Reflection Lakes Archives - Page 2 of 26 - Fort Myers Real Estate and Homes For Sale

Today we want to provide a creative financing scam update to our May story “Creative Financing Red Flag Alert”.

Since May creative financing offers have increased in frequency, and they’ve become more creative. Additionally, after presenting their offer the callers have become more tenacious and downright combative with the listing agent.

More Creative

Since we wrote about how the “Subject To” can violate your lenders Due on Sale Clause, investors have changed the way they present their offers. One investor is hyping their offer as no risk because it is not “Subject To” at all but rather wrapping the mortgage to give the seller full protection. Whether you wrap a mortgage or not, it still may violate the original terms of the loan.

Furthermore, a seller is still reliant on the investor making the payment. If the investor does not make the payment, the seller may have no recourse to get their home back and be obligated to make the full payment of the loan. In a wrap-around mortgage, it’s possible for recourse to be created, but a seller might have to go through a lengthy legal process all the while mortgage payments need to be made. If the investor placed a tenant, the seller would have to abide by those terms as well.

Legal Advice

We would highly recommend a seller speak with an attorney before accepting any kind of creative financing offer. If they tell you you’re off the hook when you sell to them, look harder. Accepting a creative financing offer may prevent you from purchasing another home because you still have a loan in your name. They don’t tell you that, or they sometimes mislead about this fact.

The Ellis Team is looking into adding language into the listing agreement such that we have authority to reject creative financing offers for our sellers.

Agents Beware

These investor groups are so skilled and convincing that we’re afraid inexperienced agents, and perhaps some experienced agents may fall for some of the claims made over the phone, and in emails.

We have had sellers call their attorney and their lender. In each case, they were told not to engage in the offer before them.

I’ve even had investors point out that it is my duty to present all offers, and question why I wouldn’t want what is best for the seller?

Creative Financing Scam Update

As a service to the community, I will post screenshots of the written correspondence on our Blog. I invite attorneys and lenders to comment on the language. I will take out the address of the property and the names of the sender. It is our hope that you will begin to get a feel for what is happening out there. Please seek your own legal advice. We are not attorneys and are not offering legal advice in any way. We are simply informing you about a topic you might want to investigate before taking action should this happen to you.

Considering Selling?

Please call Brett Ellis or Sande Ellis 239-310-6500 at Keller Williams Realty. We can answer your questions and guide you through the real estate maze. Changes are everywhere, and you need an experienced agent to guide you through the process. Or get your home’s value for Free at www.SWFLhomevalues.com

Good luck, and Happy Selling!

Creative Financing Ehibits to View

The following are actual emails or offers we’ve received for you to view. We have blamked out who sent them and the property to protect privacy.

Creative Financing Exhbit 1

Creative Financing Exhibit 2

Creative Financing Exhibit 3

Creative Financing Exhibit 4

Creative Financing Exhibit 5

If for any reason you cannot open these links, leave a comment and I will find another way to share them. We are using Google Drive to share, but not sure if we can share outside of our organization

Single family home seller price reductions average 3.21% since June. This past week they averaged 2.88% while the week prior averaged 3.65%

We also track how many homeowners are reducing their price each week. Last week we had 483 reductions compared to 604 the week before. The week of April 16^th was the highest with 911 single family homes in Lee County reducing their price.

Data

What does all this data mean? With approximately 6 or months supply of homes on the market, depending on price range, more homes are coming to the market than selling. Homeowners are competing against other sellers for the best buyers. If a seller brings their property to market at a price the market accepts, it should sell. If the market rejects the price, sellers are choosing to adjust to the market because they wish to sell rather than keep their home.

Of course, some sellers would rather keep their home if they don’t get a price they want. That’s a nice position to be in. However, sometimes keeping a home and watching the prices go down can be disheartening, even for those that don’t have to sell.

Stock Market

Take the stock market for instance. Most people who have retirement accounts don’t need to sell. They’re investing for the long haul. Just the same, people don’t like investing in stocks that aren’t performing to their needs. In these cases, people typically sell and adjust their portfolio with investments they believe better suits their needs. They don’t need to sell, but they choose to sell and invest in something else.

Homeowners should not sell just because their home value is going down. Holding onto a property that no longer serves your needs does not always make sense either. Some people hold onto a property they no longer want until its value goes back up to a desired level. However, the property they would replace the underperforming property with might also go up, wiping out any advantage of holding a property that no longer suits their needs.

