Last week I had the pleasure of presenting the residential market outlook to the CCIM (Certified Commercial Investment Member) Real Estate Outlook Conference.  This conference is comprised of the Top commercial specialists in Charlotte, Lee, and CollierCounties along with community leaders like Mayor Randy Henderson of Fort Myers, Jim Nathan president of Lee Memorial Health System, a VP from Hertz, and Wilson Bradshaw president of FGCU among others.

The commercial market lags the residential market.  Residential went down before commercial did and therefore came out sooner.  CCIM experts were happy to report commercial is again on the rebound.  2013 was a very good year for residential properties which bodes well for commercial going forward.

Home Sale Prices Rising Nationwide

Nationwide housing prices rebounded in December quite nicely over the previous year.  Detroit saw the largest increase in the RE/MAX national housing report followed by Las Vegas.  Fort Myers came in with a 24% median price increase in December, and for the year Lee Home Sale Prices Rising NationwideCounty saw a 28.31% gain over 2012 numbers.

In December there were reports nationwide of a slowdown in home sales but many states have reported this may have been a weather related issue as treacherous weather has wreaked havoc on airlines, schools, and businesses up North this year.

The North’s bad weather could be SW Florida’s good fortune as we have seen in years past bad weather up North leading to more home sales down here.  In fact, yesterday I heard Carnival cruise lines announced they sold more cruises in January than any other month in history.  With blizzard conditions this week and forecast conditions again next week, this might be the last year for some suffering through this weather.

Lee County is working on bringing more companies to SW Florida, and with record breaking bad weather, maybe we’ll attract entire companies rather than just disgruntled homeowners looking to make a change. This would be huge as we’d be adding jobs to the area to go along with increased residents.

While the SW Florida real estate market may not see 28% price gains this year, 2014 looks to be on track to be another great year. If another company or two like Hertz or Gartner decides to relocate here it could turn into a fantastic year.

We’ll be keeping our eye on several wild cards which could affect our market.  Weather up North is one of them, along with the national housing market, interest rates, the overall economy, consumer confidence, business hiring and unemployment, and company relocations.

Realistic sellers have an excellent chance to sell their home right now.  We have seen some over-pricing occurring in this market and we’re watching these listings sit on the market.  A Seller’s market is an excellent time to sell but not a license to over-price.  Over-priced homes do not sell.  Believe it or not, back in 2005 and 2006 many sellers failed to sell because they were greedy and missed an opportunity.  Oh my, would they love to have those days back!

If you have a home to sell, call us at 239-489-4042.  We can help.  If you’re a buyer, it pays to work with someone who knows the market.  To search the MLS go to www.TopAgent.com

Good luck and Happy Selling/Buying!
To search the MLS for properties go to www.TopAgent.com or give us a call at 239-489-4042 You can even search for waterfront property in Fort Myers, Cape C oral, or all of SW Florida    Good luck and Happy House Hunting!!!

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Brett Ellis Bio

 

It seems these days everyone’s got a quick and easy theory on how to price a home, but many are filled with errors that will either cause you to under-price your home, or over price it. Neither is good, because under pricing it means you’re just giving your equity away to the new buyer, and over pricing it means it will sit on the market longer and perhaps never sell. Statistics show that homes that are over-priced tend to sit longer and the seller ends up taking less because the market wonders what is wrong with it when it sat so long. Top Tips for Pricing Your Home in Today’s Market.

