New 50% rule modifications benefit Lee County Homeowners by changing the way damage repair is calculated.

In the past, if a property suffered more than 50% of the home’s improved value in total damage the homeowner would be required to rebuild the structure to today’s codes, including new flood and height requirements. This could cause a total rebuild and would be very costly, exceeding flood insurance coverage if the homeowner had any.

New 50% Rule Modifications Benefit Lee County Homeowners

By adopting a Permit-to-Permit mode, each permit must stay within the 50% rule.  So, let’s say a home suffered severe damage and needed several permits to repair the home.  All told, the permits together total well in excess of the 50% of the improved value of the home. By breaking out each permit, the homeowner can file for one permit, complete the work, then close it out.

Each subsequent permit only needs to be within the 50% of the total value, and so on.  The only drawback is you may be forced to do some work, close the permit, and wait for the next portion of the project. This may slow down the project, however the benefit is the home is rebuildable without having to change codes. Sure, the new roof may need to meet new codes, but the elevation and building height could stay the same.

This is a game changer for many residents. So far, this only applies to unincorporated Lee County. If you live in a city like Cape Coral or Fort Myers, you may need to wait and see if they adopt similar language. We find it hard to believe they wouldn’t, but it is the government, so you never know.

FEMA Controls the Flood Insurance Discount

I’m sure FEMA won’t be completely happy, but each entity oversees implementing their own floodplain plan under FEMA. Fort Myers Beach isn’t taking the same approach, and this video explains why.

This past week we have attended two insurance seminars, so we have learned a great deal about insurance after Ian. Of course, insurance is changing weekly. It’s not that the Ellis Team is smarter than other agents about things like insurance, it’s that we talk to more people, so our learning curve is faster. Having connections is valuable, especially after a disaster like Ian.

Having the reputation and clout to get top people on the phone when you call is valuable. We can offer ways to sell a property when others say it cannot be done. There are options to get insurance even when there is an existing claim, and it is challenging.

Here to Help

Our team is here to help. If you’d like to buy or sell, there may be a way.  We are experts at listening to your situation and helping find resources to accomplish your goals. There are some people that are unrealistic with what they are trying to do, and that’s OK. We listen and help where we can. In some cases, the goal is unrealistic today, and then something changes, like the new 50% rule implementation.

Insurance carriers are opening back up, and so are the options. A seller’s ability to get Top Dollar or sell the property at all will be determined by who they hire to sell their home. The same with a buyer. A buyer’s ability to purchase a home will be determined by the agent they choose to work with.

We have a way of searching MLS and finding damaged home or undamaged homes. Knowing inside tips on searching MLS along with keeping up on insurance and building permits enables us to better serve our clients. We don’t know everything, but we are willing to get in there and talk to people and help figure stuff out.

Always call the Ellis team at Keller Williams Realty 239-489-4042 or visit www.SWFLhomevalues.com to get your home’s value instantly, or www.LeeCountyOnline.com to search the MLS.

Good luck and Happy House Hunting!

Expect large interest rate hike at next Federal reserve meeting Sept 21^st.  Inflation numbers were released this week and CPI rose .6% over last month and 8.3% over last year. This number came in hotter than expected and left the Fed little choice in raising rates.

Most experts now say a .75% hike is certain. Some were hoping for a .5% hike, and still other fear 1% hike as a possibility.  Our bet is on the .75%. The bad news is that persistent inflation may lengthen the time before the Fed can begin lowering rates. Many hoped for lower rates next year.

If our government keeps spending money, the Fed will have to keep raising rates. On the one hand rising rates should stifle economic activity while on the other, more spending adds to the money supply we are trying to slow down. We have competing forces instead of both working together to fight inflation.

National Call

We sit on a national call each week of top agents. This week they reported that housing demand had dropped due to higher interest rates. Nationally, inventory stalled. Over 40% of listings had at least 1 price reduction. When that number gets to 45% it is considered bearish. The average is 30% for those that are wondering.