Emotional Decision

Real estate more than stocks becomes an emotional investment. People live in houses and build memories, so selling isn’t as easy as unloading a stock because of the emotional ties. It’s easier to make a business decision with stocks at times than it is with real estate.

Real estate has advantages though, because unlike a stock, you can live in a home or rent it out. If the price drops, you can choose to stay in the home, especially if you cannot afford to sell. Some people wouldn’t qualify for a new mortgage, so it’s wise to stay where they are until their financial situation changes.

Consult with a Professional

The Ellis Team at Keller Williams Realty have consulted with thousands of homeowners over the years. We can help you evaluate your options from an objective level and point out the pros and cons of making a move. We have resources that may help you and may think of things you haven’t considered. Our job is not to sell you but work with you to find a solution that makes sense for your family, even if that means staying for a while.

Give Sande Ellis or Brett Ellis a call 239-310-6500 and let’s talk. If you do decide to sell, we can help you decide on a pricing strategy. Our marketing plan is fantastic, and our family working with your family is a winning team! Or track your home value online at www.SWFLhomevalues.com. We’ll keep tracking the seller price reductions average and monitor when this number changes significantly, hopefully for the better.

Good luck, and Happy Selling!

Ellis Team Weekend Open Houses

Open House Sunday 12-3 PM

4768 Crested Eagle Ln Fort Myers, FL

Open House Sunday 12-3 PM

2304 NE 13th Ave Cape Coral, FL

The Ellis Team is projecting home closing activity in Lee County to be somewhere in the vicinity of 14,109 for 2024. You might ask, how did you pick that number? Was it a wild guess?

Without boring you with a complex mathematical computation, basically we compared year to date sales with previous years and extrapolated a percentage of where we are this year compared to previous years. We then looked at averages and compared economic climates for those years and did our best to make a prediction.

Projecting Home Closing Activity

There is absolutely no way our number will be correct. However, if it is even close, 2024 would be the 7^th best year on record, and the 4^th best year on the chart.

We hear agents saying how dead the market is, and nothing is selling. Statistically that’s not true. It may seem like nothing is selling if you have listings that are not selling. Through July more homes have closed in 2024 than 2023. I can already track through MLS about as many closings for August and we know not all sales are in yet.

Economy

We do know the economy is slowing down, and high interest rates are having their effect on buyers. However, we are expecting interest rates to begin declining starting this month. In fact, the mortgage markets already have begun their decline. Add in sellers buying rates down for buyers and there is light for home sales to remain steady.

Election

We have heard many buyers say they are waiting for the election. Somebody is going to get elected, and people are still going to need housing after the election. If you live in Washington DC, I could see why the election outcome might make a difference. For the rest of America, we either need housing or we don’t.

I could also see where some people could be concerned about their job going forward. Perhaps one candidate is more favorable to certain industries versus the other. Consumer confidence makes a difference, I get it.

It’s kind of like all those celebrities that promise to move to another country if so and so gets elected. They never do. I believe most people make a housing decision after the election about the same as they would have before the election. For some reason they just feel more in control. Buying a home is scary, and people like to feel in control. Even though we have the right to vote, that whole election thing feels out of control for most people, so they use it as an excuse to delay a decision.

Affordability

In the end, home sales and pricing come down to affordability. Affordability is determined by the price of the house, plus HOA fees, taxes, and insurance, financing costs, and anticipated maintenance. Home sales have slowed from better years because affordability has slipped. If real wages were to rise, inflation cools, or insurance costs abate, this would help affordability. Absent any of those, affordability must come from seller’s home prices, which is what we’ve seen the past few years.

Selling

If you’re selling in today’s market, who you hire matters. Marketing and experience matter. Always call Brett Ellis or Sande Ellis 239-310-6500 for the best advice in today’s market. Our marketing can work for you. Or visit www.SWFLhomevalues.com for your home’s instant home value. Our system will even track your home’s value each month and send you a comprehensive report on your area.

Good luck and Happy Selling!

Ellis Team Weekend Open Houses

Open House Sunday 12-3 PM

2304 NE 13th Ave Cape Coral, FL

Open House Sunday 12-3 PM

1417 NE 10th Ln Cape Coral, FL

If you’ve been following our column, you’ll know that we’ve been writing about housing inventory levels falling since April. After more research we learned about rentals affecting housing resale inventory supply.

