down here.

RE/MAX International releases a national monthly housing report which is a survey of 52 metropolitan areas. The latest report released in July shows transactions were up 4.1% over last year even though they dipped from May 2013 levels.

This dip could be due to limited inventory nationwide.  This year there are 23.9% less homes on the market. This would explain why we have only 3.0 months supply of inventory nationwide.  This low supply typically indicates a sellers market.

Rising rates may curtail transactions somewhat as less people qualify for what they used to just a few short months ago.  Fannie Mae did a study that said this theory isn’t true.  Sometimes rising rates act as a motivator.  Inventory levels are probably the biggest threats to transaction volume right now.

Local numbers haven’t been released at the time this article is written.  Our internal analysis suggests a 30%+ rise in price over last year with all price ranges except for $100k and under posting fair to large sales gains.  The reason the under $100k market is posting losses in sales is because with recent price gains there are fewer lower priced homes to sell.  We saw exceptional strength in the $600-1 Million price range as well as the $250k-$400k range.

We have 14% fewer active listings and a 17% rise in new pending sales locally.  This too should drive prices higher going forward.

To relieve some of this pressure builders are seeing more activity.  Going forward building will become a viable option.  The only downfall to building is locking in the interest rates.  If it takes 6-9 months to build a home there is a significant amount of time rates could rise.  Remember, a 1% increase in rates takes away about 9% purchasing power, so a buyer has to be careful when they select their home today that they can afford it when the home is completed.  Locking in rates that long is almost impossible and costly if more than 45 days out.

Perhaps builders will offer interest rate protection one day but either way it’s built into the price of the home.

More than 800,000 homeowners regained positive equity in their home in the 1st qtr of 2013.  This could spur more sellers to enter the market.  Many homeowners have been trapped in their home and can now afford to make the move.  Many are motivated to beat the interest rate hikes.  Even if they wait for their home to go up a little bit more in value it still costs them to wait as the home they’re buying is also going up as are the rates to finance it.  Waiting is a double whammy for a seller right now.

If you’re thinking about making a move in today’s market, give us a call at 239-489-4042 We’ll show you your options and you can decide if a move makes sense for you right now.  It always helps to get the facts before deciding one way or the other.

Good luck and Happy Selling/Buying!!!

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Riding Low

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Listing inventory is riding low as it usually does this time of year.  If it seems lower this year, you may be right.  I spoke with a Realtor this week who usually carries 30 listings and they’re down to 6.

Fort Myers Cape Coral real estate inventory Riding Low
Single Family Home Inventory

 

As you can see by the graph, official numbers from Florida Realtors bear this out.  We’re still waiting for the June numbers to come out.  May’s numbers showed a decrease from 2012 inventory levels by 372 homes.

Last year inventory levels reached their lows in July but we’ve already surpassed those numbers with May numbers, so we’ll be watching June and July numbers when they come out.

Ellis Team at RE/MAX buyer specialists were busy this past weekend, and showings seem to have picked up a dramatically in the past week too.  Showings on our listings increased.  I checked with our listing coordinator and he said this past week was very busy and the week before wasn’t.  Of course, the week before was July 4th week so people tend to concentrate on outdoors and fun that week anyway.

Several of our listings have been receiving previews and showing for some of the Hertz relocation employees.  A few weeks ago I was quoted in a News Press article and while the article never said who had the Hertz account people inferred that the Ellis Team did so we’ve been flooded with people calling and emailing asking us to show their rental or home to Hertz employees.

We don’t have the Hertz account.  I had people argue with me and tell me we did because they thought they read it in paper.  These people weren’t looking to list their rental or home for sale, they just want employees to know about it.

The fact is, no matter who has the Hertz account those employees will know about it if the property is listed.  I assure you many of our listings have had interest from Hertz agents.

Every year I go on listing appointments and some sellers will say we’d like to sell to the Germans, or the Canadians or whoever else they perceive are buying this year.  It’s almost as if they want top dollar and they think the Germans will overpay for US homes because they don’t know better.

I assure you, nobody likes to overpay for a home no matter where they come from.  We work with many International customers and they all do their homework.  Hertz employees are no different.

And really, does it matter where the buyer is from or who they work for when they’re buying your house?  Money is money and most sellers we meet with want top dollar.  There’s nothing wrong with that.  We believe everyone should receive what the market is willing to pay.

When we list your home your home is exposed to buyers locally and internationally.  We use traditional print marketing as well as advanced online techniques that gets your home noticed.  Your buyer could be from Hertz or Intel, from Florida or Switzerland.

With inventory levels at lows this year it may be a good time to start thinking about selling.  Interest rates are rising, so if you’ll be getting a mortgage on your next home it could really cost you to wait.  See our last few articles at Blog.TopAgent.com to read about how rising rates are costing home buyers.

The market is rarely constant.  It is always changing.  If you’re interested in making a move, call us to find out where you stand in today’s market. 239-489-4042. Our office address is 7910 Summerlin Lakes Dr Fort Myers, FL 33907

Good luck, and Happy Selling/Buying!!!!!

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Realtors Using Video Revisited

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Last year we did an article about Realtors using video in their business.  Back then about 14% of Realtors were using video.  We suspect today that number has grown a bit as more and more people are watching videos in their travel time and in between moments of their life on their smart phones and tablet devices. Today we’d like to update that story with Realtors Using Video Revisited

 

Realtors Using Video Revisited
Ellis Team YouTube Channel

Last month alone our YouTube channel www.Youtube.com/brettellisfl  viewers watched 11,792 minutes of video.  That’s over 196 hours of video.  Of that traffic, mobile apps and direct traffic accounted for 51% of that activity. Germany was the leading country after the United States to watch our videos.  Brazilians watched for the longest average duration followed by the Netherlands, Switzerland, and Austria.

