We’d like to introduce you to the neighborhood market report update, and it’s a good one. It’s a popular feature for those that know about it, and one we haven’t found on any other website. It’s just one of the features at www.LeeCountyOnline.com that makes it the Go-To real estate website in Southwest Florida.

Neighborhood Market Report Update

 What is the neighborhood market report update and why is it important to me you might ask? This report shows all the active listings, pending listings, and sold listings in one easy report.  However, it also allows you access to all the photos of each listing, even the pending and sold listings.

In a nice and easy to read format, you’ll also be able to see the price per square foot and the days on the market. It will also show you the sold date on each sold listing, so you can decide which listings you want to click on and check out.

We find this particularly useful for those who have a home on the market or are considering putting their home on the market. You can quickly look at your neighbor’s kitchen, bathrooms, and flooring when determining where to price your home. Many times, those considering selling see what their neighbors home sold for if they are lucky. They really don’t get to see the upgrades and renovations unless they personally go inside.

We’ve included a sample report. We randomly picked a neighborhood that only had a few listings so you could get an idea of how the report shows the actives, pending, and sold properties. This neighborhood doesn’t have any pending sales currently.

Upcoming Changes

 We believe there may be a change coming soon to the way listings are displayed in MLS and on the portals. If these changes occur, it could drive more traffic to the bigger players who hold more of the listings, and the data. Currently www.LeeCountyOnline.com holds more of the data, and the Ellis Team combined with Keller Williams controls a large share of the market. By control I simply mean we work with a larger number of listings than a lot of brokers.

Find Out What Your Home is Worth

One of the other things people love on this site is the Free home valuation report. The quickest way to get there is www.SWFLhomevalues.com but it is hosted on the LeeCountyOnline.com site. The home valuation tool not only gives a fast value for your home, but it also automatically updates the value each month. This is especially helpful when the market is changing.

Advanced Searching Capabilities

Customers love the advanced search, which gives you control over 20 additional MLS features you can search on. And if that’s not enough, our agents can log in and help you create a search on every single MLS feature, even the ones you don’t know about.

In Person

Of course, Sande and Brett Ellis love talking with people about their real estate needs. We don’t hide behind a website to serve you. Our website is there to provide additional tools nobody else offers. Brett and Sande are here to provide insight and experience few in this market possess. Simply call us at 239-310-6500. We can’t help you if we don’t talk to you. Even if you’re not ready yet, no question is a dumb question.

Always Call the Ellis Team at Keller Williams Realty and let’s see what’s in your future.

SW Florida Real Estate Market Update

See last week’s article “Local Home Prices Down 3.6% Officially From Last Year“

Official sales numbers are in and it shows August median local home prices down 3.6% from last year. Average home prices were down 7.5% from a year ago. August median prices were $405,810 this August in Lee County compared to $420,750

Average home prices this year were $535,629 compared to $578,873 last year.  If we go back and compare against the height of the market back in April and May of 2022, median home prices are down 13.66% and the average local home prices down 18.71%

We have been amazed at how stable pricing has been given two factors. Interest rates have gone from the 2’s into the 7’s in a record amount of time.  Secondly, inventory has quadrupled in the last 18 months.  While prices have remained amazingly stable the last 12 months, most people don’t realize the price declines we saw last year from May through December as rates began rising rapidly.

Buyers Waiting For Prices to Fall

We hear many buyers are cautious to purchase because they believe prices are going to fall. Nobody knows for sure if prices will continue to drop. However, most buyers do not realize prices have already fallen almost 14-19%

Buyers listen to the news, and the headlines say prices may fall out and foreclosures could rise. We believe the economy would have to get a lot worse for anything like that to happen.

We do know that for every 1% rise in rates it takes away approximately 11% purchasing power away from the buyer. Because rates have gone up more than 4%, you might fear buyers can now afford 44% less than they could 18 months ago.

This may be true. The hope is that enough people with money will continue to come to Florida. Interest rates have hurt a large portion of the market, but people moving here are the wildcards.

What We’re Watching

We are keeping our eye on inventory levels. They are spiking.  If the trend continues it would tell us more people are putting their home on the market than people moving here. For right now, inventory is OK.

However, we have noticed the rate of increase in listings the past few weeks. If the rate continues to climb while pendings continue to go down, this could change the dynamics in a matter of weeks.