According to a leading rental agent, rent prices have been down 35% in the last three months. He mentioned there are 176 single family homes in Cape Coral alone that came on the rental market. Because he has conversations with his clients, I asked him what is driving the rush to rent their homes.

Rentals Affecting Housing Resale Inventory Supply

The rental agent said many have tried to sell their home and could not, or just do not like the resale prices today, so they’ve decided to rent instead. This caused a rush of rental homes to enter the market, and some are still asking for 3 month ago rental prices.

Like the resale market, rentals are price sensitive. Whether you are renting or selling, you must price your home according to market conditions. For those that choose the correct rental price, those homes are rented within four to six weeks. For those owners that overprice their rental, it’s taking three to four months to rent their home. Presumably it takes longer for the owner to realize they are overpriced, and they eventually reduce rent until it rents. Our conversation didn’t get that far, but why else would it rent for more down the road?

Rent Vs Sell

There are three reasons why a homeowner would rent versus selling. First, they emotionally want what their home used to be worth and decide to wait until the market recovers to that point. Secondly, they may owe more on the home and need to wait until market recovers to pay off the loan. Third, they may decide it’s a good investment and would like to keep it. Perhaps they have a low interest rate and can afford to keep it until rates fall again.

We may never see rates get below 3% again. If they do approach sub 4% it probably means the economy isn’t doing well and the Fed is trying to pump the economy. If this scenario occurs, home prices wouldn’t be doing well.

Economic Projections

We just sat through an economic projection of three possible scenarios. The first was no recession, the second scenario was a normal recession, and the last scenario was a banking recession. Let’s pray for no recession or or a mild one because the outlook for home prices and sales time isn’t pretty if we hit a normal recession or banking recession.

Buyers and sellers should prepare for rates to come down, but it will take awhile, and real estate will lag while they do. Recovery will be slow. If we enter a normal recession, home prices could be stalled or fall for 3+ years. And if we enter a banking recession, unemployment would rise dramatically and the economy could get ugly. We last saw this scenario in the Great Recession and savings and loan crisis.

The difference is today our country is in so much more debt than we were in 2006. Latest odds have the US entering a recession at about 70%. The definition of a recession is negative growth for two straight quarters, so we won’t know we’re in one until 6 months in.

Bottom Line

Real estate is moving, if it’s priced correctly. Those rentals will come back on the resale market one day, adding to inventory. For now, it might be a good time to sell while inventory is down. Of course, when all those rentals come back on the market, interest rates might be lower and maybe there will be more buyer demand to offset the increased supply.

We’ll keep watching the market for you. Always call Sande or Brett Ellis 239-310-6500 with your real estate questions or visit www.swflhomevalues.com to get your home’s price.

Good luck, and Happy Home Selling!

Ellis Team Weekend Open Houses

Reduced home inventory supply is indeed good news for home sellers in Lee County. The overall monthly supply of homes on the market decreased from 5.67 months in June down to 5.39 months currently.

Price Ranges

Every single price range decreased except for the under $300,000 market. Even though closed sales are falling in some of the price ranges, they are being made up for in others. Perhaps the largest reason for the drop in housing supply is because sellers simply aren’t selling in the quantity they were back in June.

We have 302 less listings on the market right now. There was an increase in sold closings of 31 homes. This tells us that the drop in inventory levels has more to do with sellers taking their home off the market or less sellers deciding to bring their home to market. The decrease in home listings was not due to a drastic increase in closings.

Interest Rates

Interest rates are falling. It’s hard to get a feel for what they are officially because everyone quotes from a different base. For instance, Freddie Mac is reporting rates nationwide at 6.73%. This was last week’s rate to be fair. Other sources are quoting below 6% online, but there could be some points or closing fees involved to equalize the rate. Suffice it to say, rates have fallen, and they could fall more as the economy deteriorates.

Double Edged Sword

Sellers have been hoping for falling rates so more people can afford to pay a higher sales price on their home. The double-edged sword is that many are losing their jobs and businesses are cutting back, so there may be less buyers in the buying pool. The buyers that do have jobs may afford more when rates fall, but there could be less buyers overall.

Some buyers and sellers are holding off until the election before deciding to make a move. Americans feel less certain about their futures right now and they are looking for a reason to be optimistic. We just came off big inflation numbers where American purchasing power diminished, and now jobs are on the line. Some people are not optimistic about moving forward until they bring back a sense of control in their life.

We’re not sure the election is going to give them that, but we understand it as we hear these every four years.

