September Inventory Levels Rise Slightly in Select Price Ranges

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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“

Local Home Sales Highest on Record

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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“

Lee County Sales Prices Hit Pause in July

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Lee County sales prices hit pause in July, backing down from June’s numbers.  The median sales price in Lee County was $360,000 in July, down from $365,000 in June.  The average sales price was $469,072 in July, down from $505,976 in June.

Sales Prices Hit Pause in July

Sales prices are up year over year.  Median sales price is up 27.2% in July and the average sales price is up 23%.  We saw big price increases start last September and October, so we expect to see large double-digit year over year numbers for several months to come.  Once December and January roll around, we do not expect those numbers to be as large unless prices continue escalating.

We are still experiencing multiple offers on many properties, and many properties are going well over asking price.  Since school started, we are not seeing the hyperactivity we were though.  There are too many headwinds that should prevent the market from double digit gains we have seen in the past.

It appears overall sales prices hit pause recently.  This does not mean all homes have hit pause.  The market rarely speaks in unison, although this past year it pretty much did.

When interest rates rise, and they inevitably will, it will put pressure on upward movement of prices.  Once prices hit full market value rising rates could lead to a decline in home prices.  The question is, what is full market value?

I don’t know who has the answer, but my suspicion is we are somewhere in the neighborhood.  Full market value is relative.  We seem so high priced compared to where we were, but then again, I always felt we were undervalued locally.  We are still a bargain compared to other parts of the country.  For what SW Florida offers, we may still be a bargain.

It is natural that markets take a breather and assess the situation.  Stock markets do it all the time, and so do real estate markets.  Most agents I know wouldn’t complain if this market took a breather.  Agents have never worked harder, and many could use a vacation.

If prices do take a breather, it can be a wonderful thing.  Prices are at all-time highs, so sellers get the benefit of that.  They also get the benefit of low inventory, although it has been rising slightly in recent months.  It is always more fun to sell in a low inventory environment when prices are high.

If prices do level out for a bit, sellers will need to be more accommodative to buyers.  Right now, sellers hold all the cards, but one day the buyers will hold some cards too.  Buyers may not have to give delayed possession or their first-born son like they do now.  The playing field would be more level.

Then again, maybe our market will continue climbing.  We may hit a soft-landing spot for us all to look around, take a breath, and decide to go higher.  Or, after careful assessment, the market could top out and drift a bit lower.

Nobody knows what the market will do.  Whatever the market does, we will report it to you fairly and honestly.

Sellers, if you were waiting for the perfect moment to sell but holding out for more, now may be the time to act.  You might get more in the future, but then again you might now.  Most sellers wait too long and regret not selling sooner.  If you have a property you do not love or need, give Brett or Sande Ellis a call 239-310-6500.

We have a website that gives instant online estimates of your home. www.SWFLHomevalues.com  The best part it, it will show you the direction of your home price every month.  Even if it is off slightly on your value, you can use it to track the direction of your home price.

Good luck, and Happy Home Selling!

Distressed Sales Practically Non-Existent in 2021

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Ever since Covid-19 hit people have been speculating we would see another wave of foreclosures hitting the market.  Experts talked about how many homes were utilizing mortgage assistance and how this would impact the market in the future.  We see distressed sales practically non-existent in 2021 and going forward, and we’ll explain why.

Distressed Sales Practically Non-Existent in 2021

In June, we had 0 short sales and 3 foreclosure sales out of 1,748.  That’s about 1/10th of 1% distressed sales.

Those reported numbers of consumers in forbearance were overblown.  We did not see those kinds of numbers.  For those that did use forbearance, many have caught back up with their mortgage servicer.  Furthermore, some people filed for forbearance as an additional tool for mortgage relief not knowing what Covid-19 was going to do to the economy.

Cash Sales

Next, the media speculated that as people lost their jobs, those caught paying high prices would be susceptible to a real estate correction.  This simply is not true either. Closed sales in June were up 40.6% while cash sales were up 149%.  More people are paying cash or putting substantial down.  Unlike 2006, people have equity in their homes regardless of what the market does.

High Demand

Secondly, we have end users for every home.  Back in 2006 we had flippers who built homes to flip to the next person without an end user in sight.  Today, you can hardly find a resale or rental.  Not only do homeowners have more equity today, but demand has also never been higher.