Pending home sales nationally are down 22% year over year. Showing requests are down 41.2% nationally, and closings are down 17%.

Target Rates

The Fed had set a target rate of 2.25% to 2.5% for 2022, but many Fed governors are now saying they may have to raise that rate to 3.5% to even 4%. The 10 Year note typically will follow the target rate because it is longer duration and helps predict what the economy will do after 1-2 years out.  So far, we have seen the 10-year note creeping up. As we write this article on Sept 13^th it sits at 3.432% Remember, 30-year mortgage rates are pegged off of the 10-year note. As we get closer to Sept 21^st and future guidance by the Fed, we expect this target could increase, which could increase the yield on the 10-year note. If that happens, mortgage rates will increase, putting further pressure on stock market and real estate market. We expect large interest rate hike later this week.

We expect the stock market to do better later in the year, but we may have some rocky weeks until then. The real estate market may feel pressure until we get ahead of inflation and start to see the downslide.

Local Statistics

Locally listing inventory has also stalled. Closings are down but pending inventory has also stalled. Demand has been persistent, and if we don’t see a major influx of sellers, we should see stable prices going forward. If more sellers decide to pile on to our inventory numbers, it could lead to modestly lower prices as we do not see demand picking up in a rising rate environment.

New Seller Program

The Ellis Team has a new program designed to get sellers Top Dollar and sell quickly. Call Brett or Sande Ellis for details 239-310-6500. The program is so good it has several patents at the US Trademark Office, and we are pleased to be able to bring this program to our area.

Or, if you’re just curious about your home’s property value, or would like to track it over time, check out www.SWFLhomevalues.com It will be interesting to see how continued rising rates will affect the market.

If you have real estate questions, we’ve got answers. Give us a call. Always Call the Ellis Team at Keller Williams Realty, your local market experts.

The SW Florida 2022 housing market stalls out in many categories. Closed sales and pending sales are down. Let’s take a deeper look at home prices and inventory levels.

2022 Housing Market Stalls

The average price of closed single family home sales in Lee County fell by 4.1% this year. The median price has risen 1.57%. If you look at the graph it is plain to see that home prices have stalled out.

Home and condo inventory levels have also stalled out the past 4 weeks, holding steady around 3,180 homes and 959 condos on the market. Ironically, there has been a direct correlation between the housing inventory levels and closed sale prices.

Inventory levels are a direct result of supply and demand. Sometimes more listings hit the market and the demand is so high the market gobbles them up.  Other times demand is less than supply.  For about four months we saw supply outpacing demand, therefore inventory grew. It not only grew, but it also doubled in a short time period.

Inventory Stalls

Thankfully inventory levels have stalled out, and so has the pricing. Home prices are down from their peaks in June and July. Unofficial numbers we have studied in MLS suggest home prices may have gone up slightly in August. This is unofficial because not all home sales may have been reported as of Sept 6^th, and there could be a few sales outside of our local MLS that could affect the numbers.

Unofficial numbers suggest around 1,130 closings in August. For perspective, July saw 1,168 officially.

At any rate, while an uptick in August, it is not a significant rise. We also caution people not to focus on any given month. We like to look at trends. The trend we are seeing now is that the 2022 housing market stalls out in SW Florida in several categories.

We are returning to a normal market, which is healthy. Of course, nobody knows what will happen with the economy or interest rates going forward. What we do know is this market is very steady. May buyers fear the market is going to go down. We can state the market has already gone down and buyers may have missed it.

Some sellers have missed it too. The question on everyone’s mind is, where do we go from here? Nobody knows for certain, but we can say the market has acted rationally through this transition and there is no reason to believe it won’t again if circumstances change. We don’t have a crisis market. We have a market sensitive to interest rates and economic fluctuations, and that’s a good thing. It means the market is healthy and predictable depending on what economic conditions persist.

