Single family home inventory in Lee County is rising. This past week we crossed 4,000 single family homes, and number we haven’t seen since May of 2020.

We expect there to be several expired listings at the end of May which will bring current single family home inventory down.  This has happened each month in 2023. Inevitably inventory rose as more listings came on the market than expired. Perhaps many of the expired listings relisted as well. Each day we are watching new listings exceed pending sales, so we know inventory should keep rising.

Is 2020 the New 2023?

In past articles we’ve mentioned that closed home sales are mirroring 2020. If there is a correlation between the number of closed home sales and the 2020 single family home inventory counts, it could be a clue as to where inventory will head. Back in 2020 we had about 5,500 homes on the market, which was less than the 2019 highs of 7,195. The market was getting good in 2020 as was the economy, just before Covid hit.

Inventory levels took a hit as few wanted to sell during Covid, and builders had a hard time keeping up with demand. Interest rates were low. Now that Covid is in the rear-view mirror mostly, and so are low interest rates, we are returning to normal levels of inventory.

Why is SW Florida Different?

Nationwide there is a shortage of homes on the market because many people with low rates on their home do not want to sell and buy another at a higher rate. Why is the SW Florida market gaining inventory when the rest of the country seems to be losing inventory?

Perhaps it’s the hurricane.  Some people are done with storms and rising insurance costs. It could be that less workers are moving to Florida as employers call them back to work.  This doesn’t make sense because people are still moving to Florida in droves. The last report I saw was that 958 people move to Florida every day. In fact, Florida is the #1 net migration state. More people are moving to Florida than leaving versus any other state in America.

I noticed SW Florida International Airport saw a 23% drop in traffic in March. This makes sense because our beaches were barely open, and we lost so much tourism. There simply weren’t the homes, condos, and hotels to rent in many places like Sanibel Island and Fort Myers Beach. Many Airbnb’s have been damaged as well.

Single Family Home Inventory Rising

This doesn’t exactly explain why inventory is growing in SW Florida while it appears to be dwindling in other areas. SW Florida single family home inventory has almost quadrupled since February 15, 2022. Back then it was 1,071 homes on the market versus almost 4,000 now.

Over the summer we are going to track listing inventory against closed sales to see if 2020 numbers are the standard our market should be judged by, or if this is a blip. Markets rarely stay the same for long, and this could just be a coincidence until our market decides what it wants to do.

2020 wasn’t a bad year before Covid hit. Prices were rising slightly, and inventory was coming down from 2019 levels.

2^nd Half of 2023

Some say the Fed will raise rates again in June, while others are convinced they are done. Many predict mortgage rates may come down by the end of the year. We believe a lot will be decided in the next two months. By then we may have a better handle on how the second half of 2023 will go for the economy and the housing market.

If you have a home to sell, Always Call the Ellis Team at Keller Williams Realty 239-310-6500. We have the best stats and can advise you as to how the market is doing long before others figure it out.

Good luck and Happy Selling!

We’ve been studying net domestic migration trends to help us explain supply and demand for housing in Florida. While demand is down compared to last year, it is still strong enough to equal supply which is keeping housing prices stable.

People Leaving

Reports conflict about which states are losing the most. One prominent news source lists New Jersey as losing the most, while many others suggest New York, Illinois, California, and Michigan.  This could be because some are looking at percentages versus raw numbers, and others are studying data county by county. Suffice it to say, New York, Illinois, and California show up in just about every report we see.

Net Domestic Migration Trends

The other thing we look at is where are these people fleeing to. In most reports, Florida and Texas are the clear winners. We also see North Carolina, South Carolina, Georgia and Idaho.

With all these people moving to Florida, you would think we would have a supply imbalance. Inventory supply in SW Florida is holding steady after gaining in 2022 and early 2023. It is still rising, but minimally now. Pending sales are gaining weekly and meeting the supply.

Stabilized inventory could be a result of lower interest rates. Long term mortgage rates have fallen off their highs. Additionally, we are seeing the migration patterns continuing.

Before Covid

People forget these patterns were in place before Covid. Many think that Covid is what drove people to states like Florida and Texas. This is true. People did move here for the freedom and work from home atmosphere during Covid.  However, after Covid people are continuing to move to Florida for the low crime and low taxes. Not only are we seeing individuals choosing to move here, we are also seeing entire companies relocating to more tax-friendly states.

When a company decides to move it is like a slow-moving train. It takes planning and time to move a company, and these plans can be in the works for years. When a company announces a move today, the plan may have been initiated more than two or three years ago, depending on the size of the company and logistics.

We do not see the trends changing anytime soon. Because Florida is a popular state, and because we have limited housing supply, our prices should remain relatively stable. The people able to make the move in the next few years should do better than those that wait.

Two Reasons

We believe this for two reasons. Prices could keep escalating in Florida. Secondly, when enough people move out of the high-tax states, it leaves less people behind to pick up a larger share of the tax burden. Someday few will want to move to those states because the tax burden will be unbearable, and it could limit their ability to sell their homes at today’s prices. If they cannot sell their homes, some may stay and continue to suffer the high tax burden.

