The Ellis Team SW Florida Real Estate Current Market Index for June 2009 shows another slight improvement, down from 3.99 to 3.92 Remember, the lower the Index number, the better for sellers, and if you’ve followed this index for any length of time you’ll discover that it’s been very accurate forecasting the foreward movement of the Fort Myers real estate market and the Cape Coral real estate market.
Ellis Team SW Florida Real Estate Current Market Index June 2009
Inventory fell from 12,579 last month to under 12,000 for the first time in a long time. Inventory levels have been falling for awhile and pending sales have remained relatively stable, helping to draw down inventory levels. Cape Coral inventory levels are very low, but so is Lehigh Acres copared to the pending sales. Lehigh Acres has traditionally followed Cape Coral, and as the Cape’s prices have gone up in the entry level home market, Lehigh Acres demand has increased, just like in the run-up of the roaring 2000’s.
The Ellis Team are Top agents at RE/MAX Realty Group in Fort Myers Florida and study the SW Florida real estate market in great detail.
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We’ll repport back and let everyone know how long it took to reach this goal, and the effects of viral marketing online via Social Networking. Thanks for particpating Facebook users.
SW Florida real estate sales in Fort Myers and Cape Coral Florida set new records again in May with single family home sales in Cape Coral and Fort Myers totalling 1,417 sales, eclipsing the May 2005 sales record of 1,309. See SW Florida Real Estate Homes Closed 2005-2009 chart illustrating home sales by month since 2005. Median sales prices for single family homes in Cape Coral and Fort Myers was up 3.51% from April median home prices, up to $88,500. For a complete look at median single family home sale prices in Fort Myers Cape Coral since 2005, see the SW Florida Real Estate Sales Prices 2005-2009 graph.
Prices are still falling in the mid to upper levels of the SW Florida real estate market, while prices seemed to have stabilized in the entry level market. First time home buyers are buying as fast as they can as they compete with investors for the best bargains. Short sales are picking up as banks cut through the red tape of approving short sales, although time frames are still long. Canadians are buying properties in SW Florida due to the favorable exchange rate, and the fact that Florida is on sale.
Fort Myers Cape Coral Real Estate Sales Soared
Condo sales for May in Cape Coral and Fort Myers were up 41% Vs. the State of Florida which was up 21%. Median sales prices for condos in SW Florida were down 35% year over year, as opposed to the statewide average of down 38%. See the Florida Sales Report May 2009 Existing Condos graph.
It looks like the 2nd Qtr is shaping up to be another record setting quarter for home sales. The 1st Qtr home sales in Lee County Florida sure was. We won’t know for another month when June sales are officially released.
Shortly we’ll be releasing the latest Current Market Index for Fort Myers and Cape Coral for June which should explain where our market is headed.
Be sure to tune in this week on AM 1240 in SW Florida, and AM 1270 in Collier County, The Future of Real Estate presented by The Ellis Team at RE/MAX Realty Group in Fort Myers, Florida. The show is also re-broadcast on our Radio Show page
This week’s topics include:
Property Tax Lawsuit Against Lee County Property Appraiser Ken Wilkinson
State Farm Insurance Possibly Staying or Leaving Florida
Hot Properties
4 Amendments on Florida’s 2010 Ballot
Florida’s Recently Released Housing Statistics
Buying Opportunities in Real Estate Due to Market Conditions
Interest Rate Update
Listen in, and if there is something you’d like discussed, leave us a comment.
Lee County single family home sales sold at a record pace for the 1st quarter of 2009, eclipsing the 1st Qtr of 2005. This follows the 4th Qtr of 2008 which was the second highest quarter on record, taking a backseat to you guessed it, 2005.
The bubble burst of years past has actually helped make homes affordable again, and combining that with a $8,000 first time home buyer tax credit in effect until Dec 1, 2009 and low interest rates, and median prices as low as 1997 prices, you’ve got a perfect storm again for dramatically increased home sales. We believe 2nd Qtr home sales in Lee County will again be very strong, however home sales could slow later in 2009, but not for the reasons you might imagine.