New Home Selling Program

The Ellis Team will be rolling out a new program for home sellers. This program is proven to get sellers Top Dollar and their home sold quickly. Stay tuned for details. If you are thinking of selling, you can call Sande or Brett at 239-310-6500 to get on the schedule for this new program. We’ll be happy to view your home and go over the details of the program.

If you’d like to check out your home value, visit www.SWFLhomevalues.com You can track each month whether your home is going up or down in value.

If you have real estate questions, our team is here to help. Always call the Ellis Team at Keller Williams Realty 239-489-4042, the Real Estate Authority in SW Florida!

Home prices have declined recently so we are telling our buyers to marry the house and date the rate. We don’t see major price declines going forward because we have a housing production deficit that has kept supply at bay.

Back in 2005 we had an oversupply of homes. Today we have an undersupply. Rising rates have made homes less affordable than they were 6 months ago but it doesn’t change the fact that we are short on housing inventory. For this reason, we do not see home prices declining off the charts.

The Ellis Team Current Market Index has leveled off the past 4 weeks showing stabilization in the market. For those who do not remember, the Ellis Team Current Market Index accurately predicts the future direction of the real estate market.

We’ve written how real estate is a great hedge against inflation and historically a better investment than the stock market. The sooner people get into a home the quicker that home can start working for them financially. While none of us like the fact that rates have risen, we cannot change that. We can lock-in a home to protect ourselves financially and refinance the home when rates go down later. We need a place to live anyway.

New Program

FNMA predicts that interest rates will average 4.5% next year and fall to about 4.4% in the 2^nd half of the year. We have a program whereby a buyer can purchase a home today from us and refinance later when the rates go down with zero lender fees. This saves the borrower so much money on interest and in closing costs when they refinance.

The Ellis Team at Keller Williams also has a program that will save home buyers closing costs when they purchase and get a mortgage. We can offer that same zero lender fee loan on the purchase.

As inflation goes on the cost of building a new home is not going down. We know the nation has underproduced housing for over a decade. It makes sense to get into a home sooner rather than later, even if the rates are higher today than what they might be next year.

Marry the House and Date the Rate

Find the home you want to marry. It’s yours. You own it.  The rate you can date. We can change that out anytime along the journey. Our team of buyer specialists can help you find a great home. We are still in a seller’s market, so the best homes go fast. Inventory has risen since February, but it has leveled off in recent weeks.

If you’re thinking of selling your home someday you might want to keep track of its value over time. Our Free home valuation tool will tell you your home’s value each month, so you can track it over time. Simply go to www.SWFLhomevalues.com Type in your address and our system will email you the new value each month. Pretty cool!

If you’re thinking of buying, our MLS search website is the Best out there. Go to www.LeeCountyOnline.com and search away. You can even save your search and the system will email you new properties that match your criteria.

Or you can call us at 239-489-4042 and speak with Brett or Sande or a member of our team. We’re not here to sell you anything, only present you with your options.

Good luck, happy shopping, and Happy Labor Day weekend!

Average home prices fell 16.4% from May Peak. Last year home prices fell 10.5% in a similar period April through July. Essentially average home prices fell 5.9% more this year than last year around this time.

Home Prices Fell 16.4% From May

I read a lot of headlines that talk about how home sales have fallen but prices are still going up.  I would argue that home prices are not going up and whoever wrote the headline doesn’t understand our market.

It is true that median home prices are up 16.7% over last year and average home prices are up 17.4%. That doesn’t tell the whole story.  Those are year over year numbers, and they are declining each month because homes are not going up currently. We saw over $100,000 median price gain from September 2021 to April 2022. We saw $188,000 gain in average price from September 2021 to May 2022.  Since April/May it’s been downhill.  We are still up year over year because most of the gains happened from September on.