Top Tips for Pricing Your Home in Today’s Market
Top Tips For Pricing Your Home in Today’s Market

Here are some tips to consider:

  1. Don’t go by the property appraiser’s assesses value- I’ve talked to several property appraisers over the years including our own Ken Wilkinson. A property appraiser from IL told me it’s not the property appraiser’s job to value a home correctly, but rather simply it’s their job to value it fairly. There is a big difference. Because property appraisers use a mass appraisal system, they’re trying to price all homes fairly. Obviously if they could price each home at market value that would be wonderful, but they appraise hundreds of thousands at a time without going in the property, so it’s all done in relation to every other property. There can be a wide margin for errors with this system, and thus why there is an appeal process if you believe they’ve made an error. It’s amazing how well they do county-wide, and yet we can’t rely on any one valuation to be absolute. There are variations on many properties.
  2. Sites like Zillow provide Estimates. In fact, they call it a Zestimate, but it’s only that, and I’ve seen the valuations vary widely in just a matter of days. They use an online computer model, but again this model doesn’t visit the home, see inside, evaluate the condition, etc. They may look at all homes in a subdivision or street, but here in SW Florida there can be wide variations from street to street. Picture a riverfront home compared to a home 100 ft away across the street, or a golf course lot versus off golf course.
  3. Be Wary of Price Per Foot- I could show you two identical 2,000 sq ft homes from a builder. One is built with a pool, the other is not. One is on a waterfront lot, the other not. You should know Why You Should Contact a Plumber If You’re Experiencing Low Water Pressure. One upgrades the kitchen, adds a 3rd garage, upgrades carpet, cabinets, etc, and the second remains plain Jane. Obviously the pool and the lot location affect the price per square foot, so the square footage doesn’t really mean much. You could have a home built in 1952 sitting next door to a stupendous home built in 2012 with all the new hurricane protection, wiring, plumbing, roof, etc.
  4. Study the Appraisal- Appraisals can be ordered for different reasons. It could be ordered for resell, refinance, estate value, eminent domain, taxation, etc. The scope and purpose can affect the value. If the bank sees you’re a great credit risk, it’s possible a refi appraisal could come out higher than a resale appraisal.
  5. Be Careful Valuing Amenities- Just because you put an upgrade in the home 20 years ago doesn’t mean it has much value today. I recall back in the late 1980’s going to a seller’s home on Wren Rd in San Carlos Park. Back at that time homes were selling on that dirt road for $30’s. The seller added a $20,000 pool and expected over $50,000 for that home. It’s true, if you add value to pool cost you would think it would be worth that, but a $22k pool to a $30k home buyer is an extravagant amenity they cannot afford. That’s roughly 50% of the house value which was considered an over-improvement for the area at that time. It’s possible that pool had little to no value in that price range at the time. FHA wouldn’t even give value to a sprinkler system there as it was considered an over improvement.

It pays to value a home correctly the first time, as the market has a way of speaking in the end. The sooner you listen to the market, the better off you’ll be. It pays to work with a seasoned agent who can help you price your home using sound methods. On paper you might be able to make it come to what you want, but does that do you any good if a buyer won’t pay that, or a lender won’t lend that much. Be realistic. No matter the market, up, down, or sideways, you will always find those that over price and find a way not to sell. And even in the ugliest of markets’ homes do sell, because sellers price it at today’s value, not some number they need, nor a number from the past.

Remember, the market never cares what you need for your home. The market only cares if it’s priced correctly, and if it matches the buyer’s needs. Good luck, and happy home selling.

As we’ve been reporting in our weekly article, we expected sales to be down as pending sales have been declining.  We also expected prices to be higher and in fact official SW Florida single family home median sales prices released this past week were up 4.11% over October’s prices and up 20.11% over last November’s price.

Median Sale Prices 2011 SW Florida
SW Florida Median Single Family Sale Prices

Everyone wants to know what kind of year 2012 will be, and what kind of season it will be.  Nobody can predict the future with absolute certainty, so we have to look at clues as to what will drive the market going forward.

Homes Closed in SW Florida 2009-2011

There are opposing forces in play affecting our market, and each one can have an influence,  The question will always be how much influence will each force play and to what degree?

