Tag Archives: Cape Coral real estate

SW Florida Home Prices

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It’s been over a month since we reported on single family home sale prices in Lee County, so we thought we’d provide an update.  Many people are questioning prices right now as tax notices went out recently, and many have been shocked at some of the new value assessments imposed by the Lee County property appraiser’s office.

Keep in mind that value assessments from the property appraiser’s office reflect values as of January 1, 2010 and not today’s values.  Its possible values have risen or fallen since January 1 depending on where you live.  Values do not move in tandem in perfect harmony.  Certain sectors of the market lead others, and when one moves another will follow to keep from having too much disparity.

SW Florida median Sale Prices
Home Sale Prices in SW Florida Fort Myers, Cape Coral

I could devote a whole article to this phenomenon we call “bunching” but we’ll save that for another day.  Since January, we’ve seen countywide price increases through April where median home sale prices peaked at $101,500.  Median sales price by definition means half the sales occur below that price and half occur over that price. Median sale prices have fallen since April to $93,500 which you can see by the chart.  New sales numbers are scheduled to be released September 24 which was after this article was written, so we’ll be keeping a close eye on sale prices and closed sales volume.

We did see an increase in pending sales last month which is a good sign going forward for closed sales, but pending sales were down about 19% from last August, and about the same for September, so official September sales would not surprise us if they came in down from last year.

Nationally unemployment is at 9.6% and the housing market is stalled, which does affect the SW Florida real estate market to some degree as northerners may be putting off selling in tougher times and moving to Florida.  Additionally, unemployment is a whopping 13.7% here in Lee County and rising, which does not help demand for housing, especially in the $150,000-$400,000 range.  The bottom of the market has indeed firmed up and homes listed below $100,000 are often scooped up quickly with multiple offers.  Homes priced much higher take longer as investors cannot flip them, the rents don’t always cash flow, and there aren’t enough 2nd home buyers to pick up that slack.

Season will be approaching again soon, and last year our northern friends did buy.  We’ll keep an eye out and see if that trend continues this year, and it very well could because the $150,000-$400,000 homes are still bargain buys, and everybody loves a bargain.

We’ll also report on pending sales in a few weeks.  Our guest on our Internet TV show will be Lee County property appraiser Ken Wilkinson.  We plan to ask him about housing values, and how to read the 3 columns in the trim notice to determine where your taxes will be for this year when tax bills are due in November.  The show is posted at Topagent.com

Interview wih Lee County Property Apprasier Ken Wilksinon

Segment 1

Segment 2

2nd Qtr SW Florida Real Estate Sales 2nd Best on Record

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As we’ve been telling you in these articles, we expect sales to trend downward once official numbers were released, and that is the case.  We still have some pretty good numbers though, and as you can see by the chart, the 2nd quarter of 2010 is the 2nd highest on record.  2009 was the highest on record.  We’re still topping 2005 levels by a large margin. 

SW Florida Single Family Home Sales by Quarter
Lee County Single Family Home Sales

Home sales fell 12% in June over last year, down from 1,705 last year to 1,501 this year.  Last month sales were 1,460, so we actually picked up a few sales.  Single family home prices were also up about 10% over last year.  Median price this year is $96,600 in June compared to $87,900 last year.  Prices were roughly even in May 2010, so prices pretty much held steady. 

Condo prices also held steady, holding at $131,400.  They were $131,900 in May, and $125,300 last June.  Condo sales were up 11.11% 

So what does all this mean?  We have seen an increase in phone calls lately and an increase in buyer activity in the higher price ranges.  This is a departure from last year when buyers only wanted the bargain basement homes.  Buyers in the higher price ranges still want value and are not willing to overpay by any means, but at least activity is picking up.  This can be attributed to the higher priced homes coming down in value and entering the buyer’s radar screen on where they perceive values should be. 

Buyers don’t always have a realistic view of what properties are worth, just as many sellers don’t.  The exciting time in the market is when buyers and sellers perception become closely aligned.  It is precisely then that transactions can occur. 

We would have more transactions occurring if more sellers could afford to sell.  Many sellers just owe too much to sell at these bargain prices.  Of course, if more sellers could afford to sell it would add inventory, so the market has a way of balancing itself out. 

