The Unanimous Declaration of the United States of America- Don’t Forget Why We’re Here

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Declaration of the United States of America
Declaration of Independence

The Unanimous Declaration of the United States of America

(Adopted by Congress on July 4, 1776)

The Unanimous Declaration
of the Thirteen United States of America
When, in the course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the laws of nature and of nature’s God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness. That to secure these rights, governments are instituted among men, deriving their just powers from the consent of the governed. That whenever any form of government becomes destructive to these ends, it is the right of the people to alter or to abolish it, and to institute new government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their safety and happiness. Prudence, indeed, will dictate that governments long established should not be changed for light and transient causes; and accordingly all experience hath shown that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same object evinces a design to reduce them under absolute despotism, it is their right, it is their duty, to throw off such government, and to provide new guards for their future security. –Such has been the patient sufferance of these colonies; and such is now the necessity which constrains them to alter their former systems of government. The history of the present King of Great Britain is a history of repeated injuries and usurpations, all having in direct object the establishment of an absolute tyranny over these states. To prove this, let facts be submitted to a candid world.

He has refused his assent to laws, the most wholesome and necessary for the public good.

He has forbidden his governors to pass laws of immediate and pressing importance, unless suspended in their operation till his assent should be obtained; and when so suspended, he has utterly neglected to attend to them.

He has refused to pass other laws for the accommodation of large districts of people, unless those people would relinquish the right of representation in the legislature, a right inestimable to them and formidable to tyrants only.

He has called together legislative bodies at places unusual, uncomfortable, and distant from the depository of their public records, for the sole purpose of fatiguing them into compliance with his measures.

He has dissolved representative houses repeatedly, for opposing with manly firmness his invasions on the rights of the people.

He has refused for a long time, after such dissolutions, to cause others to be elected; whereby the legislative powers, incapable of annihilation, have returned to the people at large for their exercise; the state remaining in the meantime exposed to all the dangers of invasion from without, and convulsions within.

He has endeavored to prevent the population of these states; for that purpose obstructing the laws for naturalization of foreigners; refusing to pass others to encourage their migration hither, and raising the conditions of new appropriations of lands.

He has obstructed the administration of justice, by refusing his assent to laws for establishing judiciary powers.

He has made judges dependent on his will alone, for the tenure of their offices, and the amount and payment of their salaries.

He has erected a multitude of new offices, and sent hither swarms of officers to harass our people, and eat out their substance.

He has kept among us, in times of peace, standing armies without the consent of our legislature.

He has affected to render the military independent of and superior to civil power.

He has combined with others to subject us to a jurisdiction foreign to our constitution, and unacknowledged by our laws; giving his assent to their acts of pretended legislation:

For quartering large bodies of armed troops among us:

For protecting them, by mock trial, from punishment for any murders which they should commit on the inhabitants of these states:

For cutting off our trade with all parts of the world:

For imposing taxes on us without our consent:

For depriving us in many cases, of the benefits of trial by jury:

For transporting us beyond seas to be tried for pretended offenses:

For abolishing the free system of English laws in a neighboring province, establishing therein an arbitrary government, and enlarging its boundaries so as to render it at once an example and fit instrument for introducing the same absolute rule in these colonies:

For taking away our charters, abolishing our most valuable laws, and altering fundamentally the forms of our governments:

For suspending our own legislatures, and declaring themselves invested with power to legislate for us in all cases whatsoever.

He has abdicated government here, by declaring us out of his protection and waging war against us.

He has plundered our seas, ravaged our coasts, burned our towns, and destroyed the lives of our people.

He is at this time transporting large armies of foreign mercenaries to complete the works of death, desolation and tyranny, already begun with circumstances of cruelty and perfidy scarcely paralleled in the most barbarous ages, and totally unworthy the head of a civilized nation.

He has constrained our fellow citizens taken captive on the high seas to bear arms against their country, to become the executioners of their friends and brethren, or to fall themselves by their hands.