Yes, interest rates have been climbing almost as fast as the price of oil, and both can negatively impact home sales. The real reason home sales may decline in the 2nd half of 2009 may be that inventory is drying up. In the coming weeks we’ll present some inventory graphs that will illustrate exactly what is happening with inventory. You would think that as inventory declines, prices would go up, and that is typical in a real estate cycle. I think this cycle could be different. For years, buyers have been conditioned that prices are going down and to wait for the bargains. Buyers are just now getting the word that the bargains are disappearing and many are fighting with other home buyers to get the few bargains available. Some buyers however, haven’t gotten the memo, and are still making offers at or below asking price, and they wonder why they’re missing out on house after house. They’re not properly educated on what is actually happening in real time.
Jobs are not growing yet in SW Florida. Right now we have investors coming in and scooping up the bargains and competing with home buyers because sales prices are so far below replacement cost builders can’t afford to build. These prices are an anomaly and will not stay at these low prices forever. This all leads me back to why I believe home sales could stagnate in the 2nd half if lenders don’t keep the foreclosure pipeline streaming.
There are two schools of thought on where prices are headed. First is the old Supply Vs. Demand theory, that as inventory levels drop and buyers feverishly buy, prices automatically will go up. In fact, we are seeing evidence of this occurring in certain segments, particularly waterfront and entry level Cape Coral homes. Prices have bounced off the bottom and have been on their way up since last year.
The other school, and this theory is just my own and not economically tested, is that prices are so far below replacement cost, buyers have become conditioned to buy so long as it’s a bargain. What happens when the bargains are gone and prices begin rising? Will buyers buy in fear of prices tomorrow being higher than prices today? Something tells me sellers will be staring down the buyers with a “gotcha” type mentality because sellers have taken it on the chin for so long. Buyers may look at the sellers and say “You don’t have me, I’ll just sit back and do nothing now that it’s no longer a Deal.” And hence the stare down begins, and the question becomes, who blinks and how long does it take? We saw some evidence of this after Hurricane Andrew on the East coast. Transactions slowed as buyers faced with diminished inventory couldn’t accept right away the new pricing the market brought to bear, and the stare down game began.
We do have some foreclosures backlogged in the system, and we’re going to need them to be released. They all have to sell anyway, and the longer they sit vacant the more the properties deteriorate from lack of maintenance, storms, water damage, vandalism, etc. This leads to additional costs on repairing damages. Nothing good can happen with a vacant foreclosed home in a neighborhood, so the process of foreclosure and getting a new end user in actually helps the healing process of the market, and until we complete this process our market will not be healed.
Ultimately the wild cards are how many foreclosures will come to the market, and when will employment in SW Florida rise. Pricing will most likely follow both events, and to some extent interest rates. Interest rate increases cut into the buying power of buyers, and many first time home buyers are tight. The other factor will probably be public perception of the overall economy and how people feel about their job and their overall financial situation. The market’s ability to assess and discern what is truly happening in the real estate market, without all the fluff, will go a long way to determining when prices will start rising again and how quickly.
So the SW Florida real estate market is currently setting sales records. In the coming weeks we’ll do our best to break down by segment exactly what is happening in our market and what it could mean going forward.
The Ellis Team is looking for a person or persons with strong people skills and proficient in Internet lead management, e-mail, and database management. This person will be a good listener and preferrably will be a licensed agent or willing to obtain license. This candidate will have knowledge of the SW Florida Real Estate market, and is good on the phones.
If a job like this sounds interesting to you, send an e-mail with your resume to coordinator@topagent.com
Home sales in the SW Florida real estate market set an all-time record in April 2009 with 1,468 single family home sales, eclipsing the mark set in March of 1,464. Sales are literally off the charts as affordability is in the market. In fact, median home sale prices in the Fort Myers Cape Coral area fell by 3.39% last month down to $85,500, down from $88,500 in March. For a comparison of monthly home sales in SW Florida from 2005-2009 see the latest Fort Myers Cape Coral home sales chart.
Median prices in SW Florida are down 57% from last year, down from $200,300 to $85,500 Median single family home sale prices have fallen every month this year except for February when they went up 2.74% See our SW Florida Real Estate Month Over Month Prices chart. To illustrate just where median home sales prices are today Vs. where they have been every year since 2005, visit our SW Florida Real Estate Sale Prices 2005-2009 chart.
