Like clockwork Lee County summer real estate sales are heating up.  So why aren’t Lee County home sellers jumping for joy?  Many home sellers are happy, because their home was on the market all season and now it’s selling.  Others are happy because their home just sold while their neighbor’s home sits on the market.

This past season we saw many sellers priced at one point while the buyer’s perception of value was at another.  In many cases, the seller’s perception exceeded the buyer’s perception by 10% or more.  Sellers didn’t want to accept this reality, so homes sat on the market.  You’ll always have some sellers that refuse to accept today’s market prices, but when you have many, it causes the market to take note and listen.

The market always speaks to us.  It’s up to us if we’re ready to listen.  We’re humans, and we don’t always want to accept change.  For those that accept change and react quicker, the opportunity is the greatest.

Lee County Summer Real Estate Sales Are Heating Up 7 Day Market Watch

Right now, home sales are brisk $300,000 and below.  This makes sense because that’s where the bulk of the buyers are.  That’s what more people can afford. We just pulled up the 7-day market watch from MLS, and we notice there more pending sales (379) than new listings (365).  You’ll notice too there were more price reductions (385) than either.  These price reductions are leading to more pending sales as sellers get their home down to where the buyers are.

Selling a home is kind of like fishing.  If you place your bait 20 ft above where the fish are, you get nothing.  Lowering the bait 10 ft above where the fish are still yields nothing.  Fish tend to swim in schools.  You’ve got to place the bait where the fish are, not where you want them to be.  Pricing a home is the same.

If you price your home above where the buyers are, they don’t even look at it.  Typically, you should expect an offer with every 4-5 showings.  If you’re not getting offers, your home is probably still overpriced.  Sellers say, “We just reduced our price $10,000” so that can’t be it.  It can.  If you were $30,000 overpriced, that $10,000 reduction still places you 20 ft above the fish.  Until you get down where the fish are, you’ll attract few showings and little to no offers.

Lee County Summer Real Estate Sales 7 Day Market AveragesAre Heating Up

Of the 379 new pending sales, the median price was $249,000.  The average price was $335,540.  This confirms the $300,000 range and below as being the sought-after part of the market.  If you have a home $400,000 or more on the market right now, you’re probably still fishing for the correct asking price.  You may be wondering why buyers just are not accepting your price.  Your neighbor’s home may be sitting on the market too.  Occasionally one will sell, and you’ll be wondering what they did to attract that buyer.

It takes aggressive marketing.  Aggressive marketing alone won’t work.  Together with your agent, you’ll need to adjust that bait until you find where the fish are.  When you do, it will sell.  The SW Florida real estate market isn’t suffering from a lack of buyers.  The buyers are not aligned with some sellers’ asking prices.  When the seller gets down to where the buyers are, the buyers are biting.  This past week or so the Ellis Team has placed 7 properties under contract.  Some agents believe the summer is the slow time, but that’s a bad assumption.  We have buyers in all price ranges.  We just closed a property over $1 Million.

The agents out there hustling are selling homes.  It’s a great time to sell, so long as you’re willing to price your home at the market. Isn’t that always the case though?  Together with your agent you should ask yourself, “Am I willing to price my home at a price that will cause it to sell?”  If the answer is no, then why are you putting it on the market?

If you’d like to talk to Sande or Brett Ellis about selling your home, call us at 239-489-4042 Ext 4.  Next week we hope to share some exciting news that may make your home stand out and sell faster. Find out what your home is worth online.

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Some might look at recent SW Florida single family home sales numbers and wonder if the market has peaked as sales have slacked off a bit, but let’s not jump to conclusions just yet. This week we take you inside the numbers and explain what’s happening and what we’re keeping our eyes on.

Are SW Florida Real Estate Sales in Trouble

Homes Sold single family Bonita Springs Estero Florida Fort Myers Cape Coral

As you can see from the Homes Sold graph, sales are down. This is somewhat expected as inventory is down and agents have been selling more new construction to satisfy home buyer’s needs. 2013 sales numbers dipped in January but rebounded nicely going into season leading up to a fantastic May. This could happen again this year.

Should sellers beware? Maybe. While you can definitely see the seasonality of home sales, there is no doubt the rising home sale prices will limit buyers, as will rising interest rates. Rates are expected to rise even more in 2014.