He has excited domestic insurrections amongst us, and has endeavored to bring on the inhabitants of our frontiers, the merciless Indian savages, whose known rule of warfare, is undistinguished destruction of all ages, sexes and conditions.

In every stage of these oppressions we have petitioned for redress in the most humble terms: our repeated petitions have been answered only by repeated injury. A prince, whose character is thus marked by every act which may define a tyrant, is unfit to be the ruler of a free people.

Nor have we been wanting in attention to our British brethren. We have warned them from time to time of attempts by their legislature to extend an unwarrantable jurisdiction over us. We have reminded them of the circumstances of our emigration and settlement here. We have appealed to their native justice and magnanimity, and we have conjured them by the ties of our common kindred to disavow these usurpations, which, would inevitably interrupt our connections and correspondence. They too have been deaf to the voice of justice and of consanguinity. We must, therefore, acquiesce in the necessity, which denounces our separation, and hold them, as we hold the rest of mankind, enemies in war, in peace friends.

We, therefore, the representatives of the United States of America, in General Congress, assembled, appealing to the Supreme Judge of the world for the rectitude of our intentions, do, in the name, and by the authority of the good people of these colonies, solemnly publish and declare, that these united colonies are, and of right ought to be free and independent states; that they are absolved from all allegiance to the British Crown, and that all political connection between them and the state of Great Britain, is and ought to be totally dissolved; and that as free and independent states, they have full power to levy war, conclude peace, contract alliances, establish commerce, and to do all other acts and things which independent states may of right do. And for the support of this declaration, with a firm reliance on the protection of Divine Providence, we mutually pledge to each other our lives, our fortunes and our sacred honor.

 

Spotlight on Reflection Lakes Fort Myers June 2011

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Reflection Lakes Fort Myers is a gated community in South Ft Myers consisting of 820 properties, 194 of which are single family homes and 358 are villa homes, and 268 condos. Reflection Lakes is centrally located off Summerlin Rd and Cypress Lake Dr with entrances from both.

Perhaps Reflection Lakes greatest beauty is the fact that it abuts Lakes Regional Park full of pristine views and wildlife. Reflection Lakes residents even have their own private entrance into Lakes Park.

Home prices are down significantly from their highs back in 2005, as all neighborhoods are. Currently there are homes priced from $145,000 to $629,700 on the market. The highest sales price for a home in 2011 has been $510,000.

Condos on the market currently range from $119,900 to $219,000. The highest condo sales price in 2011 was $185,000.

Reflection Lakes Fort Myers
4 Bedroom 3 Bath Home in Reflection lakes

The home pictured above is currently listed by the Ellis Team for $280,000 and is located in the Las Palmas section of Reflection Lakes, formerly known as the Estates II section. The home has 4 bedrooms, 3 baths and has 2433 square feet of living area. The kitchen features granite counter tops, and the home has a large private back yard with lake views. The home also has hurricane shutters.

Another amenity residents love is the clubhouse. Reflection Lakes offers clay tennis courts, a bocce court, a full sized basketball court, volleyball court, putting green, and an oversized pool with waterfall along with a children’s pool.

Reflection Lakes Exercise Room in Fort Myers Florida

 

Billiard Room in Reflection Lakes

Reflection Lakes Billiard Room

Inside the clubhouse is an exercise room with state of the art professional workout equipment, a card room, billiard room, and a banquet room with full kitchen. The community enjoys many community events as the residents have an active recreation committee planning wonderful events year round.

Clay Tennis Courts in Reflection Lakes Fort Myers Florida
Reflection Lakes Clay Tennis Courts

Reflection Lakes is very stable financially which makes it attractive for buyers and lenders. Lenders today are skittish about lending when there are many homes in foreclosure or a certain number are unoccupied investor units. Reflection Lakes is primarily owner occupied or seasonal residents which makes getting a mortgage easier for borrowers. Fees are low and cable TV is included. Lawn mowing is included in the Villa homes and of course all condos.