We don’t think prices are going back to 2005 levels any time soon, but at least prices are on the rise, and home sales are faring well.  I’ve spoken with a few lenders who have said mortgage applications are down.  This is true in SW Florida and nationwide.  We have seen an influx of cash buyers again as banks are sometimes stingy with the money.  We have seen some lenders loosening some of their lender requirements.  There are some 100% financing loans out there and interest rates are down to about 4.25% 

Some buyers have backed off because they lost out on the $8,000 tax credit.  The interesting thing is, rates were 5.5% back when this program was in effect, so by waiting, a buyer would now save $54,612 in interest on a $200,000 loan.  Not bad for waiting just a few months. 

Will we ever see interest rates this low again?  Will we ever see home prices this low again?  Will we ever see them this low again together?  I think the answer may be No to questions 1 & 2, and definitely NO to #3.  Never before have we seen this much buying power in the market, and perhaps this is why home sales are still hanging tough.  If you‘re a buyer, their really isn’t a better time to buy than now, and that is a fact!

SW Florida Real Estate Video Channel

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Here’s an update to our SW Florida Real Estate Video Channel.  The Top Agent channel has received 1,661 channel views and the videos have received 29,940 views.  We have videos posted other places, so this is just the videos contained inside this channel.

Here is an Index of some of our recent videos:

Realtors Clean up Neighborhoods WINK News 5-17-10 5PM

Cap and Trade E-Mail Hoax Fox 4 News 5-3-10 10 PM

Brett Ellis on NBC Nightly News with Brian Williams  January 11, 2009

Brett Ellis on NBC Today Show  October 1, 2008

Innovative Sales Techniques  August 25, 2008

Pricing Your Home to Sell – Future of Real Estate

Featured Hot Listings – Future of Real Estate SW Florida  June 4, 2010

Hot Listings-Future of Real Estate SW Florida  May 23, 2010

Future of Real Estate Hot Properties for Sale  May 10, 2010

Home Prices on the Rise – Effects of the Oil Spill

The Future of Real Estate – Hot Properties of the Week  May 4, 2010

The Future of Real Estate – -Home prices going up in SW Florida May 4, 2010

Featured Properties of the Week-April 19, 2010

Short Sale vs. Foreclosure

Future of Real Estate-Government Shortens Short Sale Time

Future of real Estate-Flood Insurance Program Expired   April 1, 2010

FUTURE OF REAL ESTATE 3-19-10 Michigan, Florida a Market Comparison

The Future of Real Estate 03-13-10 Hot Properties

The Future of Real Estate Market Trends   March 15, 2010

Future of Real Estate March 04 10

Short Sales and Bank Foreclosures REO   March 6, 2010

Future of Real Estate 3-04-10 Hot Properties

State of the Market Report SW Florida Seg 1 Feb 2010

State of the Market Report SW Florida Seg 2 Feb 2010

Future of Real Estate State of the Market Report Fort Myers Beach, Lehigh Acres, Feb 2010

Future of Real Estate State of the Market Report Fort Myers, Estero, Bonita Springs Feb 2010

Future of Real Estate State of the Market Report Cape Coral Feb 2010

Future of Real Estate Show 2-9-10 Inside the Numbers

Future of Real Estate 2-9-10 Seg 2 Interest Rates-Featured Properties

Lee County Property Appraiser Ken Wilkinson Segment A  Feb 1, 2010

Lee County Property Appraiser Ken Wilkinson Segment B   Feb 1, 2010

Lee County Property Appraiser Ken Wilkinson Segment C   Feb 1, 2010

Sean Ellis Condo Association Law pt 1

Ellis Team Sean Ellis Condo Assn Law Pt 2

Ellis Team and Lee County Florida Home Down Payment Assistance program

Lee County Florida Selling Foreclosed Houses

2010 New Years Predictions

Chinese Drywall- Future of Real Estate Seg 1

Chinese Drywall Future of Real Estate Seg 2

Chinese Drywall – Future of Real Estate-Seg 3

Future of Real Estate Ellis Team -Social Media

Insiders Guide to a Successful Short Sale Part 1 12-5-09 Future of Real Estate TV-Radio Show

Insiders Guide to a Successful Short Sale Part 2 12-5-09 Future of Real Estate Show

WINK News 5 13 09 10PM-Local Housing Rebound?

