Tag Archives: Cape Coral Florida home sales

What Price Ranges are Hot?

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Last week we reported that home prices were down the past few months but not to get too concerned as they were expected. This week we provide a graph that illustrate median home prices and average mean home prices so you can see what we’re talking about. What Price Ranges are Hot?

What Price Ranges are Hot Median and Average Fort Myers Cape Coral Florida home sales

Each year our home prices increase in season because we have more affluent buyers here purchasing more higher end properties than we do other parts of the year, and this pulls the averages up and sets the tone for the year. When we have bad seasons we really have to watch the summer months to spot any meaningful trends. Last season was another good one, so we’ve had a few good ones in a row,

It’s not unusual for prices to retreat after the season, so we look at year over year prices out of season and we see prices are still up over last year by the same percentages as they were in season, so we’re fine.

Now let’s delve into which price ranges are hot. As you can see from the price range chart, the $400,000 $599,999 range is the hottest with a 82.5% gain. This is not only true for the July 2013 data but also many months prior, so we can definitely say the $400-600k range is doing well. Really all the price ranges except for maybe the $300,000-$399,999 range is doing particularly well. This could be for the same reasons the less than $100,000 range isn’t doing well. We have little to no inventory anymore at the lower price range. They’ve graduated up, so those same sales are occurring in the higher ranges. It’s entirely possible many of the $300k+ range homes have graduated into the $400k= range and thus more homes are selling in that range.

Fort Myers real estate sales by price range Cape Coral

I tend to think some of that is possible, but more likely we’re seeing strength at the bottom of the market and the upper middle of the market as those that can afford $400-600k either have local businesses on the mend in SW Florida or they are out of town buyers buying second home and retirement homes.

We are also seeing some relocations coming into the market and buying property, although companies like Hertz are recognizing that fewer existing employees took the relocation offer and instead their recruiting and hiring more outside employees to take jobs here in SW Florida.

Hertz will hire some locally, however many are coming here and being recruited from other companies with certain specialty education and job history in the field. It doesn’t really change how many people Hertz brings in but it does change from where they bring them. Less of these employees coming to Hertz are actually from Hertz.

Last November we started seeing spikes in the average sale price in Lee County Florida and it wasn’t until February of 2013 before we saw significant price swings here in SW Florida, so we may have a few months more to go before we start seeing if a new price trend emerges for next year. Inventory is still tight, so with any economic luck we’ll be in for another good season, assuming we have enough inventory to sell this upcoming season. Feel free to search the MLS at TopAgent.com. Good luck and Happy House Hunting!!!

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Sales Up and Prices Down

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Last week we wrote that pending sales were up which may be a sign that closed sales might increase in August over July, and in fact sales were up 4.74% over the previous month.  We also posted that pending sales were down 19% from last year, and official numbers just released show actual closed sales were down 4.71% from last year. These are not stellar numbers, but keep in mind July sales were down 27.45%

Fort Myers, Cape Coral Single Family Home Prices 2010
SW Florida Single Family Home Prices

Sales could be up because median prices fell again 5.45% from the previous month, and 1.01% from last year.  By the attached chart you can see that home prices peaked in April of 2010 as opposed to reaching the bottom last April.  Home sale prices have now crossed over and fallen behind last year’s numbers.  This is a telling sign, and one that is playing out all across America as the real estate market has stalled along with the economy.

Homes Closed in Fort Myers- Cape Coral
Single Family Home Sales 2006-2010 Fort Myers, Cape Coral Florida

Transactions pick up as prices go down, but we’d like to see more stability in the market.  The median home price factor is more of an indication of affordable priced inventory as 1st time home buyers and investors are snapping up entry level homes as fast as they come on the market, and less inventory means fewer sales.  We’d like to see more sales in the mid and upper price ranges before we can say we have a healthy market, but we don’t hear anybody calling this a healthy market just yet.  Even though 2010 shapes up to be the 2nd best year on record for closed home sales, there is not broad support across several submarkets to call it a healthy market.  If it was strong we’d see rising prices.

The good news is prices have held fairly stable except for a temporary run-up, and season is again right around the corner.  Oil did not make it to SWFL, and today’s prices could again lure many from up North to purchase this season.

We’d like to see our government get back on track and offer incentives to get our economy and real estate market back on track, but that may have to wait until after the November elections as the current administration just doesn’t get it.

Real estate is traditionally about 32% of GDP and Main Street and the economy are married for better or for worse.  It’s hard to cure one without the other, and yet we don’t seem to be doing anything to help either.

In the meantime, interest rates are at record lows, affordability is at record highs, and buying power has never been better, so anyone who is qualified to buy is in good shape.  If the banks were to release more inventory, look out as this market could take off again.  Failing that, we may be in for status quo numbers for a few months until some questions are answered in the elections and the job market turns around.

2009: Housing Bust or Housing Boom in Sw Florida?

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2009: Housing Bust or Housing Boom

Its official, the 2nd Qtr of 2009 set the All-Time record for single family home sales, eclipsing the 2nd Qtr of 2005 by a wide margin.  Many people don’t realize that the 1st Qtr of 2009 also set the All-Time home sales record, and the 4th Qtr of 2008 was nearly a record.  Home sales in June were up 137% over 2008, a trend we’re seeing regularly throughout SW Florida.

 

Fort Myers and Cape Coral Single Family Homes sales by Quarter
Fort Myers and Cape Coral Single Family Homes sales by Quarter

The reasons sales are up are numerous.  SW Florida has received much International attention which has drawn interest to the area.  We’ve sold many more homes this year to Canadians who can now afford to buy some sunshine at affordable prices.  We’re also selling more homes to people from up north to use as a second vacation home, another encouraging sign.  Perhaps the two largest segments of buyers right now are the 1st-time home buyers and investors.