We enjoy bringing you market stats and timely real estate information that impacts the market each week. To shake it up a bit, we thought every once in awhile it would be nice to update you on what’s happening in a specific community. Stay tuned and one day you just might see your community featured here.

Volleyball Court at Reflection Lakes Fort Myers Florida
Reflection Lakes Volleyball Court

 

 

Basket Ball Court at Reflection Lakes in Fort Myers Florida
Reflection Lakes Basketball Court

Sales Prices Up Over Last Year, Down From Previous Month

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Official sales numbers were released today and median home prices were up 19% over last year, rising from $96,900 in May 2010 to $114,900 May 2011. Prices were down from April 2011 level of $118,900. Transaction volume fell slightly too, down 8% from last year. This is not surprising as inventory levels are down sharply from year ago levels.

Meidan Single Family Home Sale Prices Fort Myers - Cape Coral
SW Florida Real Estate Prices 2009-2011

We have been predicting all year prices would rise, which they have from $88,500 in January 2011. These prices increase are due to lower inventory, and lower priced properties at the bottom end of the spectrum. Median home sale prices are up 29.83% since January, but this doesn’t mean all homes have gone up nearly 30%. It simply means there are fewer homes available at the bottom end of the spectrum.

All through the foreclosure height it was not uncommon to find many $30,000-$50,000 homes in Lehigh acres, and a few in Cape Coral. Last year it became harder to find homes under $70,000 and this year it’s become difficult to find homes under the $90,000-$100,000 mark. When they do become available they are snatched up immediately, or they have significant repairs pending.

A typical $200,000 home, depending on where it is located, may have risen or fallen slightly; however we haven’t seen 30% price swings as the market has stabilized in many sub markets. These price increases are more a function of the definition of media, which is defined as half the sales under and half the sales over a given point. When the lower end disappears it doesn’t necessarily mean there is rise in the moderate to upward end, although it is also possible.

We feel this market will lead from the bottom up. We refer to it as the “Bunching Effect”, a term we came up with several years ago to describe how the real estate market works. The real estate market is not as efficient as the stock market where everyone can look up on the Big Board and see what the value is at any given second. In real estate, market reactions take time, and they don’t always move in unison. One segment may move, and when the market figures out there should be more separation between two segments, another segment will move. Two segments can become too “Bunched” together, and when the market realizes this, it reacts. It is not always done in real time second by second, but it does react just the same.

Buyers look at what they can buy at any given time and they make decisions. For instance, they may be looking in the $150,000 price range and see one home for $145,000 and a much nicer home in same neighborhood for $150,000. In their mind there should be more than a $5,000 difference, so either the $145,000 needs to come down or the $150,000 should be priced higher. There could be multiple offers on the $150,000 home and it may indeed go higher if enough buyers come to same conclusion at same time. If not, the next few homes that come on the market may figure it out. In any event, something has to give. This leads to upward pricing pressure on one or downward pricing pressure on the other until the market finds equilibrium, and so the process repeats itself day after day.

Our job is to watch the market and not focus on any one given sale, but look for trends in the cycle which would indicate movement. Markets can become “Bunched” and they can “Unbunch” This is a natural phenomenon and buyers and sellers can sometimes get too caught up in one sale or one listing on the market and rely on that data as a market trend, when in fact it may just be a single event.

We also need to keep in mind that anyone can list a property for any price. The seller determines the price, but the market determines the value, so be careful not to get caught up on what the neighbor down the street listed one house for.

The market will always speak to you if you’re willing to listen. Under pricing costs a seller equity, and over pricing insures property will sit and may take a lesser price down the road when the listing grows stale. Proper pricing is just as critical to a seller as proper offers are for a buyer. Failure on either end of the spectrum leads to disaster. An over priced home helps sell the competition, and a low ball offer helps another buyer purchase your 1st choice. The real question is, do you want to buy, or do you want to sell. And the answer is, objectively determine what the market really is and go from there.

Happy house hunting or house selling, and don’t be afraid to ask for help. The market is on the move, and figuring out your next move is half the fun.