WINK News 2 18 09 10PM – State of the Market Report

WINK News 2 18 09 11PM  Home Prices Where They Were a Decade Ago

State of the Market Report

Changing Mortgage Rules SW Florida 8-1-08

SW Florida Real Estate Housing Numbers  This was the Beginning of Increased Sales Which Led to Record Sales

Ok, we have many more videos but you get the picture.  Subscribe to our SW Florida Real Estate channel and browse away.

SW Florida Real Estate Median Prices Officially Up

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It was bound to happen.  Back in 3rd Qtr of 2005 we went on TV and said this market is getting ready to hit some bumps in the road.  We looked at the data and determined the Boom was over and it was simply a matter of time before the market reacted.  In reality we started noticing signs in the 2nd Qtr of 2005, but everyone was busy rushing around trying to get their construction deals put together and finalized.  We began pulling our investors out of projects in early 2005.  We risked some commission dollars by doing so, but we just didn’t feel good about what was to come. 

We took a lot of heat back then.  We heard things like “You can’t stop this market, it’s on fire” and “It’s a runaway train” etc.  Most of us learned growing up that nothing goes up forever, but back then it was that herd mentality.  It was quite common to go to a cocktail party and hear stories of average people flipping home after home and making $100,000 per deal.  They were buying as many as they could, without a true end user in mind. 

Median Sale Prices 2009-2010 Sothwest Florida Single Family Homes
SW Florida Real Estate Prices Single Family Homes

We all know what happened to those days.  Just as nothing goes up forever, nothing goes down forever either.  If you read these articles regularly you know we’ve been predicting that about March or April of 2010 we could see prices actually rise over year ago prices and the headlines we would read would be quite different than what we’ve seen over the past 5 years. Well, Official numbers were just released this past week, and guess what?  Prices are up 9% over last year.  It’s not a miracle.  If you’re unemotional and study the numbers you could see it coming. 

We’re not rocket scientists.  Most Realtors have a good pulse on the market and can tell you what’s really going on.  And just because the headlines read one thing, there can be many submarkets reacting quite differently or bucking the trend.  You’ve heard that all real estate is local, and that’s true.  Even in the Boom market some properties didn’t fare as well as others, and in the down market, some didn’t do as poorly either.  Full time Realtors are on the front lines and see trends as they develop.  Sometimes it’s beneficial to step back and analyze the numbers, and others it’s great to be right in the race and see what’s happening in real time.  Sometimes it’s great to do both. 

Where will the market go from here?  That’s a good question.  Some speculate that the Home Buyer Tax Credit Expiration April 30 will have a negative impact, but we’re not so sure in SW Florida.  Many of our buyers are scooping up bargains and don’t qualify for the credit anyway.  We think home sales should continue their torrid pace as long as we have bargain inventory.  2009 set an all-time record and 2010 sales have surpassed 2009 sales.  Our prices are artificially low, in many cases half or reproduction costs.  This is why you see so few building permits being pulled. 

Because we are not seeing building activity, it is limiting employment in our area, which was so heavily dependent on the building and real estate industries along with related services.  We don’t believe prices will shoot back up wildly until we create more jobs, and we may not create more building jobs until prices shoot back up.  So it’s the old chicken and the egg theory.  We think we’re going to have to find other employment opportunities to help lift our entire economy back up so we’re not so reliant on the building industry.  Once we do that, the building industry will take care of itself.  We would caution governments not to add impact fees and other costs that price jobs out of the market.  We need to be more competitive, not anti-competitive. 

And finally, resist the urge to follow the herd.  The herd is usually on right for a brief period of time, and usually at the tail end of the curve.  Our market is Hot, and prices rose last month.  We point out that even though the herd considers 2005 the Boom, there is more opportunity in the air now than there was in 2005.  Misery was in the air, just few people realized it back then, and today opportunity is in the air, and the herd will realize it only after prices rise substantially in a few years.