Thinking of Selling?

I would call the Ellis team now 239-310-6500. Our inventory is still low as our homes have been selling. We hear from other agents they expect a slew of homes coming on the market starting in October. We have been on several listing appointments in the past 9 months where the sellers haven’t decided to sell yet. It could be that many decide all at once the time is right. Or visit www.SWFLhomevalues.com to get an instant online estimation of your home’s value now.

Government Shutdown

We are writing this article the Tuesday before an anticipated government shutdown. Any shutdown will not help real estate sales, as new national flood policies will not be written. Buyers will be forced to buy private flood insurance at sometimes much higher prices, or wait to close. We may be able to assume a seller’s flood policy if they have one.

FHA, VA, USDA loans may cease as well. This would disrupt a certain portion of the financed buyer market and would certainly harm home sales.

Tricky Times

Tricky times call for experienced agents. Home insurance is difficult on a good day. Throw in possibly higher rates, or high rates lasting into 2024 and 2025, and a government shutdown and you’ve got a mess. If you are selling today, you need an expert who’s been through market shifts, government shutdowns, and insurance problems before. About 85% of the agents working today have never worked in a shifted market, and even fewer were here for the 1995 and 2013 shutdowns.

Experience Matters

Always call the Ellis Team at Keller Williams Realty 239-310-6500. The Ellis Team has been voted Best in Real Estate 11 years in a row by News Press Readers.

Good luck, and Happy Selling!

The Lee County Florida housing demand gap widens in August to its largest point in years. Last July we reported the gap was widening. Since then, the gap has widened another 21%. This means that Supply is outpacing demand.

Housing Demand Gap Widens

Back on June 7, 2022, we knew that the market crossed over. More homes were coming on the market than going off.  Inventory started increasing in February of 2022, but it wasn’t until June that we reached this critical point.  Even though we say critical, it still takes months for it to influence the market.

We have been seeing the number of price reductions in the 9-11% range of all listings as sellers have been reacting to the market. This past week it was 7.9% and the week before that was 8.08%. This tells us that sellers in general are tired of reducing their price, or they believe a buyer is just around the corner.

What might be around the corner is another home on the market competing with existing homes. Buyers today have more to choose from, and they are being squeezed by higher interest rates.

Last week we posted an article about how home prices have remained relatively steady. The current market is tracking like 2018, and 2018 showed us the market can take more listings without significantly impacting home prices. However, if you are a seller and wish to move, you must be price competitive against your competition. You either win on price, or your home must offer value that exceeds your neighbors.

This value could be a refurbished home with a new kitchen. It could have newer major items such as roof, HVAC system, appliances, water heater, etc. Or it could have some improvements your neighbors do not have, like a pool and spa, outdoor kitchen, or other upgrades.

Marketing Matters

 No matter what your home has, in addition to offering value, it must be marketed correctly. I know of a home on the market listed by another Realtor that is not selling. Their neighbors cannot believe it hasn’t sold yet. I have no idea where the agent may be marketing the home, but I did spot a glaring item that may be holding buyers back. Sometimes things in the MLS are entered incorrectly. This item I feel should be mentioned in the confidential comments. The fact that it isn’t leads me to believe either the agent is inexperienced, or the agent has no idea it is entered incorrectly.

What Will the Fed Do?

Some people believe the latest labor numbers will give the Fed a chance to pause rate hikes in September. Others believe they are not done and will continue the rate hikes. Rising interest rates along with rising insurance costs are sapping home buyers’ buying power. The housing demand gap widens in August, and further rate hikes could widen it even further.

Home prices are steady for now, but there could come a tipping point where there are just too many sellers for the number of buyers. So far, not all sellers are motivated. They do not have to move. Some would like to, but they don’t have to. Over time needs change, and if listings keep piling up, sellers may be forced to sell at lower prices.

This is why we track supply and demand numbers. It gives us clues into the future. Prices are a lagging indicator to these metrics, and sometimes the metrics change back again before prices move.

Current Market Index

A better barometer of the forward direction of the real estate market is the Ellis Team Current Market Index. We no longer publish this index as it is reserved for our clients. What we can say is the index has moved in one direction for 4 straight weeks.