Tune in and watch our June 2011 SW Florida Real Estate Market Update

Lee County Florida Listing Inventory Down Again

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Throughout this year we’ve been reporting Lee County Florida listing inventory has been going down countywide approximately 500-1,400 units per month.  Well, it happened again this month as inventory levels fell another 382 units which was a 4.38% fall in just one month. The biggest fall was in from March to April when inventory fell 12.66% followed by April to May when it fell 10.90%.  Year to date inventory levels are down 29.3%

Lee County Florida Listing Inventory Down Again
SW Florida Listing Inventory

 

Official median prices are up 35% from January and it’s no wonder when inventory levels are falling so dramatically.  The Ellis Team SW Florida Current Market Index now stands at 3.04 which is at its lowest level since September 2005 when it stood at 2.11 but was on the rise.  The Current Market Index accurately predicts future direction of the market and has been so successful the National Association of Realtors has adopted its own Pending Home Sales Index.  The difference is our index measures more than just pending sales which is why it’s been a leading indicator of where the market is headed.

Back in 2005 we were able to predict a market swing when most everyone else felt the SW Florida real estate market was a runaway train that couldn’t be stopped. We all learned a valuable lesson from that and realize anything can be stopped.  This same indicator has been trending down since September 2010 when it stood at 5.0.  The lower the number the hotter the market is.  Another way to put it, the higher numbers signifies a buyers market and lower numbers signify a sellers market.

 

Now sellers can’t be too comfortable as it doesn’t mean prices can rise automatically as a number of factors have been in play which we’ve documented at length in past articles.  Buyers have been nervous for months as well as they’re quickly realizing they’ve missed the bottom of the market and are frantically trying to get in before prices rise too much more.

The largest mistake we see buyers making today is making offers based upon sales back in January when prices were lower.  We’ve always said you’ll never really know when the bottom is until after you’ve passed it. Buyers realize we’ve passed it, but they’re trying to go back and negotiate back to those bottom prices and it’s not working.  Each time they fail there is less inventory to choose from and they begin the cycle all over again.

Education is so important in any market.  Both buyers and sellers have to be educated to what’s happening today in real time.  So often we see buyers and sellers using old data to influence their positions and desires in the market, and old data can let you down and cause you to miss out, or overpay or overprice depending on whether you’re a buyer or seller.

A seller never wants to overprice in a declining market just as a buyer never wants to lowball in a rising market.  In each case they customer ends up chasing the market in the wrong direction, and when they figure out their mistake it costs them in the pocketbook.

A stock investor cannot count on buying a stock at the same price as it was last month or even last hour as the market changes.  The only beauty of the stock market is its liquid and you only need to look at the Big Board or online to see the stock’s current value in real time.  Real estate isn’t quite that simple as there is no Big Board or stock exchange to look at, but the principles are the same.  Supply, demand, location, amenities, financing, jobs, and the economy all influence the market. Educating yourself to what’s going on today can save you mistakes.

It’s been proven that sellers who overprice end up taking less when it’s all said and done than the seller who prices correctly upfront.  The greedy seller loses market momentum as the listing is best seen when it’s fresh and new to the market.  After awhile it becomes stale and people wonder what’s wrong with it, and then the lowball offers begin, if there are any offers at all.  The wise seller recognizes the market and lists accordingly.

The same can be true with the wise buyer.  They say the early bird gets the worm.  In this case, it’s not always the first offer that gets the prize; it’s the best crafted and educated offer that wins.  Wisdom begins with educating yourself on current market conditions and we hope these stats help you in your decisions whether you’re buying or selling.

Watch Video – SW Florida Real Estate market on the Move

 

Listing Inventory Vs Pending Sales Snapshot

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When you see changes in the marketplace sometimes it’s helpful to put the data into historical perspective to see what trends may be developing if any, and what it all means.  In order to do this, you must first have data from the past.  Fortunately, we track all this data monthly and have for years, so it’s easier to go back and evaluate and identify trends.

