The Federal Housing Finance Agency House Price Index accumulates data from financed home purchases using Fannie Mae and Freddie Mac as their source. The FHFA HPI shows the Cape Coral Fort Myers housing market as the #2 fastest rising prices year over year, and #1 fastest rising in the past quarter.

In other words, home price appreciation is not slowing down in the Cape Coral Fort Myers housing market. Both cities are lumped into an MSA, so therefore you will see it labeled as Cape Coral Fort Myers housing market.

Florida ranked #5 out of all states, and Florida scored 8 out of the top 28 spots nationwide.

Cape Coral Fort Myers Housing Prices Rising Fastest in Country

 

Why is Florida doing so well? People are attracted to Florida for a variety of reasons. Of course year-round sunshine, moderate temperatures, beaches, golfing, fishing, boating are the usual things you hear about Florida. Lately it is more than that.

In the past 5 years people have been moving to Florida for lower taxes, police protection, remote work, and less mandates. Entire companies have decided to relocate to Florida as well as induvial families and workers.

Is there a Bubble? Prices rise when there is more demand than supply. We do not see demand slowing down anytime soon. In fact, it feels like it is accelerating. Sometimes it takes companies years to make a relocation happen, and some of these have been planned 3-5 years ago and we are just now seeing them come to fruition.

We do not have enough supply. Builders are building as fast as they can, but they cannot keep up. Supply chain issues have only made it worse.  Demand is picking up and supply is getting worse. In this mathematical equation there is only one way for prices to move, and it is up.

Other parts of the country are talking about a slowdown in growth. The key word there is growth. Prices are still rising, just not as fast. In Florida, we have seen an uptick in growth. Everyone that moves to Florida is moving from somewhere else.

We have not even hot season yet, and recently we just opened our borders to Canada. You will notice our roads are a lot busier now too. Demand is accelerating. Supply is not.

Some fear a new Covid variant may damper the economy. It might. Keep in mind when Covid originally hit Florida became popular. If a new variant were to become rampant, who is to say Florida wouldn’t attract even more?

Right now, it seems Florida wins no matter what happens. Can unforeseen circumstances change all this? Sure, anything is possible. All we are saying is the old rules of work and where people want to live have changed, and Covid has sped that thought process up.

If you are a buyer and hesitant to pull the trigger because you hear the market may fall, you might be in for a rude awakening. We do not see any apparent signs today this market is in a bubble, in fact to the contrary.

We have some excellent tools to keep up on the market. Our seller website www.SWFLhomevalues.com gives Free and Fast home value reports. Our buyer website www.LeeCountyOnline.com shows you the latest listings and is updated within minutes.  No more looking at old listing data or missing out on hot new properties.  Our websites are the best in the business and keep you informed in a fast-moving market.

If you are thinking of selling, call Brett or Sande at 239-310-6500 and we’ll be happy to show you how we can get you Top Dollar through our advanced marketing nationwide.

If you are a buyer simply trying to score a property, call our buyer hotline at 239-489-4042 and we will get you a buyer agent fast and on track to getting your next home.

Good luck and Happy real estate shopping!

A recent survey by Realtor.com revealed there are more sellers ready to list their home in 2022 than 2021.  Many sellers were waiting out the pandemic.

Sellers Ready to List Their Home in 2022

Of the sellers ready to make a move in 2022, 65% plan to do so in the next 6 months. Sellers have noticed price gains have slowed which may be prompting the timing in the next 6 months.  More than 1/3 have already researched the value of their home. One of the best places to research the value of your home online is www.SWFLhomevalues.com.  It is not a substitute for an experienced real estate agent or appraisal, but it is one of the best places to start online for Free.

Many Sellers Want Different Features

Many sellers spent more time in the home due to Covid. Last spring, 15% wanted different features in their home. Now that they’ve spent more time in their home, that number has increased to 33%.