Pending home sales graph Lee County Florida

We also looked at pending sales in December 2013 and January 2014 as this is an indicator of potential future closings in the coming months. Pending sales were down 16.4% year over year in December, and down 6.4% in January. Again, this is a short time frame to look at, and some of this could be attributed to limited inventory, however it could impact reported closings going forward.

We really want to look at how February sales come in which won’t be reported for another 3 weeks or so. Prices will probably be higher and sales could be lower than last year. January thru May sales set the trend for all year, so we’re keeping a close eye on trends these first few months.

Yes, we’ll probably have rising prices. Prices rose again in January to a $180,000 median price and a mean average of $301,035. That’s up roughly 25% or better for both numbers over last year.

Are rising prices limiting sales? Is limited inventory holding back sales? Is new construction competing with existing home sales again? Are rising interest rates limiting sales? Nobody knows the answers yet. We’ve identified some indicators to watch though.

If you’re a seller, you might want to look at how well your home competes against other similar homes on the market. A few weeks ago we posted on our Blog inventory levels by price range. If you have a $ 1 Million+ home there is currently about a 3 yr supply of homes on the market, so you have to look at what you need to do to sell your home versus waiting 3 years. And what if the market falls within 3 years or more listings come to the market? It could take even longer to sell at reduced prices.

If your home is in the $400-600,000 range, there is about a 1 year supply of homes. Again, it pays to know your competition and price accordingly. Our market has been doing well the past few years. 2014 looks to be another good year, but don’t take price gains for granted. There is no law that says prices will rise forever. New construction is now competing against you again for the first time in years. SW Florida may return to a more moderate market, which is probably best anyway.

We’ll keep tracking the trends, and as always, if you need assistance buying or selling in SW Florida, Always Call the Ellis Team. 239-489-4042 or www.TopAgent.com

Good luck and happy buying/selling!


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Each year we announce the official SW Florida real estate year end prices which are basically an average for the year of the median sales prices for residential homes in Lee County Florida.  It isn’t the December year end sales figure as sales in any given month can be seasonal and can vary from month to month depending on what closes in any given month.

Year End Prices Rise 86% From Their Lows

Official numbers haven’t been released yet so we calculated the weighted average median price each month and performed the calculation.  I would expect our number to closely resemble the official number if/when it is released.  Sometimes the Board goes back and revises numbers in the past and we didn’t do that.  We also noticed that the monthly official sales total 12,060 sales while the January 2014 release shows there were 12,144 closed sales for the year, so perhaps they’re revising past numbers again.

In future years we’ll just track sales directly from MLS as we’re now on one system.  Back in 2008 we described the year end chart as something like a shark’s fin.  It still looks that way but at least we’re coming out of the downturn nicely.  You can see we clearly have a ways to go before reaching the highs back in 2005, but 2013 sure looks a lot better than the low in 2009.

In fact, we’re 86.09% better than we were at the lows in 2009.  Each week we provide data and graphs on the inventory levels, monthly price gains, market absorption, and much more, and only once per year do we get to break it down like this.

In a rising market it sure is a lot more fun to look at this graph.  Back in 2007 and 2008 people were wondering when the market was going to bottom, and in 2009 we had our answer.  We saw it on a monthly basis and it’s very easy to see looking at in on a yearly basis.

Many sellers are calling us and pleasantly surprised that they’re now able to sell their home due to the price increases.  Unfortunately there are some sellers that refinanced or bought at the top of the market and didn’t put much money down and they’re still upside down and can’t sell yet.  Each passing month adds more potential sellers who can afford to sell if they wish to.

Each year prices have gone up combined with their mortgage going down which has allowed more to become free from their home.  So many felt trapped in their home while they were upside down, so they just waited for the market to respond.

If you’re a seller, the time might be right for you to sell now.  Inventory is still low and we have buyers actively looking for the right home to come on the market.  Interest rates are still low so moving to your next home is affordable now.  It may not be as affordable in the future.  Plus, the future home you hope to buy when your home sells may be going up in value too.

Keep in mind this is a market snapshot.  Not all homes in all prices appreciate or depreciate at the same rate.  It’s important to speak to a professional who can help you with your situation.  Of course, if you’d just like to snoop around on the MLS you can at www.TopAgent.com.  If you’re considering selling, please give us a call at 239-489-4042.  We’re easy to talk to and we never pressure you.  We’re here to present you with your options and let you choose what’s best for you.