 

Fort Myers & Cape Coral Listing Inventory
Fort Myers - Cape Coral Single Family Home Inventory

 

Listing inventory in just Fort Myers and Cape Coral is about the same as it was on January 2006 when it was headed up.  Back then pending sales were trending lower and listing inventory was just about to explode as the height of the market was really about 3rd quarter of 2005.  We still had some residual closings that took place up until December 2005 and into January 2006, but market activity really started dropping off in 2005.  Very few people realized it at the time as many were still busy and not watching the numbers.

 

Pending sales are actually higher right now then they were back then, although they’ve been trending down just a bit as inventory has fallen off.  Increasingly buyers are having a more difficult time scooping up the best buys because inventory has been falling and prices have been rising.

 

We’ve seen an influx of buyers wanting to get in on the bottom of the market, and many are coming to the sad conclusion that they missed the bottom.  Many experts have been educating buyers that they will always miss the bottom because you won’t really know it’s the bottom until you see it in the rear view mirror.  Only then do buyers believe it.  At the actual bottom buyers are greedy and either hope or expect the market will go lower, so they resist buying out of fear.  When they realize they’ve missed the bottom, the react out of fear of missing out on a rising market.  It’s a simple yet basic human emotion called greed, and greed shouldn’t be considered a bad thing unless it dampens your ability to evaluate what reality is.

 

Sellers tend to read headlines that prices are on the upswing and they also get greedy hoping for prices back in the heyday.  We’re not going back to heyday prices, nor should we. Prices were artificially too high back then, just as they’re artificially too low right now.  A market could not sustain those prices back in 2005 because incomes were not in line with the cost of ownership.  Today prices are too low because sale prices are so far below the cost of construction.  This is why we see very few building permits being pulled.  These low prices cannot last forever and will rise in time.  The question is how fast, and how high can they go.

 

We’ve already seen the beginning as median prices have risen over 35% since January in Lee County.  Nobody knows from here on out how much higher they’ll go or how fast as it really depends on future bank owned inventory entering the market, jobs, interest rates, and the overall economy.  All these factors influence the economy and the housing market.  What we can do is continue to provide graphs and show you what is happening in real time.  Armed with this information, and adding it to what you already know about the wildcards influencing our economy, you can pretty much draw your own conclusions and you might be about as right as the so-called experts.  It all begins with accurate information, and from there the analysis is fun.

 

Too often salespeople have an agenda, as in they’d like you to buy something or do something, so they report a distorted view, or at least a view of what they think is going on without real facts to back up their theory.  It’s been a tough 5 years for anyone in  the real estate industry including agents, brokers, mortgage brokers, title companies, attorneys, surveyors, builders, appraisers, etc. I’ve found that even in an up, down, or sideways market there is always a need for quality people in any profession, so you might as well present the facts and let the market decide on the pace and trajectory.  The market wins out every time and we all have to play within the confines of the market.  When anyone thinks they’re bigger than or an exception to the market, the market has a way of explaining things.  Buyers, sellers, agents, banks, etc. have all learned this lesson, so let’s not let history repeat itself, and when it does hopefully it will repeat on someone else.  We’ll keep providing the data we’re looking at, and good luck accomplishing your goals in this market.

 

SW Florida Short Sale Update

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As you can see from the graph, short sales have been on the uptick over the past two year period as lenders have geared up to handle more short sales. It is proven that banks lose less on short sales as the property tends to stay in better condition throughout the process, and the banks spends much less on attorney’s fees and vacancy on short sales than foreclosures.

SW Florida Short Sales
Fort Myers, Cape Coral, Lehigh Acres Short Sales

 

As you may recall, the government came out with programs like HAMP and HAFA as well as others, but none have been largely effective at curtailing foreclosures. You might ask yourself when has the government ever setup a big program that worked as the politicians said it would.