Changing Landscape

Covid has changed the way people think about their living and work choices.  More people have decided to exit the city life and move to the rural and less densely populated areas.  People have decided they can work from home, and they rather enjoy it.  Florida has become a popular destination for the work from home crowd.  If you are going to pack up and move, why not move to a low-tax state with beautiful weather?

When the market shifts, and eventually it will because all markets shift, we do not believe this market will be in trouble.  Most people vision real estate markets going up a cliff then straight down a cliff.  The reality may be our market heads up for a period, then levels off when it reaches an affordability point.  What happens after there is anybody’s guess. The market could stay level, generally rise slowly along a bumpy road, or decline slowly along a bumpy or uneven road.  Supply, demand, and affordability will one day drive the market.

Right now, demand outweighs supply.  We still have more people that wish to move here than leave.  Interest rates are low, and even for many locals the market is still affordable.  For out of state buyers, Florida seems like a bargain compared to where they are coming from.

Real estate values are all about perspective.  To a buyer that looked 2 years ago and did not pull the trigger, we look high priced.  To a new buyer shopping from out of state, we look like a bargain.

Eviction Moratorium

We do look for the end of the eviction moratorium soon.  We believe this has placed an undue burden of renters as it has taken supply out of the market.  Once landlords can evict tenants not paying rent. More rentals will come back on the market and open opportunities for other renters.

Property to Sell?

Do you have a property to sell?  Are you wondering if now might be the optimal time to sell?  Talk to Sande or Brett Ellis at Keller Williams Realty 239-310-6500 We can discuss your options. Our marketing reaches out of state buyers willing to pay Top Dollar for your home. We have a website www.SWFLhomevalues.com that will give you an instant price estimate of your home. Our system will email you every month your new price so you can keep track of your equity position the market’s direction.

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

Local Listing Inventory Grew 3.41% in Past Week

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We have been tracking inventory levels for years now and we have spotted an interesting trend.  In the past week, local listing inventory grew 3.41% in Lee County Florida.

Local Listing Inventory Grew in past week

A few weeks ago we showed a graph we will repeat again this week.  It showed inventory bottomed out in March at 1,510 homes and rose each month in April, May, and June.  Since these official numbers were released, we decided to track daily numbers to see if the trend continues.

Local Listing Inventory Grew Last Week

On August 4th, inventory stood at 1,379 homes.  Keep in mind, these are not official numbers and there can be other listings from agents who are members in a different MLS.  So, when you see these numbers and wonder why they are less than the 1,510 I mentioned was the bottom, you’ll know why.  Using the same criteria, listings have risen to 1,426 by Aug 11th.  This is the 3.41% rise.

We still have a very hot market.  What this is telling us is that some properties may have had 20 offers and now may only receive 5.  New listings and back on market listings are outpacing the closings, hence the number is growing.

We have noticed some buyer fatigue at these prices.  It could also be that many buyers were shut out of the process and were forced to rent.  Rent prices have shot through the roof.  When the eviction moratorium finally ends, rent prices may come back down.  The end of the moratorium could lead to more listings as well.  Some owners wish to sell at today’s prices but have not been able to get a non-paying tenant out.

As we mentioned earlier, we still have a strong market.  So far, all the cards have been in the seller’s favor, and that may change.  At some point we may enter a more balanced market.  Listings are still too low, and it is a seller’s market.  As more listings enter the market, it could shift to a more neutral market.  When that happens, prices may not increase like they have.

In fact, we can almost predict prices will not increase like they have.  Statistically, we cannot have prices rising 36% year over year forever.  At some point buyers turn off and do something else.  Lately, cash buyers forced financed buyers out of the game.  When these markets shift, inevitably we see financed buyers start winning deals again.

Time to Sell?

We always tell sellers; it is more fun to sell when there is less competition.  Right now, there is not enough competition, but we can see it growing slowly.  If this trend continues, buyers will have more choices.  This is not to say prices cannot keep climbing.  They absolutely can.  Will they, who knows?  Whatever prices do, do not expect 36% increases going forward.  Rising interest rates will also eat into buyers purchasing power.

Florida Is/Was the Place to Be 

During the pandemic, Florida absolutely was the darling of work from home workers tired of lockdowns and high taxes in Northern states.  Today, we still enjoy low taxes and no lockdowns, but our Covid numbers are high.  How will that influence buyers going forward?  When will our numbers settle down?

Employers have begun calling employees back to work or paying them less if they work from home.  As the Delta variant spreads, employers have had to back off the return to workplace.  When normalcy returns, will the return to workspace affect the work from home demand Florida has enjoyed?  How would this affect sellers?