  1. Overall economy-It is weak and this is an election year.  In previous election years activity slowed as people weren’t sure of the outcome and its effect on tax strategies and the government’s effect on the economy.  The housing market likes a pro growth government.
  2. Employment-More jobs eventually equals more disposable income in our local economy, which spurs home sales.  Unemployment is still high in the area, so we’d like to see jobs.  One such employer might be a casino, or perhaps a company that may relocate to our area.
  3. World Markets-People wonder what the trickle effect would be to the US economy and value of money should Europe’s debt crisis spill over.  Europe is working on their debt crisis and the US is helping, but we can’t seem to get our own debt crisis in order, so I wonder what influence we have to help them when we can’t help ourselves.
  4. US Credit Ratings-Could we be in for more downgrades?  Some think so, and it could raise the cost of borrowing
  5. Interest Rates and Availability of Credit- For now they are low, so anyone that can afford to buy now should.  Prices are rising and rates are at all-time lows.  Banks have also tightened standards, perhaps too much, which affects sales in the mid and upper ranges.
  6. Inventory-Inventory has been rising the past 4 months but ever so slightly.  It’s been rumored the banks have more inventory to unload in 2012, so we’ll be watching to what degree and how this affects the market
  7. Volume- Sales have been falling as prices have risen.  We set all-time records in 2009 as prices were at rock bottom.  Our market has definitely moved off the bottom, especially at the first time home buyer end.  Many properties still make sense on a cash flow basis; however fewer investors are buying because the rock bottom deals are gone.
  8. Correctly Priced Inventory- We have less distressed sales on the market, which is good.  However, inventory is rising because not every home is priced where buyers are willing to buy, so they sit on the market.  This is nothing new.  It just illustrates we are still in a price sensitive market.  If you overprice a home, it will sit.  If you price it at market, it will sell.
  9. Season Begun Early- We saw our Northern friends start their search earlier this year.  The beaches and roads are packed.  The weather up North is cold.  Baby boomers aren’t getting younger.  Many like the deals they’re seeing and many are saying this is the year they’re going to pull the trigger and buy.  Florida has been on sale for a few years now and buyers see the rising prices, giving them confidence the worst is over.
  10. Greed-Greed isn’t always a bad thing.  It’s emotional feeling people use to guide them to buy or sell.  It’s the reason sellers overprice, and it’s also the reason buyers buy.  A transaction won’t happen if both buyer and seller are operating from the same emotion.  The answer to this emotion is facts, data, and logic.  If a seller prices appropriately, buyers will buy because they fear prices will be higher in the future, and they don’t want to miss the boat.  They will not overpay though unless they’re convinced prices for home will be higher.  Greed is one emotion fueling buyers to buy today.  If a property is priced at market, they are motivated to purchase.  If a property is overpriced, it forces the buyer right back on the fence.

 

All 10 factors are in play.  Only the future knows how each factor will affect the market.   There are probably a few wild cards we haven’t mentioned as well.  All we can do is watch together.  Enjoy 2012.  We think it could be a good year.

 

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We like to include charts to illustrate latest trends in the SW Florida real estate market.  For years we’ve tracked numbers and reported the upside and the downward trends in the market.  For the past year or more all market trends have been to the upside.  Preliminary numbers gathered by the Ellis Team indicate single family home listing inventory in Lee County went up for the first time since January 2011.  Granted, back in January single family home inventory was 34.54% higher than it is today, but this past month is the first time we’ve seen inventory rise in months.

SW Florida Single Family Home Sales
SW Florida Single Family Home Sales

Listing inventory only rose 43 units which accounts for about .5%, so it’s not an alarming trend, just a slight change in direction we’ll keep our eye on.  Due to space constraints we didn’t include that chart; however we’d like to draw your attention to the SW Florida Sales Chart and the Pending Sales Chart.  Both these charts support findings in the inventory levels.

Sales in SW Florida have been falling since March which isn’t out of the ordinary the past several years.  What’s interesting is that September 2011 sales are slightly behind 2010 levels, but not by much.  Again, it’s the direction of the change, not the actual numbers we’re looking at.