These programs were also mostly voluntary. Some of the banks have realized that selling a home as a short sale is in their best interests, and some must have decided it’s not. We wonder if perhaps banks don’t want to show losses on their balance sheet today, so they’d rather wait and take a bigger loss tomorrow on a foreclosure because the income statement can better handle it in the future. Perhaps the answer to that theory is best answered on a case by case basis.

Some banks have invested significant resources to address short sales. Bank of America for example has trained certain agents and put their entire short sales system online similar to how we work their foreclosure system. The beauty of an online system is that everyone involved can look at the file and upload their piece of information so the bank can make quicker decisions. We’re finding this system works miracles over previous antiquated fax and wait systems, only to find out the bank lost the fax.

Now there is accountability and tracking. Chase is another example of a large bank we’ve had good success with lately. Besides Bank of America, Wells Fargo, ASC, BSI Financial Services, and Nationstar Mortgage have also gone to the online system known as Equator for their processing of short sales. We expect to see significant improvements in the communication, processing, and closing times of the banks that have gone to online processing.

Banks such as Ocwen, SunTrust, and many others have been particularly difficult to deal with and take their time, even when they know the buyer has waited too long and is about to walk from the deal. There just doesn’t seem to be any sense of urgency or accountability at some of these banks and you get the feeling of indifference from them.

Nothing hurts a business more than indifference. A customer can receive bad service, but as long as they feel like somebody cares they’ll still repeat. When a customer feels like nobody cares, bad service is remembered and even talked about. Sometimes I wonder if indifference in tough times will be remembered by customers when the good times flow again and how this will affect these banks business in the future.

Each short sale is different though and even though we may be dealing with a bank, there may be an investor on the backend that just doesn’t want to accept less than the full amount owed. You would think by now most of these investors would look at the BPO (Broker Price Opinion), the appraisal, and the payment history of the borrower and realize doing the short sale may be in their best interest.

Sometimes we blame the banks, and believe me they deserve much blame, but we must remember that they also may be dealing with an investor and they’re just the middle man. It’s always easy to blame the middle man, but a little communication would go a long way in a tenuous process.

Short sales can also be complicated when there are liens on the property such as utility, or homeowners associations, property taxes, or even unpaid workers who worked on the property. Adding to the complexity is when we have to deal with multiple loans or home equity lines of credit, PMI companies, etc.

The short sale process isn’t easy for amateurs. While it is complex, we do salute the lenders who are taking it seriously and utilizing today’s technology to facilitate communication and expediency. It will be nice one day when we never have to do a short sale. Until then, it is the new normal so we might as well master the process, and that includes agents, lenders, appraisers, title companies, lawyers, and everyone involved in an intricate process.

SW Florida Home Sale Prices Up Another 17% in April

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SW Florida home sale prices in Lee County single family home sales shot up another 16.68% over the previous month and were up 17.14% over last April’s figures as reported by the Florida Association of Realtors. Year to date home prices are up 34.35% bucking the national trend.

SW Florida Home Sale Prices
SW Florida Real Estate Sale Prices 2009-2011

Buyers are astonished to see prices rising like this and inventory is shrinking. It should not come as a big surprise though to readers as we’ve been explaining for months why this would occur. It is simple supply and demand. Demand is still high for affordable homes both from prospective homeowners and investors who can actually cash flow properties right now based upon today’s prices and interest rates.

Typically in the housing cycle buyers try to wait until they perceive bottom and then scoop in and buy. Unfortunately you never really know when you’ve seen the bottom until you see it in the rear view mirror. I’m always amazed at the buyers in a hurry after they feel they’ve missed the bottom who low ball properties with one last try to make up for every last penny they were trying to save on the buy.

This makes about as much sense as the seller who over-prices his home by 20% just after the market has turned and headed down. Sellers never want to get caught chasing the market down, and buyers don’t want to get caught chasing the market up.

Unfortunately we’re seeing buyers chasing the market up and low balling offers only to lose out to another buyer and starting the process all over again. Buyers need to realize they’re not in competition with the seller, they actually in competition with all the other buyers out there. Supply of inventory has shrunk so there is less available property to go around for all the buyers out there. If sales go down later this year it won’t be due to lack of buyers, but rather lack of inventory.