Of the sellers planning to list, 42% plan to list for more than they think property is worth. 29% will want a quick closing, so future sellers will have different motivations. Ultimately the market will determine the value, but the seller will set the price.

This was a national survey, and we all know real estate is local. While this may be an indication of how sellers are feeling, what happens in SW Florida may be different.

Best Time Ever to Sell?

We believe now is the best time it has ever been to be a seller. Technically 3 months ago might have been better, but some prices have still drifted upward, and sellers today are no worse off by waiting. 3 to 4 months ago we had more offers per listing, and that drove the price up. You don’t need 25 offers per property today because the price has already been driven up and is not falling. The bidding wars in the past did the dirty work for sellers. Sellers just need enough buyers to maintain what was achieved months ago, and so far, that is the case.

Increasing Demand

Going forward, we see increasing demand. This increased demand may outpace increased supply from sellers which could further drive our market. Many businesses have made the decision to relocate to Florida. Some of these decisions were made in the last few years, and some are being made today.  These relocations take time and do not happen overnight. Someday the rest of the country’s real estate market could cool down while Florida remains hot.

We are astounded at how many buyers are coming in from other states. These are not retirement buyers; they are buyers moving here permanently and working here. They are moving their family here and deciding Florida is not only a nice place to work but also a nice place to live.

Registrations on www.LeeCountyOnline.com have increased. These are people looking for homes. Some are here renting or living with relatives and others are flying here to buy a home to relocate. Having one of the most popular real estate websites in SW Florida allows us to see buyer activity in real-time and witness trends. These national surveys are interesting, and we love to report on them, but they just confirm what we are seeing online.

Sellers Ready to List Their Home

If you own a property in SW Florida and want to know the latest trends in the market, schedule a call with Brett or Sande Ellis at 239-310-6500 We can discuss what we are seeing and how this affects you and your home value.

If you are a buyer, call our home buyer hotline at 239-489-4042 to be connected with a buyer specialist who can help you purchase a property. Our agents are experienced, and experience counts. Unfortunately, we see buyers losing out to other buyers because the agent representing them didn’t have the experience to counsel their buyer on what it takes to write a winning offer. It is not always the highest price offer that wins. Relationships matter too. The Realtor you hire matters now more than ever.

We are here to answer your real estate questions. Good luck, and Happy Selling!

Rivalry Weekend Bet

Is it just me or does it seem like everybody is asking about future home price appreciation rates for SW Florida? Maybe it’s because we are in real estate, but it does seem to be a topic discussed more often.

Future Home Price Appreciation Rates for SW Florida

It is dangerous to predict where the market will go. It tends to go where it wants to regardless of where you want it to or think it should. Zillow recently admitted it cannot predict future home price appreciation rates. If a big company cannot do it, why would anyone think they can?

The truth is nobody can. And yet, all of us have a lot more knowledge than Zillow and could probably do a better job. They tried to analyze home values and future prices on a national scale, and we all know real estate is local. There are some factors in play we have never seen before, so some of the traditional economic truths may not apply 100%.

Positive Factors

The truth is, Florida is desirable to many people across America, like never before. We have always been desirable in terms of sunshine, weather, and no state income tax. Today, it is much more than that.

We are not taking any political stand. All we can do is report what we hear buyers saying.  Buyers moving to Florida feel Governor DeSantis is a rock star and they appreciate the way Florida has handled lockdowns, mandates, and taxes.  I am sure we do not hear from some buyers who would never move here because they disagree, however the net migration into the state speaks for itself.  Going forward, we do not see this changing, and this is a plus for Florida’s housing market.

Florida is open for business and businesses are choosing to move here. We are seeing businesses and work from home families moving to Florida, and this trend should continue as well.

Interest rates are still low. Low rates are good for real estate markets.

Negative Factors

Rates are expected to rise. Rising rates cost the buyer purchasing power, so in a balanced market that eventually effects sellers. We are not in a balanced market or even close to it now.