Pending home sales Fort Myers Cape Coral Lee County Floirda
SW Florida Pending Home Sales

Pending sales have also fallen since March.  This confirms that pending sales are an accurate indicator of future closings.  While it makes perfect sense, sometimes in life what appears to make sense doesn’t always match reality, but in this case it does match. For months inventory levels have gone down and many have speculated that’s the cause of decreased sales.  We think there is a lot of truth in that.

Listing inventory just went up this past month, so does that mean sales will go up?  When official numbers are released next week we don’t think so.  We think they’ll mirror what we’ve been reporting and will be down slightly from the previous month.  So if inventory has been a legitimate reason sales have fallen, why wouldn’t the increase signify increasing sales going forward?

The answer is it could, but there are other factors.  We must look at the mix of inventory as well as other factors.  The mix refers to traditional sales versus foreclosed homes and short sales.  Not all short sales close, and their timing is anything but predictable.  Foreclosure inventory looks to rise some in the 4th qtr of this year and more in the 1st qtr of next year.  If this bears out, sales will almost assuredly be influenced by the exact number hitting the market as there is a large appetite for foreclosed bargains.

Other wild cards influencing the market are the availability of credit. Banks are requiring buyers to jump through more hoops and regulations than ever. The new Dodd Frank Act is making it more difficult to close even approved loans.  Regulations have become burdensome and making it impossible to meet certain deadlines.  We always say time is of the essence in our contracts, but that’s not the case as Congress has changed so many regulations for the worse.

There are waiting periods for HUD closings statements to be approved, so if there is any little change, all prorations of fees may need to be re-approved. If a buyer selects a different rate or program, the bank must re-disclose everything and a new waiting period begins.  This makes it difficult to meet certain deadlines in short sales, and many times that property is foreclosed instead of a successful sale because Congress saw fit to add additional layers and slow everything down.

Congress always has good intentions, but they don’t use their head.  Loans take hours to underwrite now and certain loans banks don’t even want to mess with because of the new regulations.  This hurts certain segments of the market.  I hear almost everyday complaints from loan officers on how tough their industry is.  Of course, lending affects our industry, and real estate affects the economy.  Sometimes I wish Washington DC would listen to people in business and get out of the way.  We’d all be better off if they regulated less and let business do business.  That’s the way to create tax revenues.

While we can’t control Washington, we can keep our eye on Main Street.  Main Street is ok in SW Florida, and we’ll continue to monitor.  One month doesn’t make a trend.  We’re simply reporting a slight change in direction, and we’ll watch the trends going forward to see what sticks.  If we can help you with your real estate needs, don’t hesitate to call 239-489-4042 or visit our website www.Topagent.com

 

Brett Ellis appeared recently on NBC’s Today Show on April 19, 2009.  The report focused on housing deals in SW Florida and if now is the time to buy.  One Realtor talks about the buying frenzy and the bank foreclosure deals to be had presently in SW Florida, but time is running out.

Additionally, the report focuses on the $8,000 tax credit, and buyers competing with investors for the bargain buys. Brett Ellis of the Ellis Team at RE/MAX Realty Group in Fort Myers stands in front of a home that is priced 1/5 the price of what it sold for just a few short years ago.  Because of the tremendous buys, many buyers are bidding on properties.  One buyer in the report bid on 14 properties until they were successful.  The best bargain buys go quickly and many receive multiple offers, so you have to act quickly and have your ducks in a row.  This means getting pre-approved for a mortgage through the correct lender, and using all the forms the seller requires and filling them out correctly.

There are tips to being the successful bidder, and experienced agents in the foreclosure business know what these tips are.  Listen to the advice you receive from your agent, and if they tell you there are multiple offers on the property, believe it.  It’s far better to get your 1st or 2nd choice then your 15th.

Contact the Ellis Team at RE/MAX Realty Group in Fort Myers for bank foreclosure buys in Cape Coral, Fort Myers, Lehigh Acres, and all of SW Florida.

800-860-4042

Visit our website Topagent.com