Southwest Florida should continue to do well. As we fill in, we expect more people to begin moving into central Florida and eventually the panhandle. Granted, the weather isn’t as nice as it is in SW Florida, but prices are less, and people may have to make choices if home prices stall up North.

Nationwide, we have housing shortage, so demand is up there with supply. The high tax states could continue to lose residents, and eventually this causes more funding stress, and the need for more taxes. It’s a loop that perpetuates itself, and it may not be good for real estate values in those states.

Bottom Line

Bottom line is Florida is one of the places to be, and the sooner people make the move we think the better off they’ll be for the reasons outlined above. Of course, not everybody can move here at once. We don’t have enough supply and not everyone is in a position job or family wise to make the move at once.

Real estate values in Florida should fare well, even if the economy dips into recession. SW Florida home values have done well coming out of recessions in the past, and we see the demographics setting up nicely shout a recession occur again.

To search for your piece of paradise, check out www.LeeCountyOnline.com where you’ll find some features no other website has. Or call us at 239-489-4042 and we’ll be glad to help.

One question we get frequently is where are real estate prices headed, North or South? Buyers want to know, and sellers want to know.

The perfect answer is nobody knows for sure, and the market will determine the outcome. A lot of forces are in play that will influence the market. The good news is history and data leave clues. Let’s break down what we know and what history suggests could happen.

Post Hurricane Pricing

Last October we wrote an article entitled Past Hurricane Sales Pricing Data.  We showed the pricing trends after Hurricane Charley and Hurricane Irma. It’s also important to note the economic conditions at those times back in 2004 and 2017. Our conclusion was that neither hurricane impacted prices. The economy itself was a larger determinant of what happened following the hurricane than the actual event was.

As of this date, closed sales are running almost identical to 2020. In other words, closed home sales are running ahead of 2018, the year after Hurricane Irma. Keep in mind after Hurricane Irma our area was plagued with red tide and blue green algae. While we have had red tide in spurts in 2023, we’ve experienced nothing like we did in 2018. Let’s keep our fingers crossed because 2020 wasn’t a bad year for home sales until Covid squashed home sales in April and May. We rebounded nicely after that, and the rest is history for Florida home sales.

Seasonal Peaks

Traditionally median and average home sale prices peak in April or May, depending on which statistic you look at. We have a few more months left to fully evaluate if we can get back to 2022 levels or surpass them. If we do not, it would not be surprising to see home prices lower year over year the rest of the year. We wrote several articles on that in the past.

One trend we have noticed is pending sales have been tracking interest rates. As rates creep up, pending sales have retreated. As we have received reprieves in rates in certain weeks, pending sales pick right back up. Rates have been down the past few weeks; however, we see them creeping up again.

Interest Rates

Wall street is split on whether the Fed is done raising rates. Some say, including Fed chairman Powell, and some Fed governors, they will raise more. Others say the Fed will have to begin lowering rates as soon as this summer.

If you’re confused, you’re not alone. Wall Street doesn’t know either. If history holds true, we will be watching interest rates.  When rates fall below 6%, we could see a resurgence in home buyer activity. If they fall below 5%, we could see prices rise again.

Inventory is Growing

Home inventory has more than doubled in the last year. In fact, our numbers show it tripled. Still, they are low historically speaking, which has helped keep prices up. There would be a lot more listings if sellers were not trapped in their home by low interest rates. So many home sellers would make a move, but they don’t want to give up sub 3% rate on their home.

As the months and years go by, people’s lives change and you will begin to see more homes go on the market. Additionally, when interest rates begin falling, we may see an increase as well. It will be interesting to see how much the demand picks up with falling rates, as well as the supply.

Real Estate Prices Headed North or South?

That mathematical equation will probably determine where home prices go.  If you have a home to sell, you should talk to Brett or Sande about our 8-Day Program that nets sellers thousands more than the traditional way. Simply call us 239-444-8150 to get our price on your home.

Last week I watched a speaker and a quote stood out to me “In uncertain times trust experience.” As I thought about what he said, it made perfect sense.

We don’t control all the circumstances and events that surround us. I believe people get frustrated when they cannot control things they are used to controlling. It is the loss of control, or the feeling of control that causes anxiety.

Control

 The reality is, perhaps we never controlled what we thought we did. What if the best managers are just better at adapting to changes and offering solutions? Everyone loves to have a sense of control. When you have to depend on others to do their job, we must realize that we give up some control.

Most Realtors I know attempt to take control back. We all prefer loans go through the lenders of our choosing because we have a high degree of confidence they will close. The same is true with inspectors, title insurance companies, insurance agents, etc. We deal with people we know because we know they are experienced and know how to do their job.

When an issue arises, we don’t yell at them and tell them to fix it. We work with them to fix it, because we have a high degree of respect and trust for that person. We trust that what they are telling us is a real issue, because they have knowledge and experience. We also trust that together we can find a way to overcome the issue and resolve it.