November Sales Set Another Record

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It’s official.  Last week we predicted a surge of at least 125% +/- based on the sales we were studying for single family homes in Lee County.  Official numbers were just posted, and it looks like it was on the + side of our prediction.  Sales came in at 133% over last year’s numbers for single family homes, and prices were up a healthy 3.82% over last month, marking the 5th straight monthly gain.  Median single family sales prices now stand at $95,100, up from a recent low of $87,900 set back in June.  As you can see, the market has turned around since June and has steadily increased in price, and has set records in sales volume as well. 

This isn’t news to News Press readers or listeners of the Future of Real Estate Radio Show, nor to agents active in the business.  For months agents have been telling buyers the market is one the move, and the time to buy is now, and buyers for the most part have gotten the message.  It’s always fun when an out of the area buyer comes down and wants to make offers 20% below asking price because that’s what you do someplace else.  Buyers seek the assistance of an agent and it is the agent’s responsibility to educate buyers and sellers to actual market conditions. 

Fort Myers-Cape Coral Single Family Home Sales by Month
Fort Myers-Cape Coral Single Family Home Sales by Month

Most agents I speak with do a very good job at this.  When you need an attorney typically you let them represent you and you follow their advice.  Same goes with a doctor, typically you tell the doctor how you’re feeling and answer the questions and the doctor makes a recommendation for you based upon your needs.  So why would an agent not offer the same advice to an out of town buyer or seller? 

Like I said, most agents do.  Many times we’ll receive multiple offers on a property, and most are at or above asking price, especially when the property is a good buy.  Occasionally I’ll receive one that is 10-20% below asking price when I’m sitting with other offers above asking price.  I’ll ask the agent working with the buyer what was it that caused the buyer to offer at that price.  Sometimes we’ll get that’s all they’re qualified for, or that’s all they want to go or feel it is worth.  Sometimes the agent replies the buyer just wants to buy it as cheap as they can.  Who wouldn’t want to buy it as cheap as they can, but the buyer’s got to get in the game to buy it at all. 

We’ve told people before, if you’re going to steal, don’t do it in slow motion.  If you’re looking at a bank owned bargain, and it’s a steal, go get it.  Chances are others are looking for the same thing.  SW Florida is experiencing record sales right now, and if it’s a bargain, you know there will be multiple offers.  Why try to get an additional 10-20% off when it’s already a bargain? 

I then ask the agent why they haven’t told their buyer about the market, right after I inform them we have multiple offers.  Sometimes I hear “I know, I know, I’ve tried to tell them but they won’t listen.”  Other times I hear I don’t want them to work with another agent, so I just do what they tell me.  Both instances are signs of lack of confidence in the agent. 

It’s truly an agent’s job to educate.  Buyers and sellers will thank you for it, because if you don’t do it, you’re just wasting their time and yours.  After losing out on about 7 offers, buyers become frustrated.  Agents become frustrated with buyers after about 2-3 offers if the buyer isn’t listening.  So why not just cut to the chase and end it upfront.  I know, there will always be another agent who will do what the client says, but if the client won’t listen to you, can you really help them? 

It’s one thing to work with a buyer who is doing everything they can to buy a home.  We have customers putting in offers above full price at the max of what they can afford and still losing out.  That’s quite different than a buyer who is low balling out of ignorance. 

Buyers and sellers should listen to their agent, and agents shouldn’t be afraid to counsel and give the cold hard truth to their customers.  Market forces eventually win out in the end anyway, so getting there as quickly as possible is the best way to avoid frustrations, and get you in your first choice property instead of your 8th choice.  In a stagnant market your choices don’t change often, but this market is anything but stagnant and the market is on the move.

It pays to study the market and get ahead of the market.  Sellers never want to chase the market down, and buyers hate to chase it up.  2010 will be an interesting year.  It’s always fun to cover a changing story, and this story is changing.  If you’re not buying or selling, it will be fun to watch.  If you are buying or selling, it’s time to do your homework.

Current Trends in the SW Florida Real Estate Market

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First, we’ll start with the good news.  Official real estate sales numbers for Lee County for November 2009 won’t be released until December 22.  Last year November single family home sales totaled 600 in the Lee County area.  This year we expect somewhere around 1,355 total single family home sales +/-.  Assuming the 1,355 is anywhere close to accurate, those numbers would be an increase of 125.83% over last year, which is pretty remarkable.  We’re sure the headlines will tout this feat. 