If you are thinking of selling, Always Call the Ellis Team at Keller Williams Realty 239-310-6500. Not only will you receive the finest marketing in all of SW Florida, you’ll also receive decades of experience which is especially helpful in changing markets. And you’ll receive our up-to-the-minute statistical analysis, so you can make decisions ahead of other sellers who won’t be as educated as you on what’s really happening.

Good luck, and happy selling!

Search the MLS like a Pro with adnaced search features not found on other sites.

Top 10 Buyer Questions

Southwest Florida home prices remain steady for the last 12 months. The median home prices in July of 2022 were $420,000. This year it was $417,000, for a drop of $3,000. The average home price last year was $550.845. This year the average was $585,866, for a $35,000+ gain.

As you can see by the chart, the averages tend to be more volatile, so the median price is the one most quoted by economists. Median home prices throughout the year have been bouncing around between $400,000, and $447,500. That’s roughly a 10% swing, but of course there is some seasonality to the market. Year over year the median price is down .7% in July.  Fort his reason, we would say home prices remain steady.

Interest Rates Rising

 Given that interest rates have risen at their fastest rise in history, home prices have held up pretty well. This is a function of people moving to Florida and money that has been floating around in the economy. Everyone always asks, where are home prices going from here?

Excess money in the economy is burning off. Consumer savings is down, and consumer debt is increasing, which is a sign that inflation and high interest rates have taken their toll.  We may be getting close to the point where consumers slow down spending en masse. When this happens it invariably leads to a slowing economy, and job loss. Currently unemployment is at 3.6%, but that could rise once the slowdown begins.

Once student loans become payable in October excess money in the economy may not be available for spending.  Additionally, about $1.5 trillion dollars of commercial debt is coming due by the end of 2025. Companies will be forced to make difficult decisions. With credit costing 2-3 times what it did before, many companies may decide to close, default, or close locations and sell. These decisions may occur in 2024 because the lead-time for refinance takes a while.

Lending

 Banks are not as apt to lend anymore either, so some companies who decide to refinance their loans may not be able to.

For these reasons, we believe the Fed should halt further interest rate increases. It takes time for these rate increases to have their effect, and the damage may already be done. Sometimes it’s wiser to let the pot simmer for awhile before turning up the heat further.

The Fed is known for over-shooting their target. If they keep raising rates, they may very well do so again. Of course, our government is not making their job easier either. We keep spending, and as long as we do that, it means the Fed has to tighten monetary policy. If we could slow down spending, they wouldn’t have to tighten as much.  But that’s another story for another day.

Bottom Line

Florida is still a desirable place to live. We have no state income tax, lower property tax rates than many areas, and good weather, for the most part. This article is written before Tropical Storm Idalia makes her full presence known, so hopefully Lee County fares well.

Nobody knows for sure what will happen with home prices.  All we know is rising interest rates, insurance, and HOA/condo fees are not helping buyers spend more. That is money that could have gone into seller’s pockets, but now is going to total cost of ownership. Hopefully insurance reform will help lower the cost of insurance, and we won’t see many more storms.

If you have a property to sell, always call Brett or Sande Ellis at 239-310-6500 or visit www.SWFLhomevalues.com If you’d like to purchase, call the Ellis Team at 239-489-4042 or visit www.LeeCountyOnline.com

Good luck and have a Happy Labor Day Weekend!

See last week’s article “SW Florida Declining Home Sales Not Caused by Low Inventory“

I’ve been reading that nationally homes sales are down because of declining inventory. Locally, SWFL declining home sales have not been caused by declining inventory.  In fact, local inventory has almost quadrupled in the last 18 months.

On February 15, 2022 I calculated 1,071 single family homes on the market in Lee County. Today, that number stands at 4,178. Low inventory cannot be the reason homes are not selling. Currently there is a 4.2 months’ supply of inventory on the market compared to 2.5 months’ last year.

SWFL Declining Home Sales

Hurricane Ian had nothing to do with the numbers. We were seeing declining pending sales, closed sales, and pricing before the hurricane.

Often, I go on listing appointments and the sellers ask me how much prices are going up. Most sellers are shocked when they see the numbers and realize home prices are not appreciating. They read national headlines about low inventory keeping home prices steady and assume that is happening here. All real estate is local.