With rising inventory, buyer fatigue, and potential return to work situations, it might be time to think about selling a home you no longer love.  Competition from other sellers is low and even though market is great, this might be a great time to capitalize.

The Ellis Team tracks the market daily, so our clients always receive up to the minute data that can affect decisions.  If you are tracking a hurricane, you want the latest data to make best decisions.  The same is true in the real estate market.  The Ellis Team has the data.  Call Sande or Brett Ellis 239-310-6500 or visit www.SWFLhomevalues.com to get a quick estimate of your home’s value.

See last week’s article “Have Real Estate Prices Leveled Off?”

 

Have Real Estate Prices Leveled Off?

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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!

SW Florida Listing Inventory Rose 11.24% in Past Month

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Good news for home buyers.  SW Florida listing inventory rose 11.24% in the past month.  Buyers cannot rejoice as listing inventory is still low.  In fact, currently we have 1,336 listings in Lee County.  Last year we had 3,044, and that number was low.

SW Florida Listing Inventory
SW Florida listing inventory July 2021

We track the number of listings as well as the 365-day rolling number of homes closed.  Homes closed in the last year were up 2.14% versus last month.  It may take a little while for closings to catch up to the new inventory coming to the market.

It is too soon to know if rising inventory will become a trend.  We have a serious backlog of buyers, and it would take quite a few new homes on the market to meet that backlog.  We are hearing from the Northern markets that inventory is building, and homes are taking longer to sell.

Florida May Buck National Trend

The resurgence of Covid could also affect the market.  We are not sure how.  We have seen interest rates fall in the past few days because of speculation Covid could slow down global markets.

If real estate markets slow down up North, could that trickle down to the Florida market?  It could, but then again, Florida is attracting buyers from other markets.  It is only natural that one day those markets will lose residents who sell and do not replace in their state.  Many are replacing in their home and moving to Florida.

The U.S. economy generally affects the real estate market, but all bets are off now because the markets have not been behaving in a normal way with so many relocating to Florida.  Reasons vary by buyer.  Some choose Florida because it is a low tax state.  Others choose Florida because it did not lockdown like other states.  Still others appreciate the relaxed mask standards implemented last year.

Whatever the reasons, Florida seems to be an attractive place that may drive buyers here for years.  Not all buyers can simply pack up and move.  Sometimes it takes years of planning.  Family could be involved as well as a business.  Once a decision is made, it can take a while.

Has Market Peaked?

 Many sellers ask us when will the market peak?  We believe when June’s official numbers are released, we will see big numbers.  The same holds true for July.  Are there as many buyers bidding on each property?  Maybe not, but each property we list attracts many buyers.  Because inventory is still light, it will be interesting to see what happens next season.

The economy will not hold at this pace either.  Economic numbers released today are compared to last year’s Covid economic numbers. So of course, they will be great.  Economic numbers are expected to taper off as we get into the 1st quarter of 2022.

We see a good housing market in Florida continuing for the next several years.  We should not see rising prices like we have seen recently, but they should still rise.  Inflation will bring about higher costs to build.  Inflation could also eat into buyers spending money, so it is possible interest rates may stay low unless we see runaway inflation.

Nobody wants to see runaway inflation.  Inflation is like a hidden tax.  We will be watching inflation numbers through the 4th quarter of 2021 to get a read on whether it is transitory or real.

Now May be Good Time to Sell

If you are a seller, now might be the time to have a conversation with us about how much we can sell your home for.  While home prices may rise further, we believe we have seen the brunt of the increases.  Call Brett or Sande Ellis 239-310-6500 or visit www.SWFLhomevaules.com to get a quick estimate of your home’s value.

Now might be a good time to capitalize on this market while prices are still going up and before additional inventory hits the market.  It is always fun to sell to multiple buyers than waiting around for a buyer to make an offer.

Good luck and Happy Home Buying and Selling!  Always call the Ellis Team at Keller Williams Realty!

Florida Homes Sold Above Asking Price in 2021

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The most common question we get from buyers is what should I offer on this home?  The most common question we get from sellers is what price do you think I should list my home for? In May, 55% of Florida homes sold above asking price.

Florida Homes Sold Above Asking

In some price ranges as many as 70% are selling above asking price in Florida.  Even the luxury market saw as much as 40% selling over asking price in May.  The numbers are rising.  As you can tell by the graph, there is about a 20% gain in percentage of Florida homes sold above asking price.  Those numbers are progressively growing each month.  This means the market is still gaining momentum.