SW Florida Current Market Index
SW Florida Current Market Index

As many of our readers know, the Ellis Team developed the SW Florida Real Estate Current Market Index many years ago which has accurately predicted the forward direction of the local real estate market.  This month we spotted a new trend.  The Index spiked up a bit to 4.36, close to what it was back in March.  A falling Index number is a sign the market is heating up, and a rising number indicates the market is cooling down.  As you can see, the graph was heading down which led our market to record sales numbers all year. 

This month is the first month we’ve witnessed a spike in a long time, which could indicate December and January sales may fall from August and September levels.  We will want to keep our eye on this Index in the coming months to see if it is a continuing trend.  It does make sense though as the Homebuyer Tax Credit was due to expire at the end of November.  This credit was just recently extended, so we’ll have to see if this affects future home sales going forward. 

We’ve also witnessed an increase in listing inventory the last three months.  Pending sales are down over 100 units this month.  The pending sales drop can be attributed to lag time in the Homebuyer Tax Credit, and diminishing listings in the lower price ranges.  We’ve begun to see slightly higher priced listings coming to the market. 

FNMA has begun listing more properties as foreclosures, and the banks we work with are bringing new inventory to the market now as well.  These foreclosure listings are a result of foreclosures that began 6-9 months ago.  New foreclosure filings are trending down, which is good news for the market 6 months from now. 

We believe this season is going to be good, as visitors recognize this may be the last season to fully capitalize on our great bargains in SW Florida.  It will be interesting to see just how much inventory we can draw down through the end of March, as well as through July when the new Homebuyer Tax Credit expires. 

It’s not surprising that home sales trailed off just a little bit as they typically do this time of year.  It’s actually been a little bit surprising home sales have been as strong as they have, but of course investors have been swallowing up properties at great prices, and first time home buyers who were employed and qualified for a mortgage found the tax credit too good to pass up.

Even with these record sales, we’ve still added to overall inventory the last 3 months.  We’re going to want to keep our eye on that.  We’ve also reported that we feel there is pent-up supply, which is people who want to sell, but just cannot at these low prices.  It’s still very difficult to fully assess this market, as there are many hidden variables. 

The Treasury department has issued new guidance in the sale of short sales.  Details are forthcoming, but this should be a roadmap for banks to follow to make the short sale process quicker and a little less painful.  You’ll still need a short sale expert as many of details haven’t gone away, but the process is being streamlined and unified so no matter which bank is involved the process would stay the same.  Keep in mind, this is government, and most of their past efforts to modify mortgages and streamline have failed, so we’ll see if this is any different. 

Bottom line is we have a hot market, and visitors have shown interest and are buying.  It’s also the end of the year when sales fall, and they’ve remained very strong.  We have seen an uptick in listings and a fall-off in pending sales in recent months, and this could all be related to the supposed home buyer tax credit expiration in November.  We’re just saying we’ve spotted a slight trend in the numbers and it’s something to keep our eyes on.  We still expect big numbers on Tuesday when official sales numbers are reported, and we expect healthy sales all season.  Stay tuned, as we’ll be tracking.

Let’s Talk Turkey

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Many people in SW Florida believe we have a Turkey of a market.  They can list all the things that are wrong with the market, wrong with the economy, wrong with what the government is doing to fix things, and wrong with how the banks are handling things.  And, in many cases these people would be right.  There are lots of ideas on how to fix things, and in fact we’ve covered many of them here. We’ve been quick to point out what is working, and what needs to be fixed or tweaked, so we’ve participated in these discussions just like everybody else who has lived here for the last 5 years or more. 

This being Thanksgiving weekend, we thought it might be nice to go over some of the things we can all be thankful for in the real estate market.  Transaction numbers were just released for October, and home sales in Lee County were up 96% over last October, so we’re continuing the trend of record setting sales, eclipsing even lofty 2005 numbers.  Sales were up 7% vs last month, partly because the 1st time homebuyer tax credit was thought to expire by end of November which motivated people to close in October. 