The real numbers will begin to show in October once official September numbers are released.  From this coming September to April, we will get an excellent idea of how the market is doing. We can already see home prices are down slightly, but to calculate how much of that is from seasonality is hard to do.

What seems absurd is the fact some people believe home prices are still appreciating. Listing inventory has tripled since February, pending sales are down, and closed sales are down. This is not a sign of an appreciating market.  Home buyers know it, and home sellers know it too.  I appreciate the media putting a good spin on the market, but quite frankly we don’t need a good spin.

The market is what it is, and always will be. You cannot spin the market into something it is not. When inventory is rising it means supply is outpacing demand. When inventory is falling it means that buyers are scooping up properties faster than they come on the market.

Simple Law

We have an excellent market, if you price your home fairly and market it aggressively.  This simple law works in all markets, up, down, or sideways. Hire the best Realtor you can find, market the property for full exposure to the largest number of buyers, and price it fairly. I’ve seen sellers miss the best seller’s market we’ve ever seen, and I’ve seen buyers miss out on the best buyer’s market we’ve ever seen.

Buyers and sellers typically miss the market out of greed. The truth is, over just about any 10-year period real estate is a good investment. Don’t get too greedy and you will never miss the market. Sure, real estate can go down in the short term. In the long term, real estate has done well, and even better than the stock market.

Don’t believe everything you read or hear. Consult a local market expert. While we are experts in this market, we would never purport to be an expert in another market. Listening to someone from another state about how to negotiate or price a home locally doesn’t make sense.

Always go deeper than the headline. Sometimes the headline doesn’t match the content of the story. Ask yourself if the data makes sense and seek out numerous opinions if you are unsure. When you hire the best, you tend to get much better results. This is true in any profession.

Always Call the Ellis Team

If you are thinking about selling your SW Florida property, give the Ellis Team a call. We have the knowledge, experience, and marketing muscle to expose your home to the largest audience. 239-310-6500 Find out if your home is going up or down in value online for free!

Good luck and Happy Selling!

Both condo and single-family housing inventory stalls briefly before reaching new highs this past week.  We noticed.  We noticed the last few weeks pending sales increased as interest rates were declining.

Housing Inventory Stalls Briefly Before Reaching New Highs

Since we last posted about rates going under 5%, they have since gone back up to around 5.25% Sure enough, pending sales dropped a little and inventory increased again.  Is this a direct correlation to interest rates? We cannot say for sure, but it is interesting.

We do know that interest rates play a part in affordability. Affordability affects not only what a buyer can pay for a home, but also their emotional outlook on finances in general. We did see some contracts from families trying to get into a certain school zone and that could have played a part as well.

The general consensus is mortgage rates will rise in the short term, although the long-term effect is less clear. Buyers would be better off purchasing sooner than later if possible. Even if you don’t like today’s rate, you might like tomorrows worse. We have a saying “You marry the house and date the rate.”

Marry the House and Date the Rate

Find the home that matches your needs, and you can afford today. Later on, if and when rates come down you can refinance to a lower rate.

Listings that are priced correctly and marketed well are seeing offers. Gone are the days where we see 50 offers on every property. We still have a good market with buyers motivated to buy. Buyers today cannot afford as much as they could 6 months ago. The good news for buyers is the massive price increases have stopped. We are not seeing rapid rise in prices. In fact, home prices have leveled off or declined slightly. It is hard to calculate because this time of year usually brings a slight dip due to seasonality.

The US economy is holding up well. Bear in mind, there are still trillions of dollars floating around out there, so a few interest rate hikes wasn’t going to kill the economy.  Our government just signed a deal for even more money flowing into the economy, so when the Fed pulls back it’s treasury security buybacks it may not hurt as much.

Experience Matters

I just saw a stat from the National Association of Realtors that said 91% of Realtors have not sold a home when interest rates were over 4% and days on market is over 45 days. So many agents in the business today just joined in the last few years and have no experience working in a normal market. It’s no surprise that so many agents are leaving the business.  Last year you couldn’t write offers fast enough.