Vaccine mandates are causing people to lose their jobs.  If the mandates stick in the courts, this could eventually trim the buyer pool as they must live off savings.  Already we are hearing about US savings accounts ballooning $4 Billion during the lockdown and that number is back to even now that stimulus has ended for unemployed in the lockdown.  This should force more to go back to work, and we saw signs of that in the latest jobs report.  If new mandates kick in January 4th, it could change the savings rates.

Inflation is like a hidden tax on consumers.  Many are seeing a rise in paychecks. Those gains are being eaten up by rising gas, food, shipping, housing, automobile, and virtually any other expense you can think of. Inflation is outpacing income.  As companies are forced to raise wages, it increases inflation even more. It is a never-ending cycle that must end, or it will not help the real estate market.

Predicting the Future

As you can see, predicting future home price appreciation rates was never easy, and with new forces in effect it is virtually impossible now.

We see interest rates rising in 2022 so that should be a motivating factor for buyers. We see good things for Florida for the next several years. The jury is still out for the rest of the country. We suspect many markets will do very well while some may lag. If buyers are waiting for home prices to fall off a cliff, they might be sorely disappointed. If sellers are waiting for another year of 20-30% price gains, they might be disappointed too.

When you are ready to buy or sell, Always Call Sande or Brett Ellis at the Elis Team at Keller Williams Realty 239-310-6500  Or visit www.SWFLhomevalues.com to find your home’s value, or www.LeeCountyOnline.com to search the MLS like a pro.

Good luck, and Happy buying and selling!

Zillow iBuyer program shutting down due to many factors announced by the company.  The most glaring is they lost $422 million in the 3rd quarter of this year with expected future losses of $240-265 million in losses just from 4th quarter purchases.

Zillow iBuyer Program Shutting

It turns out scaling an iBuying business isn’t easy as easy as they predicted, and mistakes were made.  2/3 of homes listed by Zillow are listed at prices below what they paid for the homes they bought.  That is not a sustainable business model.  Realtors have complained that the Zillow Zestimate was not always a good judge of value, and it certainly wasn’t a good judge of future values.

Zillow announced it is laying off 25% of its workforce as a result.  Rich Barton CEO of Zillow commented that an unintended consequence of buying homes directly from buyers was the fact that 90% of buyers turned them down.  It wasn’t a pleasant experience angering customers, and that wasn’t the reason they went into this business.

So, what does Zillow leaving the iBuyer space mean to the rest of the market?  We have seen other companies attempt to duplicate Zillow and go on buying sprees.  With Zillow ending this program, will other iBuyers follow suit?

Locally we have worked with iBuyer companies, and not all of them performed by the contract.  Some have forfeited escrow deposits because they did not comply and refused to close.  As a seller, it is scary to think you go to contract and expect the buyer to perform, only to find out the buyer no longer wants the property because their analytics have changed.

Some sellers were willing to sacrifice price for certainty, and now that certainty is gone, how many sellers will be willing to sell at a reduced price?

Top Dollar Realtors

We always encouraged sellers to check with us before accepting an offer.  The Ellis Team is known as the Top Dollar Realtors, so if you are contemplating a sale with an investor or institutional buyer you want to know how much you are giving up for a quick sale.  The problem was for many sellers, they would go to contract at a certain price.  Investor would come back and change the price due to inspection items.  That signed contract no longer seemed like a good deal anymore.

We believe it is important to talk to us no matter who the buyer is.  Some agents are known for fast sales, but not necessarily Top Dollar.  In this market, you can have both, but you must be a skilled negotiator and smart about it.  Accepting an offer the same day may make some sense in certain situations, and not in others.

Each seller has different needs and objections.  Some want or need a fast sale while other want or need Top Dollar.  Like we said, in this market, both are possible, but it is a constant balancing act in some situations.