While many parts of the country probably have low inventory levels, SW Florida does not. Our inventory levels are increasing, and we track them by the week. When you track listings, pending sales, closed sales, price reductions weekly you begin to see trends before others do.

These Stats are Not New

If you read this article or our Blog you’ve known for quite awhile what was really happening. When supply outpaces demand, it is hard for home prices to rise.  In July, median home prices fell .7% versus last year.  That is only part of the story. Median home prices have fallen 5 straight months versus last year. Median home prices are also down 2 consecutive months currently, and down 3 out of the 6 in month over month comparisons this year.

While inventory is rising, home sales are going down. This July marked the lowest point in 6 years for home closings. Pending inventory is down 4.2% over last year, so we’re not too optimistic August closings will be any better when they are released next month.

Through it all, The Ellis Team feels good about the market in general.  We’ve been through shifting markets before. What hurts sellers more than anything is believing the market is what it was. The market rarely stays the same, and when it shifts, it pays to be ahead of the curve. Sellers who hold onto yesterday will be stuck holding a property and will eventually sell for less-than-ideal terms. Sellers that acknowledge facts and react invariably come out ahead of those that do not.

Market is Good

The market is good for those that market their property correctly and price it correctly. This is nothing new. Hiring an experienced agent matters more in a shifting market than a sideways market. 85% of agents in the business today have never worked in a shifting market. They are learning fast, or getting out of the business.

I talked to several agents that quit this past month. That is a shame, because a 4.2 months supply of homes is not bad at all.  A balanced market is about 5.5 months. 4.2 months seems bad compared to what we had, and it requires a different skill set for agents. A shifting market separates that salesperson from the order takers. Order takers are leaving the business, and salespeople are proving their worth.

Hire a Salesperson

Don’t be afraid to hire a good salesperson. You need that right now. Otherwise, you’ll be stuck holding a property you no longer need or accepting a price you’re not happy with simply because you hired an order taker. They took your order. You told them what you wanted, and they took it. It doesn’t mean they will sell it.

For the best salespeople around, Always Call the Ellis Team at Keller Williams Realty 239-310-6500 Brett and Sande Ellis

Top 10 Buyer Questions

Would you like to know the top 10 buyer questions asked before they submit an offer?  We have them, because we work with buyers every day.  Answering these questions upfront helps keep your deal together and sell your home faster, so keep these questions handy.

Top 10 Buyer Questions Asked

1. How Old is the Roof? Every buyer wants to know the answer to this question. Buyers are trying to figure out what type of maintenance or replacement costs they should expect in the future, and when.
2. What is the Age of the Air Conditioner? Similar to the roof, buyers want to know how old the unit is so they can budget repair or replacement costs.
3. How much is Homeowners Insurance? Buyers want to know how much the home is to insure, and if insurance is readily available.
4. Is Flood Insurance Required? If so. How much is it? Does the seller have an assumable policy? With the new risk ratings, what will be the full risk rate once all price hikes are implemented?
5. Special Assessments? Have there been any and what were they for? Has there been talk of future assessments? Buyers are trying to get a handle on association costs. Cost of ownership affects the price buyers are willing to pay.
6. How Old is the Water Heater? Insurance companies are requiring water heaters to be replaced at 10 years of age, so buyers want to know this answer.
7. What Type of Electrical Panel? Many electrical panels are on the recall list and insurance companies will not insure with a panel on the list. Most home inspectors will tell you if the home you’re looking at is on the list at inspection. The remedy is putting in a new panel which can be costly.
8. Solar Panels- If the home has solar panels, were they installed correctly? Were they financed? Does the seller have enough money to pay off this loan at closing? Loan is not assumable if buyer is getting a mortgage. Solar salespeople erroneously tell people loans are assumable. Sales people also tell homeowners solar will increase the value of your home, but so far we have not found an appraiser that will give solar panels value.
9. What do the HOA/Condo Fees Cover? Is internet included? How about lawn maintenance, water, and sewer? Buyers wish to compare total costs on a variety of properties before deciding.
10. CDD-Does the community have a community development district? If so, what are the fees? How long will these fees last, or are they indefinite?