The numbers are telling buyers that if they want to score a home, they cannot mess around.  This is not the market to negotiate or nickel and dime a seller.  The sellers have the upper hand. Ignoring reality will be a big waste of time.

Top Agents Leave a Blueprint for Buyers

As a top listing agent, we see many offers on our listings.  We give clear instructions on what the seller is looking for and the kinds of things we will be evaluating. When the offers come piling in, it is almost as if the buyer agents did not read any of the instructions. These instructions provide a blueprint for writing a competitive offer. Unfortunately for these buyers, they will probably miss out because their offer is not competitive.

An offer is judged by how well it is written.  A buyer’s ability to close is judged not only by the financial terms, but the language in the contract.  We have talked about how relationships matter in this market.  They absolutely do, and so does the competency of the language in the contract.

If the offer is written sloppily, it is fair to assume that is how the whole transaction is going to go.  If a buyer’s agent does not understand the contract, how are they going to counsel their buyer.  A purchase agreement is like a test.  It is a snapshot.  The offer tells a story.  If the story is sloppy, ambiguous, and does not add up, a top listing agent will sniff that out and the deal will likely go to a better offer.

Best Means Most Likely to Close Near Top End of Value

You have heard of the term Highest and Best.  Highest means highest price, but best to me means most favorable terms and most likely to close.  Best equals confidence.  Am I as the listing agent confident this deal will close?

For instance, it does no good for an FHA buyer to offer above list price with minimal down just to win the bid.  If the buyer cannot cover an appraisal deficiency, they are just trying to score the deal on price alone.  The listing agent should know the price will get kicked back down to appraisal value, which is not always actual value.

Why not take the best offer upfront?  Experience matters!  Experience matters when you hire a listing agent, and it matters when you hire a buyer’s agent.

For a seller, taking the wrong offer can cost you tens of thousands of dollars.  Many sellers sell their home 3-4 times because they take the wrong offer.

For a buyer, writing the wrong offer will cost you a sale.  There are buyers out there that have lost out on 30+ offers, and you must wonder if they wrote a better offer if they might have scored one of those deals.

Strategy Session Important for Buyers

Our team has a buyer consultation with each buyer followed by a strategy session. We educate our buyers on how to score a home, and it is not just on price. We have our ducks in a row.  Our offers make sense, and they often get accepted.

If you want a Top agent to sell your home, call Brett or Sande at 239-310-6500 or visit www.SWFLhomevalues.com to get an instant home value of your home.

If you are looking to buy in this market, call one of our buyer agents at 239-489-4042 or visit www.LeeCountyOnline.com.

Experience matters.  Call the Best, expect the best!

See latest home price data “Southwest Florida Home Sales Prices Rise Whopping 38.7% in May“

Condo Safety Questions Arise Out of Surfside Tragedy

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This past week we have seen condo safety questions arise in the wake of the Surfside tragedy.  Prior to the condo collapse, it was unthinkable that a building in the United States would just fall like that.  The surfside tragedy has opened eyes and left many questions.

Condo Safety Questions Arise out of Surfside Tragedy

The first question I received was from agents asking if it could happen here, and if buyers would be worried about that.  Here are my thoughts.

We really do not know what happened or what the cause was.  Some say there was some payoffs and funny business in the building permit, and inspection process at the beginning.  Other theories speculate that the salt water may have rusted the rebar in the concrete which caused the failure.  Others have said the pool collapse put pressure on the building.

It is possible that all these things are true, or it was caused by something else entirely.  What we do know is there needs to be a thorough investigation so that we can determine if other buildings are in jeopardy.

Are Changes Needed?

Whatever they find could lead to changes in construction practices.  I also believe we need to have inspections before building is 40 years old.  I am not an engineer and do not have any answers.  This may not be a widespread problem because you really do not hear about buildings just falling.  However, it did happen once.  If it happens once, it could happen again.

We owe it to the lost souls at Surfside to demand answers.  If changes are needed, let’s implement them now.  If inspections and solutions to existing structures are needed, let’s get going now.  I am not saying panic, I am saying we should not kick the can down the road.

Will this affect buyers view towards condo buildings?  The truth is I do not know.  Logically, we have mid and high-rise buildings everywhere seemingly without issues.  I could foresee additional costs associated with owning a hi-rise in the way of inspections and remediation to older structures.