Industry Changes

Industry practice changes are in effect. We predict several months of chaos as buyers, sellers, and agents figure out how to work in the new environment. Some brokerages have already figured it out and are operating as though not much has changed. Other brokerages and agents are in a state of confusion and don’t know how to move forward.

We’ve been telling readers for a while; it pays to work with an agent who understands what is happening and how to succeed in this environment. Our clients’ successes are literally in the hands of agents who are experienced and well trained to work in this environment. You must know the new practices inside and out to be able to explain it to clients. Buyers and sellers need this information to make good decisions, and unfortunately some are not getting good information or making the best decisions.

The good news is, even if a seller doesn’t understand the practice changes and makes a decision they later wish to change, they can. And you don’t have to switch agents or brokerages to make the change. Sit down with your agent and ask questions. If you’re unhappy with the results, make a change to the way they operate.

Interview

Buyers and sellers should interview agents now. Who you hire matters. The Ellis Team at Keller Williams is available to meet with you and discuss your options. You may or may not hire us, but at least you’ll understand better the options available to you and how they affect you. Take advantage of reduced home inventory supply levels while it lasts.

Good luck, and Happy House Hunting!

Ellis Team Weekend Open Houses

Open House Saturday 2-4 PM

5407 Parker Dr Fort Myers FL

Open House Sunday 12-3 PM

2752 Geary St Matlacha, FL

Open House Sunday 12-3 PM

914 SW 12th Ter cape Coral, FL

Cape Coral Waterfront Pool Home — Waterfront Pool Home

Open House Sunday 12-3 PM

26236 Colony Rd Bonita Springs, FL

Affordable home with Kinetico water system — Affordable Furnished Home

This is the week real estate industry changes went into effect. Today we’ll cover those changes once more as this will be a whole new process for Realtors, buyers, and sellers.

Real Estate Industry Changes

Locally, effective July 31, 2024, the MLS compensation field has been removed from MLS. Sellers may still offer compensation to buyers’ agents to sell their property, but the amount can no longer be listed in the MLS.

Buyer agents will need to call the listing agent directly to find out how much the seller is offering or view it on the listing brokers custom website. Offers may be placed on signs, newsletters, brochures, etc., just not in the MLS, or associated connected tools of the MLS.

Buyers

Buyers must sign an agreement with an agent to tour homes. This agreement shall cover such things as compensation the buyer will pay the buyer’s agent for services, among other things. This does not mean that the buyer agent cannot accept payment from the seller, because they can. Any fee recouped from the seller will offset how much the buyer will have to pay the buyer agent. In many cases, the seller will be paying the entire buyer’s agent fee.

Buyers will have choices. If a seller is not willing to pay all or part of the buyer’s agent fee on the buyer’s behalf, the buyer can ask the seller to pay it through the offer. Or the buyer might decide to skip that property and move on to more buyer friendly properties. In the end, the market will dictate which properties hold the most value to the buyer. How the offer is structured will be a point of negotiation.

Sellers

Sellers will make decisions at the time of listing how much they will compensate buyer’s agents. This offer will then be communicated to showing agents. Buyers will then make decisions about which properties they wish to see based upon the totality of their criteria. Buyer agent compensation may be a big thing to some buyers and almost negligible to others. If buyer agent compensation is not offered, buyers may offer less for the property, unless the property is deemed such a good value, and they don’t want to lose it to another buyer. Again, the market will decide the total value of the property based upon market conditions.

Work Around

Buyers could go directly to the listing agent. In this case, the buyer will not need to sign a buyer broker agreement to tour homes. A buyer may need to sign a representation agreement, depending on the brokerage, but this will not require a compensation agreement.

Listing agents will in many cases be paid their listing fee plus a fee to work with unrepresented buyers because the agent will spend more time showing the property, educating buyers, attending inspections, and working both sides of the contract. The primary benefit of this arrangement is the buyer won’t need to sign a compensation agreement.

Open Houses

Buyers will not need to sign a buyer agreement to visit an open house. However, if a buyer meets an agent at an open house and asks them to show the other properties, then they will need an agreement.

If you thought buyers and sellers were confused before, these next several months amp up the confusion. The end goal is to have a more educated buyer and seller upfront.

Interview Before You Hire

The agent you list with now matters more than ever. Trust and reputation between agents will be more critical as communication through MLS is taken away. The buyer’s agents will show homes that offer the best relationships and efficient communication. If a buyer’s agent calls a listing agent with compensation questions and the listing agent doesn’t return calls, this will be a problem and that property may be skipped. This will harm buyers and sellers.