If you’ve followed these weekly articles, or listened to our radio show “The Future of Real Estate” you’ll also know that we’ve been predicting since June that the median single family home sales price would begin going up instead of down, and we gave statistical reasons why we thought this would occur.  As you can see from the chart, median home prices in SW Florida have risen every month since June, which is definitely something to be thankful for as well.

SW Florida Real Estate Monthly Median Prices 2009
SW Florida Real Estate Monthly Median Prices 2009

 Condo median prices in SW Florida rose 14.07 % last month, but you won’t see that reported many places.  Condo sales were up 143% over last year, so it’s not just single family home sales that are doing well. 

The first time home buyer tax credit was extended until April 30 of next year, and buyers have until end of June to actually close on those properties.  Additionally, the tax credit was expanded to existing owners under certain conditions.  We were fighting for provisions like this, and while Congress didn’t go far enough, the fact that they did what they did is also something to be thankful for.  We expect this to help the market going forward. 

This year’s holiday season may be leaner and families have accepted that they’ll be giving their children less this year.  Children have responded and they know times are tough.  A parent’s greatest fear is they won’t be able to give their children everything they so very much want to provide for their children, but children are resilient and are supporting their parents through lean times.  The truth is, children don’t need all that stuff to be happy.  What they really crave is family time, and this tough economy has brought parents closer to their children. 

A parent who has been laid off may now take a child to school, and we’ve seen many reports where parents are now more involved at school because they have the time.  Parents are spending less on fancy tech toys and kids are having fun the old fashioned way, by playing ball in the yards, card games, board games, etc.  We don’t mean to trivialize the pain many SW Florida families are going through, but rather point out a few of the silver linings in a tough environment.  This is Thanksgiving after all, a time to be thankful for what we do have, and forgetful of what we used to have. 

If nothing else, this economy has taught us to get back to the way it used to be decades ago, not 4 years ago.  Society was caught up in how much we could buy, how much we could borrow, and it was fueled by rapidly escalating equity in our homes, among other things.  We were taught on how to spend vs how to save.  We bought things we didn’t need or even use.  The market has corrected itself, and the question is, have we corrected ourselves? 

I think the answer is yes, many people have made corrections.  When this economy returns, and there are indications some things are getting better, will we be better as a community, as a family?  Sometimes it takes a kick in the pants to learn a life lesson, and lord knows SW Florida has been hit hard.  At a time when few see the positives, let’s take Thanksgiving to reflect on all that we do have, and be thankful that life has taught us to get back to the basics.  Tell your loved ones you love them and how thankful you are to have them.  Be kind to your neighbor, as they’ve probably gone through tough times like you have.  We’re all in this together.  We’ll come out stronger than before, because I believe at the height of the market is precisely the point we were weakest as humans. 

I am thankful to be here in SW Florida.  I am thankful for the friends and family I do have, and I am thankful to be back to basics.  I look forward to brighter days, and together we’ll get there.  Thank you SW Florida, and God Bless.

SW Florida Real Estate Inside the Numbers

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We’ve been researching and studying the SW Florida real estate market ahead of official releases due out next week, and our preliminary research tells us we expect sales numbers to increase approximately 100% or more over last August sales numbers.  The third quarter of 2009 is setting up to be another record quarter, and keep in mind 2008 numbers were near record numbers to begin with. 

Lee County single family inventory levels are on the decline again and pending sales are remaining strong.  The chart attached shows single family home inventory for Fort Myers and Cape Coral Florida. Listings in Fort Myers and Cape Coral fell by over 100 units as home buyers snapped up more property last month than came to the market. Separately, Lee County levels fell almost 200 units, suggesting buyers are buying faster than sellers and banks are bringing property to the market.

 

Fort Myers Cape Coral Listing Inventory Chart
Fort Myers Cape Coral Listing Inventory Chart

In the last several weeks we’ve addressed who is buying these properties, predominantly first time home buyers and long-term investors seeking to rent them out until the market improves.  At today’s low prices, properties actually cash flow, and we have lots of renters who have been displaced from properties. 

Now for some interesting observations we’re noticing that you won’t see in this chart.  We think home sales will be down about 11% from the previous month, which is normal due to seasonality.  Again, sales should be up about 100% over last year’s August, and last year’s August was down from July as well due to seasonality of the market, so no big surprises here. 

