Tag Archives: Fort Myers News Press

Current Market Index Predicts the Future of SW Florida Real Estate

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About 8 years ago the Ellis Team created a market index that accurately predicts the SW Florida real estate market. It helped us in 2005 warn the public that the local real estate market was about to turn.  Later in the fourth quarter and on into 2006 people began to realize the train had run out of steam.  We named it the Ellis Team SW Florida Current Market Index.  Since unveiling this index, the National Association of realtors came out with a similiar index called the NAR Pending Home Sales Index, which also predicts future closing activity, but it doesn’t measure the overall health of the market.  

Current Market Index SW Florida Real Estate by the Ellis Team
Current Market Index SW Florida Real Estate by the Ellis Team

 Our local index measures pending sales, but also takes into account listing inventory and measures the overall health of one against the other.  It tells us if properties are moving relative to overall supply.  This is important because in a good market, it may actually be more of a seller’s market than people realize.  In a hot market, sales are held back by the supply, meaning if there were more supply, chances are, there would have been more sales. 

 

The CMI Index numbers peaked out in January of 2008, and back then we started telling the public sales were about to pick up and inventory would start declining.  Sure enough, that’s exactly what happened throughout 2008 and into 2009.  Our Index was at it’s lowest in April of 2005 and at it’s highest in January of 2008.  The higher the index number, the more of a buyer’s market it is and the lower the number, the more of a seller’s market we have.  Back in July of 2005, the overall Lee County Index stood at only 1.07.  As we know all too well, that was about to change drastically.  The numbers shot up to 2.11 by September 2005, and 3.44 by October.   

So what do the numbers tell us today?  Our index hit 3.72 in April and stands at 3.80 in July of 2009.  This tells us inventory levels have been decreasing as predicted and pending sales have been increasing, as predicted.  In fact, last month we sounded the alarm that June sales could reach record levels, and they did.  July’s numbers when released should be strong as well.  Don’t confuse this with rising prices just yet.  The market is strong in sales volume, but we’re in a new market that has reset, and prices aren’t going back to 2005 levels.  We are starting all over from scratch and 2009 is the new baseline, and as the market heals, the baseline will have room for future price appreciation, with moderation. 

We update this graph each month on our Blog, blog.topagent.com and we look forward to providing this insight to News Press readers in the months to come.  Its one thing to have a Feeling about what the market is doing, however really studying the actual facts and charting trends helps to better understand what the market is actually doing, and where it may be headed.  Nobody can know with absolute certainty what will happen in the future, so we look to statistics to give us our best guidance.  Statistics are our radar so to speak.   

We really try to look at the data with an unbiased eye, meaning we’ll let the data speak for itself and tell the story, as opposed to hypothesizing what the story should be and trying to prove it.  We’ve been right, and we’ve been wrong, and the point is we’re not attached to the outcome of our predictions.  We simply lay it out there and let you decide based upon the best facts we have at the time. 

We’ll be running a new batch of numbers soon, but the July Index appears to show a strong market going forward for the next few months.  It looks like July and August sales numbers should be in good, and we look forward to the release of official numbers on August 21.  We won’t be surprised if July’s numbers are big, perhaps up as much as 100% or so, but down slightly from June’s record numbers.

As printed in the Fort Myers News Press August 15, 2009

 

 

 

 

 

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

SW Florida Real Estate Market Sets Another Record in April 2009

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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%

The Fort Myers News Press interviewed Brett Ellis of the Ellis Team at RE/MAX Realty Group in Fort Myers about Lee County’s all-time sales record.

Is the SW Florida Housing Market Rebounding?

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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:

Cape Coral Foreclosures Under$100k

Cape Coral Waterfront Foreclosures

Fort Myers Bank Foreclosures Under $200k

Fort Myers Bank Foreclosures $200k & Up

Reflection Lakes Foreclosures

Lehigh Acres Bank Foreclosures Under $100k

Lehigh Acres Bank Foreclosures $100k & Up

 

 
 

 

Lehigh Acres Foreclosures Under $100K
Lehigh Acres Foreclosures $100k and up

Fort Myers Newspapers in SW Florida

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Last week we focused on one of Fort Myers newspapers, the Fort Myers Florida Weekly.  This week we’ll provide links to the Fort Myers News Press, the long-time established Bell Weather newspaper in SW Florida.  The News Press focuses on daily news and advertising, while the Florida Weekly focuses on weekly events and summary analysis.

Both are excellent newspapers and serve a varying niche.  Currently the Ellis Team at RE/MAX Realty Group advertisies its properties in the News Press, however the Fort Myers Florida Weekly is an alternative and will be considered in the future.