Today it’s back to knowledge, experience, and marketing muscle. I predict thousands of new agents will get licensed because they don’t know any better. They don’t realize how many agents are leaving because real estate is hard. This business always has room for dedicated people who are willing to work hard and learn. Most agents get into the business for the flexibility, which means the ability to take off.

When you are interviewing agents to buy or sell, make sure they are dedicated to staying in this business, and have the experience working through market shifts. If not, you could end up paying for their inexperience. Their learning becomes your experience.

There is an old saying “What happens when the guy with experience meets the guy with money? The answer is the guy with experience ends up with the money and the guy with the money ends up with the experience.”

The commission you pay is for your agent’s years of experience. Saving money with an inexperienced agent could leave you with the experience and out much more money than what you hoped to save.

Always call the Ellis Team at Keller Williams Realty 239-489-4042. Visit www.LeeCountyOnline.com to search the MLS and www.SWFLhomevalues.com to get your home’s current value.

Good luck and happy selling!

Recent sales numbers suggest local home sale prices under pressure from rising interest rates. Nationally we are seeing price resistance due to rising rates, so we decided to study the local market to see what is happening here.

From the graph we can see both median and average home sale prices topped out around April to May. We must be careful here because there is seasonality to the market, and it is not uncommon to see this in normal years.

Preliminary July numbers show a median sales price in Lee County of $425,000 and an average sales price of $552,596. Keep in mind these numbers were pulled July 26^th and do not incorporate a whole month.  It does give us an indication though of what we have seen the first 26 days of the month.  In June 2022 the media sales price was $449,950 and the average was $587,904.

Home Sale Prices Under Pressure

If these numbers hold up, that’s a big drop from June’s numbers. If true, this would support the cause that rising interest rates may have influenced home sale prices locally as well.

This makes sense because we have seen single family home inventory triple since Feb 15^th.  This tells us supply is outpacing demand. Home prices are fabulous compared to what they were a few years ago if you are a seller, but they may not be what they were back in February.

Pricing for sellers will be critical with home sale prices under pressure from rising interest rates. We are writing this article before the Fed announces its interest rate decision and GDP numbers.  If GDP numbers come out negative for the second quarter, we can safely say the US is in a recession.

We are already seeing layoffs at companies nationwide. We are particularly concerned with potential layoffs in 2023 as that is when we believe the pain of rising interest rates will be most felt.  It is possible that the Fed will raise rates 75 to 100 basis points this week and mortgage rates could drop. If they do it is because the markets are anticipating recession into 2023.

Opportunity for Buyers Right Now

We believe there is a window for home buyers to lock in lower rates. Nobody knows what long term rates a few months from now will be, but mortgage rates have crept down in recent weeks. Mortgage rates are based of the 10-year note, and the 10-year note is lower than the 2-year note. This is what is referred to as an inverted yield curve, and this too is an indicator of a coming recession. Again, we may already be in one now. The question is, what will 2023 bring and how severe could it be?

The good news for buyers is rates have come down and selection of homes on the market has risen. Prices have come down too, and in the coming weeks we can report official numbers to verify what we are seeing.

If you have a property to sell, Always Call the Ellis Team at Keller Williams Realty. 239-310-6500 Marketing and proper pricing right now are key, and many Realtors have only been in the business a few years and do not have the experience in a market like this. Brett and Sande have been through many real estate cycles, so no matter what the future brings us, we know how to handle it.

If you’d like to track your home’s value over time, check out www.SWFLHomevalues.com It’s a neat website that will email you your home’s value each month.

Let’s Talk

We are here to talk. Many times, buyers and sellers have questions, and you need a Realtor with answers based on knowledge, statistics, and experience. This is not the time to hire a newer agent.

Call the name you know, the Ellis Team at Keller Williams Realty. Good luck, and Happy House Hunting!