Foreclosure inventory increased 4.14% in the past month and foreclosure sales fell 13.82%  We’ve been saying for the past month or so banks are ramping up foreclosures for the next year and we expect double the write-downs banks will take, although because many of these properties will be in the higher price ranges it doesn’t mean we’ll see a doubling of foreclosure inventory.  Foreclosure inventory and sales will definitely be something we want to keep an eye on going forward and may tell the story of how our market is doing. 

Another trend we’re tracking is short sales to see if banks are cooperating more and agreeing to see short instead of taking back in foreclosure.  Even though total sales are down about 11%, and foreclosure sales are down about 13%, short sales are up about 3.76%.  This would suggest banks are cooperating more and our experience has been this is true; however it is still a very daunting process and not one a homeowner can reasonably attempt on their own.  In fact, it is so daunting that many agents won’t deal with short sales either.  If you’re going to attempt to buy or sell a short sale, make sure you’re dealing with an agent with lots of experience, preferably a CDPE (Certified Distressed Property Expert.)   

Distressed sales accounted for 70.04% of Lee County home sales in August, up slightly from 68.6% in July.  Distressed sales are here to stay for awhile.  In Fort Myers, 66.45% of the sales were distressed, while in Cape Coral the number is 68.87%  Lehigh Acres has far more distressed sales at 84.27%  County wide, distressed sales percentage remained stable over the previous month. 

Inventory levels fell in Fort Myers, remained fairly constant in Cape Coral, and increased about 2.35% in Lehigh Acres. So what’s the bottom line?  We believe median prices may increase some over time as banks bring higher priced foreclosures to the market.  Banks allowing more short sales may also increase the median sales price, but that doesn’t mean all homes are going up in value.  If this occurs like we think, it simply would mean the bottom has formed in the lower price range, and we’re still seeing erosion in prices in the mid to upper price ranges, and as they become more affordable buyers switch “on” and buy them.  

All real estate is local, and you can’t judge the entire market by a single statistic like median sales price.  This is why we take so much time to really study the market and explain what is really happening with hard facts.  We’ll keep an eye on the distressed end of the market, as these latest trends will offer us signs as to where the market actually is and where it’s headed. 

Until we flush out the distressed properties, normal market assumptions do not apply.  Supply and demand still rules, it’s just that it’s hard to get a grasp on supply without having a thorough understanding of what the banks are doing with foreclosures and short sales.  Until then we’ll keep tracking it for you and reporting the trends.

SW Florida Real Estate Update-Listing Inventory Levels Down

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SW Florida Listing Inventory Down

This week we’ll focus on the amount of single family home inventory in Lee County and
compare that with pending sales activity from a historical perspective so that we might be
able to draw some conclusions as to what’s happening today in the SW Florida real estate
market, and where the market may be headed.

Fort Myers and Cape Coral Real Estate Listing Inventory
Fort Myers and Cape Coral Real Estate Listing Inventory

As you can see from the chart which shows Fort Myers and Cape Coral single family
home inventory levels since December, 2004, inventory began rising in the 3rd Qtr of
2005, which was a precursor of what was to come.  The overall Lee County graph looks
similar, only larger numbers. Because new construction contracts were still in effect and
building was in its height at that time, the public really didn’t understand what was about
to happen.  Simultaneous to the rising inventory levels, you can see that pending sales
started to drop off as well.  Combine that with the flood of new construction homes that
continued to flood the market, and you can see very quickly what was about to happen. 
Having this information in real-time back in 2005 would have saved some investors some
money.

Fast forward to the 1st Qtr 2008.  As you can see, pending sales started to increase, and
listing inventory started to decrease. All the foreclosures entering market were quickly
absorbed, and then some.  2008 4th Qtr sales were close to an all-time record, and 1st Qtr
2009 was an all-time record.  In fact, we’re seeing more sales now than we saw at the
height of the Boom back in 2005.  So why isn’t everyone reporting this as the Boom?

2005 was filled with euphoria, rising prices, banks lending money like drunken sailors,
and just generally reckless abandon.  People just didn’t think it would end.  They ignored
the warning signs.  The market was not sustainable, but just try telling that at a cocktail
party with 6 of your closest friends who were flipping houses and making money. 
Nobody wanted it to end, and yet it could not continue.  It was phantom demand, and
over-supply. 

