Tag Archives: Fort Myers real estate 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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Single Family Home Median Sales Prices Drop Unexpectedly in SW Florida

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The Florida Association of Realtors released official numbers, and as expected the number of sales were down, but fairly steady with last year. We predicted in last week’s article they’d be right where they are. We also said last week that we didn’t study the sales prices, but that we wouldn’t be surprised if we saw them rise again in January. Perhaps we should have studied those numbers because they did not rise, they actually fell 3.86% from last year’s numbers and fell 4.32% from December’s numbers.

Median Sale Prices SW Florida Homes
SW Florida Single Family Home Median Sale Prices 2009-2011

We can’t put too much emphasis on one month’s numbers, especially January numbers because there was a flurry of activity in December to get homes closed by the end of the year. Many sales have stalled or pulled due to title issues. We’re just now getting a few listings back from the banks in the higher priced end that were stalled due to this, so this can have an impact on closings and prices temporarily.

Just the same, we half expected prices to rise again as we believed fewer sales would equate to rising prices. Because more of the foreclosure sales in the past have been in the lower price points, fewer foreclosure sales means the median sales prices gets pulled up from the top and pushed up from the bottom. This evidently did not occur. It is possible that as more short sales went through they were in the lower price points.

It is season now and we have pent-up sales and rising pending sales, so again going forward we will not be surprised to see rising prices. In fact last year this happened as evidenced by the chart.

This past week we attended the News Press Market Watch National Association of Realtors Chief Economist Lawrence Yun gave some insightful statistics that may impact the US and SW Florida markets. He expects interest rates to hit 6% by the end of the year and 6.5% sometime in 2012 as rising deficits lead to inflation.

Mr Yun still believes we will see 50-60% distressed sales in the SW Florida real estate market this year, and we have 2-3 years total before all foreclosures are worked out of the system. If President Obama enacted an elimination of the mortgage interest deduction it would have an immediate effect of lowering prices nationwide by 15%, and our economy doesn’t need another big hit from real estate.

Lawrence Yun, Chief Economist NAR and Brett Ellis

He expects about 3% GDP growth and unemployment to be around 9% in 2011 returning to a normal 6% by 2015. Businesses are making money, but they’re afraid to hire due to uncertainties with new health care costs and banks aren’t willing to lend to businesses due to blank pages written into new banking rules. By blank pages he referred to pages that state a future committee will determine actual rules, so banks are hoarding cash and not lending.

Mr Yun says Washington DC is to blame for businesses not hiring due to uncertainty. If we could give certainty back, business may hire more quickly, and this would speed up time lines for recovery dramatically. For instance, we’ve lost 8 million jobs since Obama took office, and in 2010 we created 1 million jobs. 1 million jobs is pretty good, but nothing compared to what we lost. At this rate we’ll create 2 million jobs in next 2 years, but we’re still way down from levels just 2 years ago. If we could speed up businesses hiring, we could speed up the recovery, which would help real estate. Wall Street is doing OK as we’re seeing record profits, but no motivation to hire due to Washington.

Sales are near record levels. To put this in perspective, in 2001 we had 376 single family home sales. We had 443 in 2002. In 2011 we had 1,072, down slightly from 1,115 in 2010. Our sales are on fire. Our prices leave a little bit to be desired, unless you’re the buyer. Buyers realize SW Florida is on sale and they’re buying as fast as they can. We can see light at the end of the tunnel, and prices should increase going forward. Just don’t expect 2005 pricing to come roaring back anytime soon. We’re looking for modest gains, and as Dr. Yun says, cities like Las Vegas and Fort Myers might even see some occasional surprises on the upside of pricing going forward.

SW Florida Real Estate Market Update

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Official numbers were released last week, and as expected single family home sales dropped.  As you can see from the attached chart, there is some seasonality to this, but there are more reasons as well. 

Fort Myers Cape Coral Real Estate Closed Single Family Homes
SW Florida Real Estate Single Family Home Closed Sales

Sales are still well above 2006-2008 levels, but they are down against 2009 levels which was a record setting year.  Last year the market was filled with bank owned bargain inventory, and the trend this year has been less foreclosures coming to the market so we’ve been steadily selling off that bargain inventory. Actually the market never filled, but as foreclosure properties entered the market they were scooped up just as fast.  The pipeline has slowed this year. 

Combined with the expiration of homebuyer tax credits and high unemployment it’s quite predictable our market would slow.  Median home prices even began rising as less bargain sales were occurring.  In the last 3 months we’ve seen median prices decline from $101,500 in April down to $93,500 in July. 

So if less bargain homes are selling, it must be true that less regular sales are selling as well, or else the median wouldn’t drop.  This is also true, as distressed sales percentages in Lee County reached 64.18% in July vs. 54.66% in April.  Now that season is no longer here, it seems mainly the bargain homes are selling, and there are less bargains, so home sales are down, and non-distressed homes aren’t picking up the slack. 

Last year we predicted we’d see a No-Mans Land market when the foreclosure bargains dried up, and we’re seeing the beginning of this phenomenon now.  There is no major upward pricing pressure due to the economic times. 

Without rising prices, we won’t see increased builder activity, which means less tax dollars to the county government.  With fewer sales, we’ll see less doc stamps revenue to the state.  It’s a vicious cycle, so government better be prepared to make cuts because property tax values are also down which also cuts into county budgets. 

Real estate agents are out interviewing now because they’ve noticed their leads are down and they’re looking to go where there are some leads.  When the deals are gone, so is the investor interest, and we’re left with fewer residents looking to purchase.  We’re not seeing move-up buyers because people are uneasy about the economy and many can’t afford to sell because they owe more than their home is worth, so they can’t take advantage of moving up even if they do have solid employment.  The same goes with buyers looking to move-down.  You cannot move down to save money if you can’t afford to sell at today’s prices. 

This is Labor Day weekend and our market may be laboring, but it will be fine in the end. There are still good buys entering the market, and while we don’t see a lot of immediate upside pressure, we don’t see downward pressure either.  Even with slowing sales, we’re still the 2nd highest year on record.  Buyers looking to take advantage will have to be both quick and patient.  The early bird gets the worm when it comes to fewer foreclosure bargains, and the patient buyer gets the short sale, which can be a bargain if the buyer is prepared to wait.  And because 64.18% of current sales are distressed in some fashion, it pays to be both quick and patient.  The educated buyer with resolve is the real winner in this market.  The fearful buyer is missing opportunities and will kick themselves later.  

Perhaps when the government gets its act together and figures out which way is the road to recovery, we’ll see increased sales and prices.  Look for another homebuyer tax credit soon, or some other vehicle to spur the market, because real estate is traditionally 32% of GDP, and if we can kick start real estate, the economy may follow.

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