While it helps to have professional video and audio it isn’t required.  Putting something at least decent up is better than nothing as long as the content is compelling and informative.

One thing you’ll notice about our YouTube channel is that we’ve updated the skin to YouTube’s standards.  This is a recent change Google has adopted.  They want pages to look similar across platforms and devices.  We created the beach graphics that have a similar theme to our Google+ Business Page. You can find a link to our Google+ page from Topagent.com if you’d like to see an example.  They also requested different sizes so they’ll look good on a desktop computer, a tablet or iPad, and a Smartphone.

Google is rewarding those who adopt their standards in local searches.  For instance, if you search Fort Myers Real Estate on Google the Ellis Team at RE/MAX Realty Group comes up in their listed map search as well on various pages.  The results in the various pages change all the time, but the map listings have stayed fairly constant.

We believe using video heavily has helped how Google rates websites.  We still do many other things as Google doesn’t rely on any one thing.  However, by doing many things and using video helps raise the bar and in Google’s algorithms separates serious Realtors from less than serious.  Google’s term is authority.  They are trying to identify authority and reward websites that provide authority.

In addition to SW Florida real estate updates published on our YouTube channel, we have a separate YouTube source where we post our property videos.  Video is playing an increasingly larger role in real estate searches.  Some buyers are searching for agents and properties on YouTube and skipping the search engine process altogether.

Look no further than teenagers today.  They don’t search on computers much.  They do search YouTube videos all day long, or do mobile searches on the phone.

Agents today must change they way they market to reach today’s buyers.  If you think teenagers are the only ones searching on mobile devices, just look around and watch people.  Our analytics tell us who is searching, from where, and how long on our websites.  The results will astonish.

Our advice would be, if you want to attract more customers for your listings, step outside the box and try new things.  Ask successful agents where they’re finding buyers today.  Look around and observe people yourself, and if you see a niche, jump on it.  We’re always looking for new ways to reach buyers and sellers, and if the market shifts in the future, (and it will) we’ll be searching for ways to capture that demand.

So get out there and take some video and post it online.  If it has decent audio and video, you’ll be glad you did.

Good luck and Happy House Hunting/Selling!!!!

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What Do Buyers and Sellers need to Know Now About Rising Interest Rates?

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What Do Buyers and Sellers need to Know Now About Rising Interest RatesInterest rates have been rising, and we expect they could rise further. The primary reason is the Fed has indicated it will raise rates by scaling back or ending the quantitative easing as the economy improves. We’re not there yet, but writing from the Fed is on the wall and it’s spooked the bond markets. What Do Buyers and Sellers need to Know Now About Rising Interest Rates?

30 year mortgage rates have risen over 1% in the past 7 weeks. You’ve probably heard Realtors say “Now is a great time to buy with rates so low.” Here’s what you need to know about rising rates as a buyer or a seller.

Buyers, in the past month or two you just lost about 10% purchasing power. Your income won’t buy as much as it did back in May. Did you get a 10% raise this year? Most people didn’t, but the cost of buying a home is going up.

For most buyers the increase in rates means they’ll have to buy less home. Their income didn’t go up, so they either have to put more money down or borrow less on the same income. This isn’t a pleasing thought to many homebuyers as inventory levels have been low and prices have risen about 20% over last year. Buyers are getting squeezed at both ends, and rates may get worse.

If you’re living in an apartment or renting a home, now may be a time to get serious about your options. Prices usually stagnate this time of year. See last week’s article. However, SW Florida is adding two new companies with employees who will either be looking to rent or buy, so this will add to the pressure on the inventory. Who knows how this will affect prices. There are several variables in play for our local market.

Construction has been picking up to help with the shortage of resale homes but that takes time. Waiting to buy a home in today’s market has cost buyers dearly. They either have to pony up more money or accept that they’ll have to sacrifice the location they desire or features in the home. Of course, expectations are all relative. A buyer will afford less than a few months ago, but considerably more than back in 2005, so it’s all relative.

Sellers, don’t get too confident here either. Yes, prices have been rising, but they typically do during season. See last week’s article (June SW Florida Real Estate Market Update), or visit our Blog at http://blog.topagent.com

Buyers have just lost 10% purchasing power. Even though we have low inventory levels this means that fewer buyers now qualify for your home. They may still qualify, but for lesser homes. If rising rates knock enough buyers down the ladder it can affect the market. Our market has been doing well the past few years and prices have risen. We’ve had low rates the entire time and now that rates are rising, it will damper further increases. Until we get this economy humming like it should there is a cap to how fast prices will climb.

Nobody knows the future on the speed of prices. We do know 2 companies are coming, and many up North are buying for retirement or enjoyment. We also know rates are rising. How these positive and negative forces counter balance each other will be interesting to watch.

Our advice would be: Buyers, get your ducks in order and call us soon. Even if prices stay where they are for awhile, rising rates will hurt you.

Sellers, don’t get too cocky. Rising rates will hurt buyers, and if it hurts buyers, it could eventually hurt you as the seller. Plus, if you’re selling and buying another home, waiting to sell could cost you if you’ll be getting a mortgage on your next home.

If you’re thinking about your options, it would probably pay to sit down with us and discuss it. This is one of those times when waiting to see what happens may cost you. Or feel free to search the MLS at www.Topagent.com to see what’s out there.

Good luck and happy buying/selling!!!

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