The bottom line is, we control what we can and trust others to help us. Agents with experience learn to do their job better than all other agents, and have the wisdom and experience to trust professionals with a proven track record to help in areas we cannot. The wisdom comes in knowing what we are capable of, and knowing who the best people are for the things we cannot.

Stay in Your Lane

 For instance, a good real estate agent shouldn’t be giving legal or tax advice. That should be reserved for the lawyers and accountants. A good real estate agent should know who some good lawyers and accountants are and be able to give recommendations. The same is true for architects, appraisers, inspectors, title companies, insurance, lenders. pest control, roofers, etc. Nobody can do it all, nor should they.

Experienced agents have been here before.  The Ellis Team has already worked through banking, insurance, housing, lending crises. While we didn’t always have all the answers the first time, we found them through hard work and talking with the right people. Crisis comes and goes. In uncertain times trust experience, and nobody is more experienced than the Ellis Team.  Brett and Sande have worked through many real estate cycles and know how to handle a good crisis. Sometimes it’s because we have experience in that issue. Other times, it’s a new crisis, and we have experience dealing with new issues.

Experience Develops Process

 The issue itself isn’t always the problem. The process of overcoming a problem is the answer, and experienced agents know how to overcome problems, new and old.

Have you ever watched someone make more of a problem than it really is? That’s typically because they don’t know how to tackle the issue.  It takes a certain set of skills and experience to overcome an issue. In the end, issues are just issues. We make them go away because we overcome them, somehow, some way, whenever possible. Sometimes it’s knowing what questions to ask, or who to ask. Other times it’s not panicking. Inexperienced people panic.

Experience Matters

 When there is a horrible crash, you want an experienced surgeon in the ER who has been there before. They don’t panic. They find solutions, even if they’ve never treated a stop sign sticking through a human leg. The same is true in real estate. Perhaps we’ve never had a person’s title stolen 3 days before closing. We will find a resource that can help our client.

Bottom line: In uncertain times trust experience. They can get you out of crisis, or steer you clear of crisis in the first place, because they’ve either been there before, or know the process of tackling the issue.

Always call the Ellis Team at Keller Williams Realty 239-310-6500 Put our experience to work for you!

The Ellis Team has created a new online home value analysis tool that allows us to track your home’s value over time from many of the online valuation sites. While these sites cannot be relied upon as 100% accurate, they do give us some insights.

Watch the Direction

Perhaps more important than the value it places upon your property is the direction of the market. Is the market going up or down for your property?  Most sellers want to know how the market is doing for their home.

Because we have premium access to many of the online valuation sites, we are able to log into the major sites and enter the data into a spreadsheet.  We then email you the results based upon the schedule we have for you. Here is a sample of what the report looks like.

We have  ****** out the various services here but they will be shown on your actual report. The computers will never be as accurate as we are as they have never been in your home and studied the condition of your home or evaluated some of the improvements the computer may not know about. You can always receive our home value analysis at www.SWFLhomevalues.com  Read below on how to get all the home value estimates and track over time.

Appraisers Being Replaced?

We are hearing that many of the lenders are going to online valuations versus actual appraisals in many instances, so knowing what the computers think is important. Personally, we believe there will always be a need for appraisers but lenders are rethinking that in some cases.

As interest rates were rising in 2022, we noticed median and average home values began to fall. The computers were delayed and were still showing price increases. Perhaps the specific homes we were checking on were still rising. Or perhaps the computers took time to pick up on the price declines. In the last month or so we have noticed the computers picking up on price changes.

This is why we say computers may not be as good as we are are at studying the market, but they are important to watch.

Online Home Value Analysis Tool Schedule

Compiling the data is a bit of work for us, so we want to prioritize those that need it most. We will perform this service free of charge for you based upon the following schedule.

If your circumstances change, you can always let us know and we can adjust the schedule.  Please call us at 239-310-6500 or email Brett at Brett@Topagent.com with your property address, email address and time frame and we will get you on the schedule!

Should I Sell Now?

Many sellers want to stay in their home as long as possible especially when prices are still rising. Some owners want to capture the equity they have built up in recent years. Nobody wants to sell when prices are still rising, unless they area fearful the market has neared its top. Sometimes values in a spreadsheet over time helps sellers identify trends and confirm their feelings on prices.

Brett and Sande Ellis would be happy to discuss your situation and help you decide if now is the right time for you to sell. We’ll look at where you would go, how much you would net at closing, and look at all your options. We are not high pressure.

If selling is the right option for you, we have a program to sell your home in 8 days, so you’re not caught chasing the market. Call us at 239-310-6500 and we’ll discuss your options.

Good luck, and Happy Selling!

Big Mortgage Changes Coming

RV Alert

Our Review of the Liquid Springs Suspension System on a new 2023 Fleetwood Southwind 37F

We’ll write a future blog post about the Liquid Springs soon for our RV’ers who may be interested.