Today we have more sales than the Boom, but consumer confidence is low,
unemployment is high, oil is still high compared to 2005, and home sale prices are low. 
Homeowners are having a hard time making payments as incomes are down, and few
people feel great about their financial matters.  This is why nobody is calling 2009 a
Boom, and perhaps they should.  The opportunities for a buyer today are far greater than
they ever were in 2005.  2005 was a false market as nothing was what it appeared. 
Today’s market is real, and the bargains are there.  In fact, sale prices are so far below
replacement cost there is no building inventory entering the market in the foreseeable
future.

When the job market and the economy begin to recover, we may actually have difficulty
finding properties for buyers.  The builders have not been building, and many sellers
cannot afford to sell at today’s prices.  Banks have been forced to “short-sale” or
foreclose, and the foreclosures may start drying up by next year.  Some speculate there is
another wave coming due to resets in the ARM schedules in 2011; however we feel that
in SW Florida, most of those buyers have already walked because they were the
speculators who long ago realized they could never make a profit, so they chose not to
carry the costs.  If all this is true, we may have a period of diminishing inventory to sell
until the market sorts it out.

Many Realtors who study the market  were sounding the warning signs back in 2005, and
yet the public didn’t get the message.  Many of those same Realtors are recognizing that
2009 is a Boom, and yet not all of the public is getting that message either for reasons
outlined above.

Our goal is to provide you with meaningful data so that you can see what is really
happening in today’s market.  These first several weeks we’ll be providing a baseline of
where we’ve been and how that relates to where we’re headed.  We seek to provide
unbiased insight you might not have received anywhere else.  We seek to make sense of
what’s happening, and prove it with facts.  We can say that home sales have exploded
since 2008, and listing inventory is declining.  We’ll watch this market together, and
we’ll do our best to explain what’s happening.  We’re not tied to the outcome, as markets
go up and they go down.  Our job is to explain what it’s doing today, and offer our
insights as to where it may be going in the future, so you can make informed decisions. 
Remember, all real estate is local, even in SW Florida.  Just because we report something
is going on in the Cape or Fort Myers doesn’t necessarily mean the entire market is
affected the exact same way.

We are seeing a shift from Cape Coral, which has been on fire, over to Lehigh Acres, as
Lehigh is the affordable hot spot right now.  It’s the same shift we saw in the height when
prices in the Cape got carried away and buyers shifted to Lehigh.  Funny how life repeats
itself.  Stay tuned each week and we’ll present more insights.

SW Florida Social Media Update

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Last week we tested a social media experiment.  Our goal was to create a few Facebook Fan Pages for various parts of the SW Florida real estate market and see if we could drive 100 fans to each.  If we could do that, we could signup for Facebook unique URL’s.  We’re happy to report that not only did we hit our goal of 100 fans, we far surpassed it in only a week.  Currently we’re over 400 users on our Ellis Team site, and close to that on others.

The advantage of signing up on one of these pages is that we post timely news pertaining to each area, specific to that geographic location, or in the case of The Ellis Team site, about real estate marketing in general.  We provide discussion boards, Blog posts, nes paper articles, video updates, photos, and much more.

Our new goal is to hit 1,000 users by the end of the month.  Can we do it, who knows?  There’s no magic reason we picked this number, it just sounds fun.  We’ll post the web links here for Facebook users to follow us, and our Twitter addresses too for our Twitter users.

Facebook Pages

Ellis Team at RE/MAX Realty Group currently at 408 Fans

Cape Coral Real Estate                     currently at 244 Fans

SW Florida Real Estate                      currently at 342 Fans

Fort Myers Real Estate                      currently at 280 Fans

Future of Real Estate                        currently at 354 Fans

Twitter Followers can follow us at:

@swfltopagents   Ellis Team

@brettellis_swfl   Brett Ellis

We look forward to connecting with you on many levels.  We still do business the old fashioned way, and we still advertise in traditional methods like newspaper, TV, and radio.  We are however expanding our reach into the Social Media markets to better serve our customers, and we look forward to seeing you online.