The Ellis Team Works Differently Than Most Realtors

Brett and Sande work differently than moist Realtors.  We take a counseling approach.  We seek to understand our clients needs and ask questions.  After learning what is most important to our clients, we can offer suggestions based on what we see happening in the streets.

This approach is not used by all, and certainly not in the iBuyer world.  In the iBuyer world, the buyer is your foe.  They want what you have at the least price they can get it for.  The less they pay the more profit when they flip.

Sande and Brett can guide you through the maze of options and discuss what is best for you.  Additionally, new real estate sales contracts went into effect November 1st, and there are some big changes. Working with a full-time Realtor is important, not only for getting Top Dollar, but for all the changes too.

Zillow made drastic changes to their business model, and they are a multi-billion-dollar company.  Don’t you think you need experts looking out for you in changing times?  Always Call the Ellis team 239-310-6500 to get your home sold fast and for Top Dollar, or visit www.SWFLhomevalues.com  for the most accurate only price estimates.

Good luck, and Happy Selling!

Southwest Florida home sales prices stabilized in the 3rd quarter. Statistically, homes prices were neither increasing nor decreasing to end the quarter.

Home Sales Prices Stabilized

If you look at the graph, Southwest Florida is subject to seasonality in prices, and we are entering a time when home prices traditionally start climbing again. Covid threw a monkey wrench into the term seasonality.  For the past year and a half, it was hard to tell what season is anymore.

Borders Opening Up

Canadians are finally being allowed back in the country starting in November. While we have seen this announced before it has never really happened like they said. More buyers are flocking to Florida from other higher tax states, so it will be interesting to see how this affects demand going forward.

We are also watching inflation, interest rates, and supply chain issues. Home builders may find it difficult going forward to find components to build homes. Nationwide, we have a shortage of homes and Covid did not help builders build enough homes.  Now that we are seeing worsening supply chain issues, you must wonder what affect this will have on new home prices.

Of course, interest rates have been rising and are expected to rise in to 4% in 2022 by the Mortgage Bankers Association. Rates were about 2.75% not long ago. A 1% rise in rates robs a buyer about 11% purchasing power. When buyers can afford less, they don’t have as much money to bid on homes.

We have an influx of buyers flush with cash and large down payments moving to Florida. This is squeezing out some homebuyers from the process, but not necessarily all buyers and sellers are still getting their price. Instead of having 20-50 buyers bidding on each home we may only have 3-10.

Demand Outpaces Inventory Supply

The graph agrees with what we are seeing on the streets.  Many buyers feel like prices went up so much and they feel a correction is right around the corner.  Home buyers may be disappointed because demand is still stronger than supply. Yes, prices may have moderated and stabilized, but it does not mean prices must come down. In fact, Southwest Florida was undervalued for years and may not be more accurately valued.

The real question becomes, how does the national economy play out in the next year? The other important question is, how does Florida look business wise compared to other states? We cannot answer the first question, but we can tell you home buyers are voting with their pocketbooks.  The vote is in, and Florida is attractive enough to pack up everything and move here. We do not see this trend changing. If anything, it may be picking up steam.

Why Buy Now

As you can see, we have some wildcards in play, and if anyone can tell you how things will play out for certain, they are smarter than we are. What we can say is buyers should buy sooner rather than later, because waiting can cost you. We can also say prices may not come down. They could, but they could also increase due to higher costs and not enough supply.

Why Buy Real Estate Now

This truly is one of those rare moments in time where it can cost both buyer and seller to wait. If you’ve been thinking about making a move, now might be your ideal time. Call Brett or Sande Ellis 239-310-6500 and we can talk about your situation.

Or, visit www.SWFLhomevalues.com to find out what your home is worth.  To search the MLS like a professional does, check out www.LeeCountyOnline.com Our site is updated every few minutes, so you are looking at the best data.

 

Good luck and Happy House Hunting!

Home sales fall behind 2020 levels in August for the first time this year.  Is this a sign of a slowing real estate market, or simply lack of inventory?