Time is of the Essence

The longer it takes for a seller to answer these questions, the more it sows doubt in the buyer’s mind. The longer a buyer waits to make an offer the more likely they are to not offer at all and buy another property. Similarly, studies have shown that each day a buyer delays making an offer, their offer price goes down. Answering questions up front helps buyers make faster decisions and removes doubt. Statistically, buyers pay more when they like a home and feel good about their purchase financially.

If you’re afraid buyers will not like something, it’s going to come out eventually anyway. You might as well disclose it upfront when the buyer is most happy about the purchase. When a buyer finds out there is an extra cost later, it becomes a bigger issue, especially if they’ve had even an ounce of buyer’s remorse.

Deal With it on the Front End

Get all the facts out there upfront. Wasting time with the wrong buyer means your not spending time with the right buyer who will accept your home in its entirety. Hiring a Top Agent with years of experience will also increase your chances of keeping your deal together. Experienced agents know how to gather and present facts.

If you’re considering selling, please call Sande or Brett Ellis 239-310-6500. Let our experience guide you. We can help you get Top Dollar and keep your deal together. Or check out www.SWFLHomeValues.com

We’re here to help. Happy Selling!

Also see last week’s article “Listing Agent Interview Questions”

Today we’d like to update you on Lee County single family homes months supply by price range. Lee County Florida currently has 3.81 months supply, which is up from 3.55 months supply on June 1^st This isn’t surprising because we know inventory has been rising all year.

Million Dollar Surprise

What is surprising is that $1 million plus homes have less month’s supply today than it did on June 1^st. This is primarily because there are less homes listed.  Million dollar plus closed sales fell in the last 365 days to 1,107. That is down from 1,128 back in June. However, the number of homes on the market fell to 635, down from 674 in June.  The decrease in homes for sale more than compensated for the decrease is closed sales, thus we saw a drop in monthly supply.

$300,000-$400,000 supply rose from 2.7 to 2.81 months supply. The $400-$600,000 range saw the biggest jump, going from 3.79 months to 4.46 months supply.  All other price ranges were relatively stable.

Expired Listings

On August 1 we saw 62 single family expired listings. This helped bring inventory down to just below end of June numbers. Pending sales fell too in the last month, so we will be watching supply numbers going into August.

Price Reductions

Price reductions stood at 10.22% of the overall single-family market this past week in Lee County. This is down from 10.92% last week, and off from the high of 11.43% back in June. We track price reductions to test motivation of sellers after they list their home, and it doesn’t sell. When we had an increase in pricing sellers were less motivated. Because prices have fallen since last year and sellers see increasing inventory, they have become more motivated. We will continue to track this metric, along with listing inventory and sales velocity.

Attract More Buyers

Knowing the current sales market on a weekly basis allows sellers to attract more buyers for their home. When a home is overpriced, less buyers see the home in person and online because it is not on their radar. Pricing a home on the buyer’s radar is critical to getting the most offers, which leads to a better sales price. Decisions need to be made at the time of listing, and the best way to do that is studying the daily and weekly statistics.

Time on Market

Time on the market is acid to a seller’s final sales price. The longer a home sits the more buyers lose urgency to offer.  The less offers, the less a seller nets at closing. The best time to create urgency for buyers is early in the process, before the market rejects the home’s price. People are afraid to miss out on something they perceive as new and fresh, and a value. When a home sits, buyers feel like other buyers rejected it, so why should I buy it?

Months Supply by Price Range

One thing that is helpful is to compare your list price to the months supply by price range graph.  If you see a large supply of homes in your price range, you know you need to price it competitively. Obvioulsy the best value homes in each price range stand out to the buyers, and those are the homes they choose. This graph will help you determine what your competition looks like when selling.

Program to Fix This Problem

The Ellis Team has a program to fix the time on the market problem. Sellers that utilize this program see their home sell faster and between 8.4% to 12% higher than the MLS average. This has been verified by 6 independent studies. If you are considering selling your home, call the Ellis Team at Keller Williams 239-310-6500. We’ll preview your home and show you how this program is better than what the traditional agent can offer. It doesn’t cost anything to meet with us, but not using us could cost you thousands. Why sell the traditional way when there is a better way that nets you more money and saves you from having your home on the market for months?

Compare this months supply by price range to April 2023 months supply by price range.

Find out what your home is worth online instantly.

Call Brett or Sande today.  We’re here to help.

Happy Home Selling!