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!

Let’s analyze home prices nine months after Hurricane Ian. We did this post Hurricane Charley and Hurricane Irma as well.

Official median home prices last September in Lee County were $414,495. Average home prices were $534,035. Official numbers are not out yet for June, so we went into MLS and extracted data that should be close to actual numbers when they are released.

Home Prices Higher After Ian

 Unofficial June 2023 Lee County median price was $449,000. That is an 8.32% gain from September of last year. The average price in Lee County for a single-family home in June was $589,991. That is a 10.48% gain over September last year.

We know that home prices were coming down prior to the hurricane. Rising interest rates surely played a part in that decline. Much like hurricanes Charley and Irma, it doesn’t appear that the hurricane had much influence on home prices. Perhaps the greatest influence was which home sellers decided to sell. While demand has fallen with rising interest rates and insurance costs, it hasn’t gone away. Demand is still there. Sellers must price correctly for sure.

Because there is still demand, we may see lower prices if more lower end homes enter the market, and higher prices if more higher end homes hit the market. Obviously when supply outstrips demand it can lower prices, but through last year inventory was low, and the hurricane didn’t help that.

Rising Inventory

 Today we are seeing much more inventory.  Single family home inventory has almost quadrupled since February of 2022. If inventory keeps rising, we will be entering a balanced market. If you talk to most real estate agents, they will tell you this market feels like a balanced market.

We don’t have 50 offers for every property, but homes don’t sit forever either, if they are priced and marketed correctly.

We are seeing agents leaving the business. At last count 60,000+ agents nationwide have left, and we are expecting hundreds of thousands more. This happens with every shift in the market. So many agents come into the business and work in one part of the market. There are three different markets and how you consult and transact are completely different in each.

Three Markets

 The three markets are a buyer’s market, seller’s market, and a balanced market. Once the market makes a move, it’s very easy to slide through all three, or drift back and forth depending on market conditions. We’ve just gone from a severe seller’s market to a balanced market.  Interest rates are on the rise again. Mortgage rates hit their high for the year this past week and may go higher.

The economy is expected to slow down as rising debt is weighing on consumers. Student loan payments begin in October which will take spending money out of the economy.

For Florida we will be watching to see how many people continue moving to our state. As taxes rise in other states and people continue to move out of cities, where will they go? To date, many have chosen Florida which helped push our prices up. With rising prices, interest rates, and insurance costs it remains to be seen how many and how fast they will continue to relocate here.

It is possible a slowing economy might force people to relocate when they lose jobs up north. Others may simply decide to retire. Whatever happens, you know that we will be studying the numbers. Ellis Team clients always know the trends before other home buyers and sellers because we track the market so closely. We have years of data and analytics.

Search Like a Pro

 To search the MLS like a real estate pro, check out www.LeeCountyOnline.com It has features and data other sites do not have. Of course, Sande and Brett Ellis are here to answer your questions as well. 239-489-4042. Brett and Sande have worked in all three markets multiple times. There is no substitute for experience, hard work, reputation, data, and analytics. That’s what you get when you call the Ellis Team at Keller Williams Realty.

Advanced Negotiating Techniques

Last week we shot a video  utilizing advanced home negotiating techniques which you can find on our YouTube Channel  We also posted the video on our Facebook page at www.facebook.com/ellisteam.

We thought we’d share with you these advanced home negotiating techniques. The best part of the first technique is that it benefits both the buyer and the seller if used properly.

In a shifting market with rising inventory most sellers realize they must be competitive. Reducing the price is one way to get in the game, but what if there is another?

Simultaneously, the reason we have rising inventory is because buyers are struggling to pay higher prices and higher rates at the same time.  Today we’d like to share a concept that will help both.

Permanent Rate Change

Let’s say we have a $500,000 home. Also let’s say we have a buyer putting 20% down and financing $400,000.  The buyer could offer $490,000 to help make their payment a little better.  We ran a scenario last week, and by offering $10,000 less the buyer would save about $72/mo.  Not bad if the seller is willing to participate.  But what if the buyer still does not qualify?  This particular buyer might have to offer $450,000 to qualify. It’s a shame because this buyer loves the home, but the seller won’t come down to $450,000.

Now, let’s take the exact same home and the exact same buyer and look at it a different way. What if the buyer offered the list price of$500,000 but asked the seller to pay closing costs up to $10,000? With that money we buy the rate down from 7.5% with $2,000 in points to 6.25% with around $10,000 in points. By buying the rate down the new payment lowers by $333.99. The buyer qualifies for this payment when they did not qualify for the previous payment.