 

Good luck and Happy House Selling!
If you’d like to search the market as either a buyer or seller, visit www.Topagent.com If you need extra help we’re always available to talk to you and help you make better decisions. Our phone number is 239-489-4042 Good luck and Happy House Hunting!

To search the MLS for properties go to www.TopAgent.com or give us a call at 239-489-4042 You can even search for waterfront property in Fort Myers, Cape C oral, or all of SW Florida    Good luck and Happy House Hunting!!!

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2013 final sales numbers are in and again we saw price increases inline with expectations.  The median sales price of a single family home in Lee County Florida popped up to $177,000, up from $170,000 in November and up 24% over last December’s $142,750.  The mean average sale price was only up 12.8% over last year with December 2013 coming in at $269,789 versus $239,186 in December 2012.  2012 numbers were revised upward about $15,000 so that helped to keep the average down to an increase of only 12.8%.

2013 Final Sales Numbers Are In

Aiding in the increase to local housing prices is the limited supply of homes, or scarcity as some buyers like to call it.  About this time of year inventory begins to rise but last year it was hardly enough to keep up with all the seasonal buyers that arrived.  This year it seems the seasonal buyers have arrived earlier, and if they stay as long many are wondering if the inventory levels will hold up.

Season sets the tone for the rest of the year. At the Ellis Team we are working on bringing several homes to the market.  The past several months it seems like we’d list 5 homes per week and sell 7, so inventory levels have gone down for us.  Thankfully they are increasing right now for the overall market.

SW Florida single family home inventory Fort Myers, Cape Coral, waterfront homes

Unfortunately in the 6,169 single family homes currently for sale some will never sell regardless of how low the inventory is.  This is because some sellers are still overpricing their home even in a good market.  This is nothing new, some sellers will always over-price a home and buyers will continue to reject it.  What hurts is missing a good opportunity to sell.  Some of these over-priced sellers actually do want to sell their home; they’re just misinformed about the market.  Either that or they’re under the impression that the seller can always come down but you can’t go up, so they overprice it.

In reality, you can go up if it’s priced correctly because a fairly priced home in a low inventory market attracts multiple buyers who may bid up the price.  An overpriced home attracts buyers who are expecting more and when they compare the over priced home to similarly priced homes they find they get more value in the other homes.  They don’t make offers on the over priced homes, they make offers on the homes that offer more value.

This is probably the biggest misconception sellers have about selling their home.  When you read in the paper it’s a seller’s market, that’s not a license to overprice your home.  It simply means if you price your home at or close to market value, it should attract buyers.  This isn’t always the case in a buyer’s market.  Many years ago we’ve had listings that were priced properly but due to lack of buyers some homes just sat on the market. It took extra marketing just to get a sniff from a buyer.  Of course back then the average time on the market was 9 months or more compared to now.  The median time on the market in December 2013 was 43 days.

If you’re interested in selling, now is a good time.  It’s also a good time to talk to a professional that can help you price it correctly, market it correctly, and take advantage of the many buyers we have shopping for homes.  If you’d like to speak with us, call us at 239-489-4042.  You can search the MLS on our website www.Topagent.com

If you’re looking for a waterfront home to purchase, keep in mind our team is waterfront specialists.  Not every waterfront home in SW Florida is the same.  Some canals have varying depths which limits the size of boat you can have in that canal.  Sometimes the waterfront behind your home may be deep but the waterfront  entrance to the community may have silted in and restrict the depth at the entrance.  Sailboats need more clearance, so you really need to know how much draft your boat pulls, or how much your future boat might pull.

We can help you with all your waterfront needs.

 

Good luck and Happy Selling!
If you’d like to search the market as either a buyer or seller, visit www.Topagent.com If you need extra help we’re always available to talk to you and help you make better decisions. Our phone number is 239-489-4042 Good luck and Happy House Hunting!

To search the MLS for properties go to www.TopAgent.com or give us a call at 239-489-4042     Good luck and Happy House Hunting!!!

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In the past few months we’ve been on several listing appointments and sellers usually ask how their price range stacks up against the market. Current listings by price range really only tells half the story, so this article will attempt to cover the other half.

Inventory by Price Range

Real estate listing Inventory Fort Myers Cape Coral

As you can tell by the published graph, the $100,000-$149,999 currently has the most listings followed by the $400,000-$599,999 range.  By looking solely at the graph one might think there is a backlog of homes on the market in the $100-150k range.  This just simply isn’t true.