Home Sales Fall Behind 2020 Levels For First Time

Home Sales Fall Behind 2020 Levels

Last week we reported inventory increased for the fifth straight month.  In February, listing inventory stood at 1.916 homes.  In January listing inventory was 2203.  August listings were on its way up at 1,764.  Perhaps we need inventory levels closer to 2,000 or more to sustain the blistering pace we have seen this past year.

It could also be that inventory is rising, sales are slowing, and buyers have cooled off.  Home prices peaked in April and May and saw a decline.  Funny thing though, median home prices stabilized in June and July while average prices went up slightly in August.

If the market was declining, we would expect to see the trifecta of rising listing inventory, declining sales, and declining prices.  Right now, we have two out of the three, and it is quite possible sales will pick up as inventory increases.

It is also possible rising interest rates will deter some home buyers.  October 1st will bring in flood insurance changes which will raise rates on some.  Rising insurance costs can affect home affordability.

Florida is still a state where people are attracted to.  Some northern states markets have begun to cool a bit while others have not.  It is safe to assume, Florida is an attractive option for many up North which adds to our demand.  As listing inventory increases, we may very well have excess demand to make up for the inventory.

In any market, many homes sell, and some fail to sell because they were overpriced.  When a market begins to shift, you do not want to overprice.  I am not saying our market has shifted or will shift anytime soon.  All markets shift eventually. Proper pricing becomes critical when they do.  To be honest, proper pricing is always critical.  Would you believe that in this great market, some sellers have failed to sell?  It is true, and it happens in all markets, up down, and sideways.

Hire the Right Agent

Hiring the right agent is critical now.  Marketing and negotiating matters more than ever.  Some mistakenly believe they can throw a home on the market, and it will sell.  The truth is it might sell.  The question is, did it sell for as much as it should have or did seller leave money on the table?  There is an art and science to getting what your home is worth.  It takes knowledge, experience, skills, and marketing.  If you thought it was expensive hiring the best agent, just see what it costs you hiring the wrong one.

As we study the market, we will be looking at several key indicators.  Of course, we will watch home prices. We will also watch inventory levels, sales velocity, dollar volume, and bring back and track our current market index which helps predict forward motion of the market.  If you do not know what the Current Market Index is, search for it on our Blog https://blog.topagent.com

If you are interested in selling, call Sande Ellis or Brett Ellis at 239-310-6500 or visit www.SWFLHomevalues.com to find out what your home could be worth.

The market goes up, the market goes down, and sometimes it just goes sideways.  Do not let the market dictate your decisions.  Talk to the Best and get your questions answered.

The Ellis Team has been voted the Best in Real Estate for 7 straight years in the News Press Readers poll.  We thank all our past and future customers.  We look forward to helping you buy or sell your next SW Florida property.

Ellis Team Weekend Open Houses

Saturday Open House 12-3 PM

 Open House Sunday 12-3 PM

Open House Sunday 12-3 PM

We are studying preliminary sales numbers for August from MLS. The numbers suggest a soft landing for sales prices in SW Florida.

Soft Landing For Sales Prices
Soft landing for Sales in SW Florida Real Estate Market

Golf courses in Florida are mostly flat because much of Florida’s terrain is flat. Up North, many golf courses have elevated greens and greens that are downhill.  This past year our local real estate market felt like buyers were having to hit elevated shots to an elevated green to get their offer accepted.

Golfers know that for every elevated green there may be future shots to a downhill green.  Buyers have the same assumptions as golfers.  They believe what goes up must come down.

Soft Landing for Sales Prices

The reality is, the elevated green is the new level playing field.  While we will still have multiple offers on properties due to low inventory, we don’t believe the overall market is going to climb like it did this past year.  In fact, we are already seeing in the numbers a leveling off.  This is a trend that has been happening for about 3 months, but because it doesn’t feel like a flattening market, sellers and agents have not recognized it.