Agents know which agents do the business and who they can work with. Experience matters now more than ever. The next 6 months could be chaos, so working with an agent who has the tools and experience to handle these real estate industry changes will be critical.

Always Call the Ellis Team at Keller Williams Realty 239-489-4042. We’ll guide you through the process, no matter which side you are on.

Fun Real Estate Video

Ellis Team Weekend Open Houses

Open House Saturday 12-3 PM

10813 Dennington Rd Fort Myers, FL 33913

Open House Sunday 12-3 PM

2752 Geary St Matlacha, FL 33993

Lee County Home Prices fell again in June, bringing the median home price to $400,000. Last year it was $430,000, so that was a 7% drop in the last year. In May median home prices were $415,000, so prices are continuing to drop.

Closed home sales fell 9% from last year, and 18.62% from last month. New pending sales are down 10.5% from last year, so things are not looking up for the coming months. The deteriorating housing market is not surprising as the effects of rising interest rates have had their desired effects to slow things down. The deterioration is usually the worst just before interest rates start declining.

The Fed can lower rates once they see data that the economy has cooled off. The risk is they overshoot the slowdown and things continue to deteriorate after they begin easing rates. Because economic activity is a lagging indicator to rates, it is very difficult to time interest rate hikes and easing perfectly for a smooth landing.

Rate Cut?

Wall Street odds place a September rate cut at 96%. The Economist’s odds are in the 82% range. We believe rates will come down 25 basis points in September or November depending on the data that comes out in the coming months.

Mortgage activity picks up each time interest rates fall. We’ve already seen rates fall about a quarter percent in the last 3 weeks. If economic data becomes bleaker, the mortgage market may react before the Feds cut rates.

Uncertainty

America has about as much uncertainty as we have seen in a long time. Inflation rose at a record pace followed by record interest rate hikes. Too much money has been released into the markets due to government overspending and it has taken high rates a while to influence the labor market and economy. Housing has certainly been affected. Couple the drastic economic fluctuations with a polarized electorate, and assassination attempt of a former president, and the current ruling party forcing their candidate to withdraw from the race, and you’ve got a recipe for uncertainty.

With election season upon us, who knows when the silliness will abate. It’s silly season alright, but there are signs the real estate market could do better in the 4^th quarter.

Currently oil prices are declining. Once we have a winner and know the makeup of the White House and Congress, our country can begin moving forward. If we have lower interest rates later this year and things quiet down in the middle east, Ukraine, and Taiwan, we could be in for improving real estate conditions.

I know these are big ifs. However, we must admit we are living in uncertain times, and much is unknown. I watched a documentary the other day that showed how America was similar to 1968. I went back and looked at home prices from 1968-1970 and prices declined about $30,000 adjusted for inflation. I did not study any other economic conditions from 1968 so don’t take this analogy in American history as a predictor of what the real estate market will do.

I think we can all agree it will be nice to settle into certainty. Our home is our castle, and some certainty with our castle will feel more settling.

Like to Sell

If you have a home to sell, always call the Ellis Team at Keller Williams Realty 239-489-4042. We cannot settle the country, but we can settle your situation. With over 37 years of experience, Brett and Sande are uniquely qualified to sell your home in this changing market. We look forward to speaking with you, no matter your situation. We’ve been through changing markets before and hiring a professional that understands marketing must change to meet the moment. Sande and Brett Ellis know how to market to the moment.

If you’re thinking of selling, or tried to sell and it didn’t work out, give us a call. We can help.

Good luck, and Happy Home Selling!

Big Changes Coming August 1

Ellis Team Weekend Open Houses

Open House Saturday 12-3 PM

5407 Parker Dr Fort Myers, FL

Open House Sunday 12-3 PM

26236 Colony Rd Bonita Springs, FL

Fun Real Estate Marketing Videos

The practice of real estate is going to change in a big way as there are major real estate changes coming August 1.

In the old days, and by old, I mean last week, buyers would work with an agent, and they didn’t have to worry about how the agent was going to be paid. The seller paid for it. Going forward, the seller still may pay it, but what happens upfront is going to change.

Major Real Estate Changes

Going forward the buyer has two choices. The first is to sit down with an agent and hire them to work with for an agreed-upon amount of money. Once there is agreement, the buyer and agent can negotiate to get the seller to pay for it. In the absence of that, buyer will pay the amount owed, or the balance of the amount owed if seller is paying for part of it. Or the buyer can say don’t show me properties unless the seller is going to pay for it.

The other option is to not hire an agent and contact listing brokers directly. Listing brokers are not required to sign a buyer to a buyer agreement on one of their own listed properties. Some buyers will absolutely choose this method as they won’t want to be tied down with anyone.

This second option could get old fast if the buyer is not successful scoring a property. It takes a lot of time to research and call listing agents, attend showings, or attend open houses. Many of these buyers will not have all the required mortgage and insurance approvals needed to move forward on a moment’s notice when they do find a home they like.

The buyers will not necessarily save any money with this second option either because the listing agent will be taking time and doing both ends of the deal or hiring agents to help out. What it will do is relieve buyers from signing a buyer agreement with an agent they don’t know well or trust.

Research Before Signing

Sellers have been signing agreements for years. Before a seller signs an agreement with an agent to sell their home, typically they might research who has a track record of selling homes and interview them to make sure they were a good fit.

Buyers on the other hand worked with the first agent they met and liked. This was probably always a mistake because the first likeable agent might not be the best agent to negotiate your home purchase with. Our advice would be to interview buyer agents the same way a seller would interview listing agents. Ask them key questions about their experience and track record, and what you can expect when you work with them regarding availability, communication, and negotiations. Does your agent have access to key resources like inspectors, lenders, accountants, engineers, CPA’s, lawyers, etc.?

Information is Key

Now more than ever information will be key. Certain fields will be removed from the MLS. Established procedures will be eliminated or redefined. Choosing an agent or a strategy will be paramount in home buying and home selling success. I feel like the new mandatory rules remove transparency and make it harder for consumers to make informed decisions. Removing the fields from MLS will slow things down, but the professionals will rise to help you. Inexperienced agents and less than 100% committed agents will have a tough time, and so will their clients. major real estate changes like this require you to hire the best when buying and selling.

If you’re looking for an experienced team that can help you in the coming days, Always Call the Ellis Team at Keller Williams Realty 239-489-4042 or visit www.LeeCountyOnline.com We’re here to help!

Ellis Team Weekend Open Houses

Open House Saturday 12-3 PM

5407 Parker Dr Fort Myers, FL

Open House Saturday 12-3 PM

14386 Reflection Lakes Dr Fort Myers, FL

Open House Sunday 12-3 PM

10813 Dennington Rd Fort Myers, FL

Traditional sales dominate SW Florida real estate market, but that doesn’t stop buyers asking how they can buy foreclosures and short sales. Every week we get calls from buyers looking for off-market properties and distressed sales.

This tells us a few things. First, they’ve looked at everything available on MLS and have not found anything that meets their criteria. Secondly, these buyers have an expectation that our market is distressed, and they want a deal.

With one glance at the chart, you will see that foreclosures are practically nonexistent in the Lee County single family housing market. Less than .6% of our home sales were distressed in May. We had zero short sales and only 8 foreclosure sales in MLS.

There will always be a few distressed sales in almost any market. The 8 foreclosure sales are negligible statistically. I remember about 70% distressed sales back in 2008-2009. Our market is nothing like that time, for many reasons.

Speculators

Back in the 2005 market we had speculators purchasing properties as fast as they could and flipping to another speculator. There was never an end-user in sight, but that didn’t stop the speculating. I don’t call these people investors because they didn’t follow any of the typical investing strategies. These speculators operated on the “what a bigger fool will pay” theory until the music stopped. It worked for several years, until it didn’t. All they did was finance the overproduction of homes with cheap capital.

Fast forward to today. During the runup from 2020-2022 we had end users in every home. That was true for owners and renters. You could hardly find a home to move into no matter your financial wherewithal.

What hurt this market was the combination of things. Hurricane Ian did not help. Rising interest rates hurt the ability of homebuyers to afford homes at the current prices. Add to that the rising cost of homeowners and flood insurance, and we had a recipe for a strain on affordability. Lastly, some employers have been calling their people back to work at the office. This has led some that moved here because of Covid to move back.

Affordability Strain

Housing inventory is up 82.8% versus last year, but median home prices are only down 6.7%. There is no doubt housing affordability has put a strain on the real estate market, and most is the result of rising interest rates. As the economy slows down, rates may begin to drop. The official forecasts are rates should hold steady in 2024 and perhaps begin to drift lower. In 2025 rates should begin to drift lower. Forecasts range from about ½% to 2%.