More Legal Scrutiny

Condominium association boards will be under more legal scrutiny to investigate and remedy potential safety concerns.  Many associations may not have reserves to cover costly repairs and maintenance items.  Imagine a board member’s dilemma voting whether to spend lots of money the association does not have for repair items.  That may not be an easy vote among the constituents.  On the other hand, imagine voting no and having another tragedy.  Condo owners would sue for malfeasance like we have already seen in the wake of this tragedy.

All I can say is it is time for leaders to show up, both at the city/county level and at the association level. Tough decisions will have to be made in the coming years, and residents better be prepared to dole out some money in assessment fees.  Do not be hard on your condo board.  They may be forced to make some tough decisions because safety is on the line.

The Surfside tragedy will probably increase the cost of ownership of high-rise buildings.  It may increase the cost of insurance as well.  Insurance companies will probably require more inspections and changes like they have on the single-family residential side.

Cost of Ownership May Increase

Condo living can be a wonderful way of life for many.  The cost of ownership may go up for some of the older buildings, but that does not mean people will stop enjoying the condo life.

Let us all say a prayer for those over at Surfside.  They deserve it. Let us also take steps to make sure this does not happen again. Be kind to your fellow residents, and when tough decisions arise, do not be too hard on condo board members.  Picture yourself in their shoes. Would you want to be the board member who voted to raise assessments?  Would you want to be the one who voted to save money and another tragedy happens?  They have tough decisions, so let’s try to support them.

God Bless and stay safe!

See last week’s article “We Would Like to Ask You a Favor“

We Would Like to Ask You a Favor

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As you may have heard, the real estate market is hot.  Interest rates are low and there is heavy demand for homes.  The challenge is there is not enough listed homes for sale for all the buyers looking.

Ask You a Favor

In fact, we are working with a number of buyers that we are struggling to find homes for.  So here is the favor. Who do you know that may be thinking of moving in the next 30-90 days?

Could you introduce us?  We may have a buyer willing to pay top dollar for their home.  Our marketing is working as we are finding buyers from all over the country looking to purchase in SW Florida.

Feel free to call us 239-310-6500 or email me Brett@topagent.com with their name and phone number. We will be sure to take great care of them.  And if you do not know of anyone now, please keep your ears open.

Listing inventory is down 65.9% from last year. We reported last week home sale prices are up 38.7% over last year.  What a perfect time to be a seller!  We love showing graphs.  If you were a seller, you could not draw a more favorable graph.

The question we always get is how long will this market last?  We do not see this market changing anytime soon.  We feel sellers will be on solid ground for a while.  As America gets back to work the economy should continue to improve.  The real question will be where do interest rates go from here? There is much debate about inflation and whether it is permanent or transitory.  There is little debate that it is real and here now.  Interest rates have risen.  Typically rising rates are headwinds to the real estate market, but rates are still low compared to previous booms.  The thinking is we have some room left for more price gains.

Some sellers are truly not aware of what their property is worth.  When they find out, their motivation to move increases.  Typically, people stay in their home 5-7 years, but in SW Florida many homeowners have stayed much longer than that.  They have stayed because the value was not there to make them move.  When you sit in a property so long, you kind of give up on the idea and forget to track changing values.

Our website gives an instant value, and it tracks the changes.  Every 30 days homeowners get an updated value.  It struggles a bit with new properties on the tax roll, so if your home is new it may not give a value until November. Check it out at www.SWFLHomevalues.com

We have seen listings rise a bit the last few months.  We believe some sellers held off putting their home on the market due to Covid.  As life returns to normal, more sellers may take advantage of this seller’s market.  That is a good thing because sellers are receiving Top Dollar and buyers are finding homes to live in.

We need more sellers though.  So back to the favor.  Please call us with your friends and neighbors who are considering selling.  We can get them top dollar and help some of these buyers get into homes that desperately need to.  Buyers will not be desperate forever and the tide will turn.  It is always more fun to sell in a seller’s market than a buyer’s market.

Always Call the Ellis Team at Keller Williams Realty.  We thank you for voting us the top real estate team in SW Florida for 6 straight years.  Please vote for us again this year in the News Press Readers poll.

Enjoy the 4th of July.  America really is the greatest country on earth.

Good luck and Happy Buying and Selling!

See last week’s article Southwest Florida Sales Prices Rise Whopping 38.7% in May