If you speak with real estate agents lately, they will tell you the market has cooled in the last few weeks.  The market has not cooled, it has leveled. When sellers bring a property to market correctly priced, there are many buyers.  When a property enters the market overpriced, we don’t have 50 buyers jumping at opportunity to bid on it.

Diminishing Price Increases

We saw 36% price increases year over year, but as we enter future months those will begin to diminish as prices have stopped rising.  We will still see year over year gains until one of two things happen.  As prices are stagnant, we will either run out of months and stats will show a leveling or the market will move once again.

If the market does not make a move, you will see prices staying the same.  We are already seeing this in the month over month prices.  Unofficial numbers for August show an average sales price of $466,281 and a median sales price of $365,000.  July 2021 official numbers showed an average sales price of $469,072 and a median sales price of $360,000.  In essence, the average price went down about $3,000 and median price went up about $5,000.  Keep in mind, these are still unofficial numbers.  There could be more sales reported from MLS participants from other boards throughout the state.

These numbers are believable though because we have been seeing this trend. Prices since April and May have leveled off.  Some is seasonal, and some is buyers have maxed out.

Sellers Should Sell Now

Listing inventory has leveled.  It’s not going up or down.  We are telling sellers now may be the time to sell. There is not much advantage in waiting now. We have low inventory.  Prices have stalled.  Interest rates are expected to climb when the Fed ends tapering.  This will put pressure on buyers and further cap future gains.  It just feels like this market is now fully valued unless something changes.

For years we said Florida was undervalued.  Today, it might be fairly valued.  We are not expecting prices to vary wildly.  We believe we are in a trading range.

Buyers should take advantage before rates rise and sellers should take advantage of the new normal in pricing.  Both sides can do well if they do not get greedy.  Waiting for a better opportunity tomorrow just doesn’t sound like the best plan.

If you’d like to talk about the market, call Sande or Brett Ellis 239-310-6500 or visit www.SWFLHomevalues.com to track your home’s value monthly.

Always call the Ellis Team at Keller Williams Realty.  We are here to help!

While analyzing current market statistics we see September inventory levels rise slightly in select price ranges.  Six out of nine price ranges saw an increase in the month’s supply of inventory while five of nine saw an increase in the raw number of listings.

September Inventory Levels Rise Slightly

September Inventory Levels Rise

 

Four out of nine price ranges saw an increase in the number of sales.  In a hot market, you can only sell what you have.  As prices increased, some homes graduated to the next price level which increased their inventory, and increased chances of a sale in that price range.

With multiple offers, sometimes we would see a listing in one price range result in a sale in a higher price range because it sold over asking price.  For this reason, we must be careful about analyzing the numbers and interpreting what they really mean.

Inventory Still Historically Low

The overall market still stands at less than 1 month supply, which is low.  A buyer can assume any listing in any of the price ranges could be receiving multiple offers if they were priced correctly coming to the market.  There are some overpriced listings, and no matter how hot the market is, may never sell.

As more listings enter the market, buyers have slightly more choices.  The good ones still get swallowed up fast.  It is important for buyers to have their ducks in a row before they go shopping.

We monitor the monthly numbers, and we are studying the weekly numbers.  We saw a 9-home decrease in the weekly numbers which means more homes came off the market than went on in the last week.  Because this market is so hot, we expect volatility in those weekly numbers.  It could also be sellers were waiting until after Labor Day to place their home on the market while buyers did not wait.

Interest rates rose slightly in the past week.  Rising rates increase the cost of borrowing for buyers.  Initially rising rates adds motivation to buyers to purchase before rates go higher.  This assumes buyers were sitting on the fence.  In our current market it is more likely buyers could not find a home as the winning bid, so they settled for a rental for another year.

Rents are sky high currently. As tenants come off lease we expect them to look to purchase if they can find a home.  As the eviction moratorium abates, we expect rent prices could come down.