Condo sales in the Fort Myers and Cape Coral area were up 7% over last year, and probably would have been much higher if FNMA hadn’t changed financing rules making it increasingly difficult to finance most condominium associations throughout SW Florida. It used to be we worried about whether or not the buyer was qualified for a mortgage, and this past year we learned it was much more difficult to get a condo association approved than it is to get the buyer approved. Banks have over-reacted and will cause further problems in the condo market going forward, which may actually increase delinquencies as existing owners will not be able to refinance or sell to anyone other than a cash buyer.
Condo median prices in Cape Coral and Fort Myers fell 33% from $195,500 last year to $131,800 this year.
Statewide single family home sales were up 18% and median home sale prices were down 31%, and condo sales were up 21% and median condo prices were down 40%. As you can see, Fort Myers and Cape Coral are leading the state, as our home sales are up 81% over last year compared to the statewide average of 18%. SW Florida condo median prices were down 33% compared to the state average of 40%
Below is a graph of inventory levels in just Fort Myers and Cape Coral since 2004. The blue line is the active inventory listed in MLS and the orange line is the pending sales listed in MLS. As you can see, back in 2005 there were as many buyers in the marketplace as there were sellers trying to sell.
Listing Inventory in Fort Myers and Cape Coral MLS
These figures do not include all of Lee County Florida, but rather just the Fort Myers and Cape Coral areas of Lee County. At the end of the graph you’ll see a slight increase, but this is due to us switching MLS systems and including slightly more data. We’ll watch this trendline from here on out but we can say inventory has been decreasing for months and foreclosures have not been keeping pace with the record sales we’re experiencing here in SW Florida.
Bank foreclosure agents we’ve spoken with all are noticing a decrease in bank foreclosure inventory. The Ellis Team has sold much of it’s bank owned foreclosure inventory and have just about 6 left. We expect more in the future, but as of right now first time home buyers, second home buyers, and investors have scooped up all but 6 we just received. The 6 bank foreclosures have bank financing available at 4% interest with a 7 year balloon and 5% down for a primary buyer, and 6% interest and 20% down for an investor, or buyers can obtain their own financing.
May 2009 Ellis Team SW Florida Real Estate Current Market Index
The Ellis Team May 2009 SW Florida Real Estate Current Market Index shows relative stability. We switched the way we compile the data for this report, and it looks like the index held steady at 3.99, up slightly from 3.72 the month prior. All signs point to big sales ini April once they are released. We are tracking over 1,400 single family home sales in April, which far exceeds sales from last year.
In the coming days we will be releasing a Fort Myers-Cape Coral inventory chart which will show available inventory in just those areas, as well as pending sales activity. Lee County overall single family inventory stands at 12,579 which is up slightly from last months number of 12,356. Again, we switched data compilation sources and we now feel we’ll pick up a few extra listings by making the change, so it’s possible inventory didn’t really increase at all.
First time home buyers hoping to take advantage of the $8,000 tax credit are competing with investors trying to scoop up bank foreclosure bargains. Pending sales currently are running high, and might even be higher if we weren’t running out of foreclosure inventory. The lack of foreclosure inventory may lead to reduced sales going forward if foreclosures do not pick back up again soon. Some think the banks will be taking possession of more foreclosures soon as they work through the process, but less are being filed each month.
That is the question WINK News asked. WINK interviewed Brett Ellis and wanted to know how bank foreclosures were affecting the local SW FLorida real estate market. See WINK News report Local Housing Rebound? Bank foreclosures are drying up, and first time home buyers are competing with investors for these good deals. Inventory levels have continued to fall as home sales break all-time records. Because builders are not building right now, it will be interesting to see what happens if we don’t have a continued pipeline of affordable bank foreclosures to sustain buyers insatiable appetite for housing in SW Florida.
Brett also did a newspaper article with the Fort Myers News Press about how Lee County’s Meltdown Turns Golden for home buyers. Agents are amazed at how far prices have dropped, and perhaps they have over corrected. Listing inventory has fallen sharply in hard hit areas like Cape Coral, and Lehigh Acres is seeing a resurgence in home buying activity as buyers jump from Cape Coral in search of affordable houing in SW Florida.
Here are a few ways to search for bank foreclosures on our website:
