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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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Is Now the Time to Buy?

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Last year we said it was a good time to buy because prices were heading up and interest rates would eventually rise. Is Now the Time to Buy?

Is Now the Time to Buy
Payment on Median Priced Home

4 things affect the cost of owning a home, not counting maintenance of course.  Those 4 things are debt, interest, taxes, and insurance.   Last year prices were rising and they still are.

Interest rates are rising now too.  Interest rates were artificially low because the Fed has been buying down rates by purchasing bonds to stimulate the economy.  They’ve been purchasing about $85-billion-a-month in Treasury and mortgage bond purchases however a few fed governors have hinted that they’re ready to vote to discontinue buying down rates as soon as the economy shows signs of recovery.

Wall Street immediately sold off stock a few weeks ago in anticipation of this.  Fed Chairman Bernanke later said they’re not stopping the program now although nobody knows for certain when the program could end.

Here’s what we know.  SW Florida real estate prices were artificially too low after the real estate bust.  They were so far below replacement cost as we worked through thousands of foreclosures and short sales.  It was only a matter of time until the market recovered.

With inventory on the decrease and foreclosures down drastically from their peak, prices have been rising.  After the bust we had two artificial moments that created an absolute buying bonanza for investors and buyers.  Investors were the first to pick up on the opportunity as regular buyers were afraid the market could fall further.  Regular buyers tend to follow the herd and react.

The artificial low prices are wearing off and soon the artificially low rates will too.  This does nothing but add to the cost of home ownership.  For the past several years we’ve pointed out what rising interest rates and rising prices could do, but sometimes it’s easier to see in graph format before it makes sense.

I always get a kick out of radio show call in listeners or people on TV that think Realtors just say “now is the time to buy” because they want a sale.  While I’m sure every Realtor would like a sale today, there is just no way of getting around the facts.  Last year was a better time to buy a home than today, and today may be better than next year.

We’re not saying to follow the herd.  We told people in 2009 it was the year of bouncing along the bottom and it was.  We told people back in 2005 prices were high and not sustainable.  We’re not afraid to tell it like it is because we study market indicators.

Successful Realtors sell properties in up, down, and sideways markets.  Our job is to educate the community on what’s going on today, and we feel like that’s what we do,  Some people like what we have to say and others don’t.  As consumers we don’t always get to choose the market, only how we react to the market we’re given.  Realtors don’t control the market.  If we did the market would have recovered much faster.

We’ll keep informing you what we’re seeing based on the data we look at.  If you’re considering buying, we think now is a good time as you’ll be able to afford more home today for the same payment than you will next year.

If you’re thinking of selling consider two things.  Prices are going up.  When interest rates go up too it cuts into buyers’ potential, thereby limiting how many buyers can afford your home.  Rising rates can stifle demand, which can hold back prices.  It won’t help the buyer when rates go up, and it doesn’t help the seller either.  Until the economy definitively turns around, nobody knows exactly what prices will do.  All we can say is your options are better today than they will be next year.

Good luck and happy buying/selling!

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