Eventually rising rates will hurt home buyers.  The wildcard will be if home buyers soften due to rising borrowing costs, how does northern buyers relocating here compensate for that?  This past year financed buyers were not winning many bids anyway so rising rates would have made no difference.  If buyers continue their march to Florida, rising rates might not matter.  We will keep our eye on migration patterns.

Is Now a Good Time to Sell?

Many homeowners are contemplating if now might be the time to sell.  Prices have risen a good amount, and some are surprised at how much their property is worth.  Homeowners also realize we are not likely to see price gains like this going forward.  Nobody knows the future and where prices will go. We think it is safe to say prices will not rise 36% in one year again anytime soon.

If you have been wondering if now might be the time to sell, call Brett or Sande Ellis at 239-310-6500 We will be happy to speak with you and discuss your options.  Some sellers appreciate our Free and easy home valuation tool where you can see your home’s value online instantly.  The system will also email you updates every month so you can track your home’s value going forward.  This is great for people who do not want to sell now but are interested in their home’s value.

Good luck and Happy Home Buying and Selling!

See last week’s article “Local Home Sales Highest on Record

Recent statistics show local home sales highest on record.  Keller Williams Realty International predicts 2021 will be the 5th best year in real estate sales nationally just behind 2020 levels.

Local Home Sales Highest on Recrod

Locally we are seeing a slowdown in the number of homes closed.  The tail end of this year could bring fewer transactions, but will the slowdown be enough to place us behind 2020 numbers?  Through July home sales are up 38.33%. We only need 4,328 sales from August through December to match 2020 levels.  That is approximately 866 homes per month.  Our lowest month of the year was January at 1,221 homes sold, so it is likely 2021 will set another record.

Local Home Sales Highest on Record

The frenzied pace of home sales has eased a bit, but many homes are still receiving multiple offers, especially if they are in good condition.  As companies return to work Florida may not be the work from home darling it once was.  However, it remains to be seen what effect the Delta variant will have on companies work from home policies going forward.

We are hearing cases in Florida have leveled off and cases up North may be increasing.  If this continues, Florida may become the work from home darling location again.

This is good news for home buyers.  Buyers will have more choices and less price increases to contend with.  Rising interest rates are like a hidden price increase because it increases the cost of ownership.  We would suggest buyers take advantage of any home they like because even if prices level off that home may cost them more in the future.

Sellers Beware

Sellers should beware.  If the SW Florida real estate market is properly valued, rising rates will have a negative effect on buyers.  For years we felt Florida real estate was undervalued.  With recent price increases, Florida has come more in line with the rest of the country.  Who is to say if we are properly valued or not?  The point is, it feels like values may bounce around where they are now, but who knows.  Rising rates will put pressure on buyers who need to finance.

This past year sellers have been blessed by cash buyers from up North.  We will be tracking cash sales going forward as that will be an indicator of how much fuel there is for rising prices going forward.

Covid Declining in Florida

The good news for Florida is that Covid cases have begun declining.  They are much too high right now, so we are glad to see a plateau.  As the weather turns and Floridians go outside in the Fall, northerners will head inside more in the Fall and Winter.  We may see a decline in cases in Florida and a rise in cases up North.  If this scenario plays out, we could repeat this past year’s process all over again and Florida could become the darling.

As regular readers know, there are several wildcards we look for.  I feel like this year we are tracking new wildcards.  I don’t know of anybody who can say with any certainty what the future of real estate is for SW Florida.  We will continue to report what we do know with facts.  We make assumptions and educated guesses from these facts and we hope you appreciate our attempt to explain what we are seeing in the trenches.

Our guesses may turn out to be 100% correct, or 100% false, or somewhere in between.  Perhaps we are looking at the wrong indicators.

Real Estate Questions?