We are expecting more foreclosure listings in the future although we’re not expecting a mass dumping of properties here in SW Florida because we believe we’ve seen the lion’s share of the investor properties that flooded the market the past several years. Instead, we believe we’ll see an influx of foreclosures on “Average Joes” who have lost their job or become underemployed due to the poor economy.

If our view is correct, and if we don’t see any major wildcards affecting the housing market, prices could maintain a slow pace upward until we see more inventory. Sellers have no competition from builders because there is little building activity at these price points. That will change once prices go higher, but the question is how long will it take to get to that point?

The outlook for sellers looks brighter unless you’re looking for a return to 2005 prices which isn’t happening anytime soon. Buyers need to decide if they’re serious and look to buy their 1st choice or their 5th choice. You can educate yourself by reading articles like this or speaking with your Realtor about what’s REALLY going on in your market. If you decide to take this advice, you might just have a chance at that 1st choice. If you’re the type that likes the do-it-yourself home study course, you might be looking down the barrel of your 5th choice. Either way, the market controls your direction and you control when and where you arrive.

SW Florida Real Estate Numbers Released Today

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Look for prices to be up in SW Florida about 17% and single family home sales up about 3% over last year. Condo prices in April 2011 will show a 4% rise and condo sales rose 8%.

Look for a detailed report in next week’s article.

Watch our May SW Florida real estate video update

Watch NBC 2 Report on Fort Myers – Cape Coral numbers up versus National prices down

Distressed Sales Now Less Than Traditional Sales in SW Florida

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For the first time in years distressed sales were less than normal or traditional sales, down to 45.26% of all sales in April 2011.

March 2011 saw 901 distressed sales while April produced 683 distressed sales resulting in a decline of 24.2% We had 51 fewer short sales and 167 fewer foreclosure sales in April versus the previous month. Overall we had 163 fewer transactions. Traditional sales actually rose from 765 in March to 826 in April, so the lower distressed sales are helping the overall market.

Foreclosure and short sales in SW Florida
SW Florida Distressed Sales Breakdown

Perhaps this is why official prices have risen over 15% since January. Next week official numbers will be released and we’ll of course be tracking prices. We can say that pending sales are down 9.97% from March numbers, and this can be attributable to seasonality of home sales and falling inventory levels.

March 2010 was the first month in years with inventory of single family homes below 10,000. March numbers stood at 9,785 and current April numbers stand at 8,718. That’s a drop of over 1,000 units in just one month. We’ve been seeing inventory levels drop since February at a rate of about 500 per month, but April’s drop was the sharpest we’ve seen in awhile. To put these numbers in comparison, we tracked 12,669 active listings back in October 2006.

The Ellis Team SW Florida current market Index now stands at 3.14, which is the lowest since September 2005 when it stood at 2.11. It rose to 3.44 the very next month and was a sure sign of what was to come. This Index accurately predicts the future direction of the real estate market. Back in 2005 it began rising which told us the market was in change. Later on the public and media began to see what the numbers were telling us.

Fast forward to 2011 and we’re seeing similar numbers, but they’ve been heading steadily down, which means the market has been shifting from a buyer’s market to a seller’s market. Now don’t get too confident if you’re a seller as the overall economy is still limiting price increases, but this is good news for a market that bled for years.

SW Florida was long known as the epicenter for the housing crisis along with Phoenix, Las Vegas, and California. Today Fort Myers and Cape Coral is actually faring better than many parts of the country, although better is a relative term as unemployment is still high and many people are struggling.

Our market has been in the healing process, and while there is still more healing to do, it’s nice to report a little positive news after years of misery. In fact, people from all over the world have been contacting us recently asking about our market as they’re beginning to read that SW Florida has bottomed and it may be time to get in on the good deals. Our real estate is certainly affordable, and probably about as inexpensive as it’s ever going to be, so people want in on the deals.