Buyers may not want to wait for rates to fall a full 2% for two reasons. One, it may not happen. Secondly, all the other buyers will be jumping back in, and they will be competing with each other. Right now, the seller is on the defensive and wondering when this market is going to turn around. Once rates start declining, the buyer may not have the advantage over sellers like they do today.

MLS Search

The best website to search for properties is www.LeeCountyOnline.com Bookmark this site. Things are changing in the real estate industry, and when the changes hit in August, popular portals like Zillow and Realtor.com may not offer as many tools and properties listed as LeeCountyOnline.com does.

Always Call the Ellis Team at Keller Williams Realty 239-489-4042 with your real estate questions. We are here to answer your questions on the upcoming changes in August as well.

Good luck, and Happy Home Shopping!

Ellis Team Weekend Open Houses

Open House Saturday 12-3 PM

2752 Geary St, Matlacha FL

As Seen on TV Fox 4 Out and About South West Florida

Open House Sunday 12-3 PM

14386 Reflection Lakes Dr, Fort Myers FL

Open House Sunday 12-3 PM

26236 Colony Rd, Bonita Springs FL

May closed home sales rose 2.7% over last year’s numbers in May, showing that buyers are active in the market when affordability shows up.

Interest rates ticked down, which helped with affordability, and single-family median home prices were down 6.7% from last year as well. Both factors contributed to an uptick in closings and pending sales.

Pending single family home inventory is up 18% over May 2023, and internal data suggests inventory has capped in June even though official May numbers show inventory is still rising. Official numbers lag our internal data collection in real-time.

Condos

Lee County condos are another story. Closed sales are down 16.1% from last year, and inventory is up 122.9%. We currently have a 10-month supply of condos on the market. New pending condo sales are down 24.9%. The median sales price of a condo in Lee County was down 2.9% from last year. Some condos are easier to sell than others. Factors that affect salability include whether the master association has a flood policy, because this affects if lenders will lend. Other factors include the total cost of condo/HOA fees and insurance.

Forecasts

Forecasts continue from FNMA continue to show 2024 should be a better year than 2023 in closed sales. FNMA is predicting a 9.0% increase in the number of single-family home sales. This could be because inventory has been tight across North America, and they are expecting more to come on the market. However, this coincides with what we are seeing in SW Florida home sales.

Many people believe nothing is selling, and it only feels like that when you see homes sitting on the market longer. The reality is more homes are selling this year, so long as they are marketed correctly and priced properly. Buyers have less motivation than they did a few years ago, and higher prices, higher interest rates, and rising insurance costs caused this.

While home sales are rising, we can continue to see home prices fall more. 7.1 months’ supply of single-family homes means we are in a buyer’s market. Even though we are tracking declining inventory in June internally, inventory levels have only slightly decreased. Prices are a lagging indicator to inventory. Additionally, we’ve seen a 4-week reduction in inventory, but that’s not enough to call it a defined trend yet.

The Good news is inventory has stopped rising in June. Prices may continue to fall, but at some point, that will level out if we continue to close more units and inventory declines. We expect interest rates to fall slightly by end of the year, and again slightly in 2025. If we can get insurance under control and escape hurricane damage this year, 2025 may be brighter than 2024.

Prime Time

The 2^nd half of 2024 may be prime time for buyers. Prices have been coming down while there is an excellent selection of homes available. Sellers are willing to negotiate, and rates are coming down a little. Buyers may lose some leverage heading into 2025 and may look back on 2024 as the prime time to purchase. Originally, we thought the first 6 months of this year would be prime time for buyers, but the timeline got pushed back because of inflation. The Fed was not able to begin lowering rates due to pesky inflation. We hope future inflation readings will be kind so the Fed can act later this year. The absolute earliest they would change would be at the September meeting, and it could go until November, depending on the data.

Home Value Tool

We’ve got a new tool on our website www.LeeCountyOnline.com that provides an instant estimate of your home’s value. Additionally, it provides an equity analysis on your home, and allows you to ask questions about your neighborhood and the market. It’s a great way to explore home value options, even if you’re just curious about the market. Check it out.

And remember, Always Call the Ellis Team at Keller Williams Realty 239-310-6500 with your real estate questions. Brett and Sande are here to listen and help you.

Good luck, and Happy Selling!

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