If you have real estate questions, or would simply like to talk about your situation, call Sande or Brett Ellis 239-310-6500  You can also visit www.SWFLhomevalues.com to get your home’s online value.  Not only is it fairly accurate, but it will also keep you updated as to your home’s price direction.  In other words, even if you disagree with the computer’s price estimate, you will be able to track the direction of your home’s value monthly.  Sellers really like this feature.

Brett or Sande can get you a more accurate price for your home when we meet.

Good luck and Happy Selling!

See last week’s article “Lee County Sales Prices Hit Pause in July

If you look at the graph it would appear that real estate prices leveled off the past few months.  Is that really the case?

Real Estate Prices Leveled

Median and average prices are up 36% in June over 2020.  That is a huge gain and expecting future gains like this is not sustainable.  Let’s dive into 3 key price components to get an idea on where this market is headed.

  1. Most of the price gains you see reported monthly have already occurred. For instance, May’s numbers were up 38.7% over last year. June’s numbers are a continuation of those gains that have occurred because they are year over year, not month over month.
  2. It is not uncommon for prices to adjust backward month over month in June. Traditionally April and May are the biggest price months and prices slip back in summer. It is the seasonality of the market as to when higher priced homes sell in SW Florida.  This graph doesn’t go far enough back to show this.
  3. Listings are on the uptick even though we are still too low. Listing inventory peaked in February 2019 and has been on a steady decline since then. Typically, inventory does not pick up in April, May, and June, but it has this year. Is the increasing inventory enough to make a dent in this market? Not yet, it is still way too low.

So, what can we take from all of this? Prices can continue to gain going forward, but not at the 30% plus rate.  Future price gains depend on listing inventory, interest rates, the economy, and northern states buyers continuing to see Florida as a better alternative to where they are now. We doubt real estate prices leveled off, but gains will be more moderate going forward.

Inventory is Rising

Listing inventory is rising.  Home inventory does not usually rise this time of year, however Covid may have influenced timing is seller’s decisions. Many sellers were prevented from coming to Florida to get their home ready.  Others did not want to sell while they occupied the home during a pandemic.  It is possible Covid put off some sales decisions and altered the timing of when listings hit the market.

June 2021 Listing Inventory Levels

Inventory levels will be something we watch going forward.  It is quite possible all the typical historical seasonality and trends will be off until the economy and real estate market rebalances itself.

Is Now the Time to Sell? 

If you are a seller, now is a good time to sell.  Inventory is rising but not to an extent that will hurt home sellers.  We are still seeing multiple offers on properties.  Buyers still outnumber sellers.  Sellers hold the advantage right now, and it is always more fun to sell when you have the advantage.  When buyers hold the advantage, they do not care about how much you want or need for the home.

Buyers today are not in competition with the seller.  They are in competition with other buyers for the home they want.  When the market turns, the seller will be in competition with other sellers.  Right now, sellers have little competition.

After the Fall, season will be here before we know it.  We do not know what the Covid landscape will look like, which states will be open, or if we will have Covid issues at all.  Right now, we do, and the economy may tighten down again.

We are writing this article before the Fed releases comments from their July meeting.  How the markets react to these comments and the future of interest rates could impact the stock and real estate markets.

If you have contemplated selling, call Brett or Sande Ellis 239-310-6500 and get the facts.  Home prices are going up, but for how long?  If you just want a quick home price for your home, go to www.SWFLhomevaules.com Our online value system will give you a good estimate of your home’s value, and it will email you every month the price changes.  Even if you don’t agree with the actual estimate, you will be able to see which direction the market is moving for your home.

Don’t Settle for Appraised Value

Of course, Sande and Brett Ellis will be happy to visit your home and give you a more detailed value for your home if you would like.  We can show you how our marketing is getting sellers more than the price estimates of their home and how we generate multiple buyers.  Don’t just sell for appraised value when you can get more in this market.  You need the right Realtor to do this. Brett and Sande have over 30+ years and over 5,000 transactions experience, so we know our stuff.

We look forward to helping you!