It still strikes me as odd though as people from all over come here to buy and they still offer ridiculously low offers when they know full well we’re experiencing a shortage of certain homes in certain prices, and they’ve read that prices are going up. You just have to wonder what makes them think they can low ball in a rising market.

I think the answer is greed, and unfortunately it is this same emotion that got us into this mess years ago, and it is this same emotion that will prevent certain people from buying in this market as they’ll always be in search of the deal from last year, ignoring what is occurring in today’s market.

I’ve always said, if you wanted to sell in 2005, you had to price it right and actually sell it in 2005, not 2006, 2007, or 2008. And if you want to buy today, you have to step up and get a great deal in 2011. You missed 2010 pricing, and if you’re not careful, you’ll miss 2011 pricing. Today’s pricing is still far below replacement cost and is artificially too low, however it looks like we’ve bottomed and are moving up, and it’s a little late to go for blood when the wound was bandaged months ago.

SW Florida 1st Qtr Home Sales 2nd Highest on Record

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Most people refer to 2005 as the boom times for SW Florida real estate, and ask when we’re going to return to those days. I guess the partial answer is we’ve not only returned top those days, but we’ve far surpassed the boom times, at least in terms of transactions.

2009 was our busiest year on record followed closely by 2010, not the year 2005 as many people would guess. 2005 produced 12,273 single family home sales compared to 15,205 in 2010 and 16,260 in 2009. In the 1st quarter of 2011 we had 3,819. As you can see by the attached chart, 2nd qtr almost always produces the highest sales volume, followed by quarters 3 and 4. Most people mistakenly believe that season results in the highest number of sales.

Lee County Florida Single Family Home Sales Chart
SW Florida Homes Sales By Qtr

Season may lead to some of the sales that result in the 2nd quarter, but that wouldn’t explain the strong 3rd quarter sales. Remembering back to the 1980’s our biggest closing months were generally in the summer. We usually found a lot of lookers in the season and many of those would come back and purchase in the summer. Additionally a lot of locals had more time to shop and buy in the off-season.

SW Florida real estate isn’t as seasonal as many would think, although condos do still lend themselves to more seasonal traffic, especially 2nd home purchases.

Depending on inventory, 2011 is on pace to place in the top 3 for all-time sales. Prices have risen 15.14% since January, and Lee County is one of the few markets actually gaining in price. It could be that Lee County was hit so hard due to high concentrations of investor homes that banks liquidated so much in the early years, and prices fell too far and too fast. Prices have fallen so far below replacement cost that virtually all building has ceased, and that’s a sign that the market has been artificially too low.

As the rest of the nation enters a housing pullback, SW Florida is showing signs of bucking that trend. Will it last? That answer ultimately depends on jobs and the economy, as well as future foreclosure inventory that may come to the market.

Foreclosure inventory can appear in two ways. First off we have a backlog of homes that began the process but were held up due to legal concerns in the foreclosure process. A few large foreclosure mills were processing foreclosures and collecting big sums of monies from the banks without doing the proper paperwork, and banks have had to start all over again on those proceedings.

Secondly, Florida is a tort state, or what is referred to as a lien theory state, so it takes longer to foreclose than other states. As the economy has deepened, it has affected more people who weren’t investors, but got caught up in the bad economy and perhaps lost a job, had trouble collecting money from people who owed them money, etc. Because Florida has high unemployment, it’s natural to believe it will have higher foreclosures than other states.

The big wave of foreclosure has already occurred, and Florida has largely worked through this, except for perhaps South Florida in the Miami/Ft Lauderdale areas.

The wild card will be how many foreclosures hit the market. Right now we’re not seeing many and its forcing prices higher. At our current sales pace, we will eventually run out of inventory. The question and always has been, how many more listings will we see when banks are able to release inventory, and how many would be sellers will sell once prices reach the point where they can afford to sell. Inventory and the economy will drive this market, and nobody knows the answer to both these issues. As soon as these issued become apparent, so will the height and velocity of our market. Stay tuned and we’ll watch it together.