It is the same $10,000 just used a different way. The results can be enormous. You can watch the entire video online that explains it. Our example only shows the principal and interest portion. Obviously there will be taxes and insurance which varies by property.

Additionally, these numbers change by credit score, amount down, etc. Every buyer and every scenario is different. What stays the same is the concept. Once you understand the concept, we can run scenarios that best help your situation.

2/1 Buydown Option

We looked at a 2/1 buydown, but the day we ran it the permanent buydown was a better deal. A 2/1 buydown lowers the rate by about 2 percent the first year and 1 percent the second year before setting in on the permanent rates the final 28 years.  The buydown is temporary.

There are many more types of loan products we have access to. Keep in mind, we are not lenders. We are real estate agents that understand the process because we’ve worked through several interest rate cycles and have experience. Many new agents have never worked in these conditions, so they don’t have that knowledge to put and keep deals together. It’s a shame, because many times there is a willing buyer and seller, and they just don’t know how to keep it together.

Putting it All Together

The key is working with people with experience and a great team. We work with lenders who have decades of experience. Sometimes all the elements of a great deal are there, and people just need help structuring it to make it work. The days of 50 buyers bidding on every property and paying cash well in excess of the asking price are over. Financed deals are back in play, and this is where experience matters most.

Always call the Ellis Team at Keller Williams Realty 239-489-4042 or visit www.LeeCountyOnline.com to search for your next home. We’ll show you hot to use this and other adnaced home negotiating techniques to work for you.

Advanced Home Negotiating Techniques

New FEMA risk ratings impact on future flood insurance rates is being felt, and some home buyers are astounded. We’ve been pouring through the numbers looking at the areas most impacted.

Most Impacted Zip Codes

New FEMA risk ratings impact will depend on which zip code you live in. Of the zips listed in this chart, 33901 will see most impact at an average rise of 365.58% Next in line looks to be 33921 which is in the Boca Grande area with a 361.99% rise. The third highest is 33920 which is in the Alva area coming in at 318.05%

We have a complete database of each zip code in the United States that shows the average risk rating versus the current average cost of flood insurance.

This does not mean that every policy in the zip code will cost the amount stated. This is an average for the entire zip code. It does, however, give us an across-the-board estimate of how much some policies will rise.  What we fear is that some policies in a zip may be more extreme than others. The extreme policies might be the policies raising the average versus an across-the-board rise.

33919 will rise on average 259.63% and 33907 will rise an average of 235.68%  Zip 33908 which saw heavy flooding will go up 270.10%

Don’t Give Up That Policy

If you have an existing NFIP policy it can only go up 18% per year, so it would take 15 plus years or so to reach some of these levels. If you did not have flood insurance, you cannot go back and get it at the grandfathered rates.

We also tell people when shopping around to be careful about selecting private flood insurance. When you give up the national policy, you give up that protected rate. The danger is a private policy might not renew your policy any given year. Or zones could be reclassified. You might be in flood zone X today and not be required to get flood insurance. Future maps could change that, and you might be required.

If you are required to purchase flood insurance for your mortgage when you previously didn’t have to, you do not get the old rate. Worse yet, you also lose the 18% protection. New policy holders who do not renew or assume an existing policy pay the 100% full rate for the property. We do not see a way around this.

We are not insurance agents, so we cannot give insurance advice. As consumers, we are watching what is happening. As real estate professionals, we always ask home sellers if they have current flood insurance and a copy of the policy. Having an affordable policy that can be assumed can increase their property value compared to a neighbor who has nothing to offer.

Cost Versus Benefit

Many buyers have begun to shy away from high insurance properties unless they can absolutely afford it and are willing to pay the price for paradise.

Any time you add a high cost to something over and above the purchase price, buyers must decide if the amenity is worth it. For instance, some golf communities have high fees, but they offer golf. Other communities offer a marina, etc. The amenity benefit has to exceed the cost in the buyer’s mind. While flood insurance isn’t exactly an amenity, it is a cost associated with living in a particular area and will be evaluated on a cost-reward basis by buyers.

Have Questions?

If you are thinking of selling your SW Florida home, always call Sande or Brett Ellis at 239-310-6500. We can walk you through all the intricacies of a home sale, because we know what to look for upfront.

Many agents list a property without studying all the factors only to be surprised by a cancelled sale later. There is nothing more discouraging than thinking your home is sold only to find out the buyer is backing out over something that could have been known upfront. Flood insurance is one of many factors.

Good luck, and happy home selling. For questions, give us a call.

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!