 

First-time home buyers are trying to cash in on the chance at the American dream with low interest rates, a potential $8,000 first-time home buyer tax credit, and affordable pricing we haven’t seen in years.  Most of these buyers were priced out of the market in years past, and now is their chance to live in their own home, cut their own grass, and have their chance at building wealth.   That chance is alive and well, as home sale prices today are well below replacement costs, so builders can’t even afford to build at these bargain prices.  No builder is willing to lose money right now when a buyer can buy for less that the cost to build.  This trend will end when there is no more inventory, and as you can see by last week’s graph, inventory levels are shrinking.

 

Lastly we come to the investor.  Today’s investor is much different than the speculators we saw in 2004-2006.  Many of today’s investors are paying cash vs. the over-leveraged speculators who leveraged everything and didn’t qualify for anything but maybe their own personal residence.  Today’s investor isn’t looking for the quick flip, although we have seen a few successful flip transactions.  Today’s investor recognizes bargains, and they’re buying up properties, rehabbing when necessary, and renting them out for cash flow.  In the future, each investor will decide on their own whether they want to sell at normal pricing, or keep the property for positive cash flow.  Positive cash flow is a term we never really used to hear much about in SW Florida because it was so hard to accomplish, even before the so called Boom of the 2000’s.

 

But was the Boom of the 2000’s really the boom?  We can say with certainty that prices went up for awhile, before they came crashing back down, giving up all the gains and then some.  Some people made money, and a lot of people lost money, including the banks, tax payers, etc. The opportunity to make money was limited to when you could get the new construction completed, and the demand was false.  All that happened was the supply side sped up, bringing needed housing to market much sooner than the demand.  So today we have more supply than demand, however that will change in time.

Today’s buyer has more opportunities for success going forward than any buyer did in 2005.  Sales are stronger in 2009 than they were in 2005.  Prices are more affordable, interest rates are low, and there are tax incentives in place now.  In fact, we’re hearing that if the economy hasn’t picked up by October, Congress may extend the 1st time home buyer tax credit scheduled to expire Dec 1, and some are saying it should be opened up to move-up buyers as well. We would argue the market in many ways is much healthier today than it was in 2005.  Many might ask, how could anyone say this market is healthy?  The truth is even with the foreclosures, the market has been cleansing itself for the last 4 years.  It may not be healthy today, but would you rather buy a home today or one back in 2005?  We would say it would be healthier to buy one today than back then, and most people call back then the Boom.

 

We think we should change the conversation.  2005 was not the Boom.  It was not healthy.  There was little to any chance of making money, and first-time buyers couldn’t afford to live here.  Nothing was good about the 2005 market, it was all false.  So let’s stop calling it the Boom. I don’t know if 2009 is the Boom, but if your definition is record sales, affordable housing, Real opportunities to make money in the future, and healthier lending standards, then this is all true today.  It just seems more sensible to call 2009 the Boom than 2005.

 

If you’re a seller or facing financial difficulty, Boom may not excite you.  We’re just saying the last so-called Boom is what started the pain and misery, and it’s going to be real estate that pulls the nation out of recession going forward.  Real estate recovery leads to eventual job creation.  We may be a few years away from construction jobs coming back to SW Florida, however the market has been well on it’s way to healing itself for years now, and we at least have those painful years in our rear view mirror.  I’d much rather be sitting here in 2009 and think of the market as the Boom than back in 2005 thinking everyone was going to make money on their next Flip.  Today is the Boom, 2005 was the Bust.

 

As appeared in Fort Myers News Press August 8, 2009

Florida Statewide Home Sales Numbers Released Including Cape Coral and Fort Myers Real Estate

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The Florida Association of Realtors released official home and condo sales numbers for the month of August.  Median sale prices were down 41% for single family homes in the Fort Myers Cape Coral area from last year.  See SW Florida Real Estate Sale Prices 2005-2008 and were down 5.16% from July’s numbers.  See Month Over Month % Price Change Chart Fort Myers Cape Coral Florida.

Median home sale prices in Cape Coral and Fort Myers have fallen 30.84% in three short months, from a median price of $212,400 in May to a median price of $146,900 in August.  Home sales were up 31% over last year with 684 sales this year Vs. 520 last year, but home sales were down 11% from July 2008 numbers.  Financing has become increasingly difficult for many homebuyers.  Even though affordability is back in the market, many good credit homebuyers cannot qualify due to changing underwriting standards and amidst a capital crunch on Wall Street.

It’s also important to note that foreclosures are driving the median home sales price down more so in areas with higher concentration of foreclosures, like Lehigh Acres and Cape Coral.  Fort Myers has not see the concentrated number of foreclosures like the previous two areas, and home prices have not suffered as much in many areas in Fort Myers because of that.

Anywhere we saw rampant speculation building; we saw rampant cases of investors/speculators walking away from their investment.  Most of these homes were built in 2005 and 2006 with no end user in mind.  The speculators were convinced they’d buy as many houses as the banks would lend money on and flip them to a buyer or another speculator for large profits.  This strategy worked until we ran out of bigger fools, and the whole strategy came crashing down, taking lenders with them, as well as legitimate end users who bought in that time frame.

Now banks and Wall Street are in trouble and asking the taxpayer for a bailout.  Most people are strongly against this idea, and yet the government is probably going to have to get involved in some capacity whether we like it or not to protect a domino effect of financial institutions from crumbling under their past poor decisions.

It’s not right, but it is where we’re at today, and unfortunately we may all have to pay for the sins of others.