Would it surprise you to learn that in that same $100-149,999 range there were 2,670 single family home sales in Lee County last year?  That works out to a 3.61 month supply of homes on the market.  Conversely, the $400k-$599,999 range had 869 sales last year.  This works out to an 11.72 month supply of homes on the market.  Even though the $100k range has the most homes on the market, it is a much healthier market because there are more than enough buyers in that range to absorb the inventory.

Inventory by Price Range

We created a custom graph using the exact same price points to illustrate how each price range is doing.  In essence, the lower the price range, the more range of buyers there are for a home and the most demand.  The market is best able to absorb the existing inventory from the lowest price range on up to the highest.

If you’re a seller with a million dollar plus home, you have about a 3 year supply of homes on the market that is competition for your home.  This is assuming no other homes come on the market.  If your home is in the $400,000-$600,000 price range, you have about a 1 year supply of homes on the market as competition.

It’s easy to see by the graph how your home rates by price range.  This is important knowledge.  If you would like to sell a home in 4 months time or less all you have to do is look at what price range you’re in and see what the competition is.  If you’re in the $600,000+ range which has a 15.96 month supply of homes on the market and you wish to sell in 4 months or less, it pays to be realistic and price your home more aggressively against the competition.

Many home sellers mistakenly believe they can set the price and buyers have to pay it.  It’s true, the seller does set the price, but the market determines the value.  Buyers are not only shopping your home but many others like yours in your price range.

If you have a home to sell it pays to know how much you should sell it for.  We compare your home against like kind comparables that have closed recently.  We also show you how your home stacks up against other current homes for sale.  You never want to under price your home because if you do you just give away your equity to the buyer.  You also don’t want to overprice your home either because if you do you’ll help sell your competition and insure your home stays on the market longer, and history proves that homes that linger on the market sell for less than homes that were priced correctly upfront.

If you have a house to sell, call us at 239-489-4042.  We’ll guide you through the home selling process and cut through all the clutter.  Good luck and happy home selling!

If you’d like to search the market as either a buyer or seller, visit www.Topagent.com If you need extra help we’re always available to talk to you and help you make better decisions. Our phone number is 239-489-4042 Good luck and Happy House Hunting!

To search the MLS for properties go to www.TopAgent.com or give us a call at 239-489-4042     Good luck and Happy House Hunting!!!

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A few weeks ago we wrote about 5 things a buyer should know about Lee County Real Estate, so we thought we’d follow-up with a version strictly for sellers.  5 Things a Seller Should Know About Lee County Real Estate.

5 Things a Seller Should Know About Lee County Real Estate

 

  1. Prices are Falling.  Don’t get too alarmed here as it’s not unusual for prices to fall this time of year.  It’s more of a statistical anomaly.  Prices are still up over last year’s numbers, but they are falling monthly.  Next season will be the barometer.  Some sellers mistakenly believe they can ask anything for their property and it will sell.  This is not true.  Its funny how the seller believes their property is worth so much more than everybody else’s property, but when they are the buyer they look at things differently.
  2. We Must Sell Your Property 3 Times.  First, we must sell it to other agents.  If they believe the property is over-priced they won’t show it.  Next, we must sell it to the buyer.  The buyer is the one out looking at all available like kind properties.  If they feel it’s over-priced relative to other similar listings, they’ll make an offer on something else.  Lastly, we must sell it to the buyer’s bank.  The bank orders an appraisal not for the buyer’s benefit but for their own.  If the appraiser says we sold it for too much we’ve got a problem.  If we fail at any of these 3 sales, we don’t have a sale.
  3. Interest Rates are Rising.  This takes purchasing power away from the buyer.  Every 1% rise in rates eats away 9% purchasing power from the buyer.  If there are a limited number of buyers for your home today, rising rates will chip away and steal some of those buyers from you.
  4. Flood Insurance Rates are Going Up. Some say rates could double or triple on certain properties.  If you don’t sell, this could affect your bottom line.  If you do sell, it could affect the buyer’s bottom line, which could influence their offer.  Your home doesn’t have to be waterfront to be affected.
  5. Rising Values Brings More Competition to the Table.  Yes, inventory is limited today, and it has helped propel home values.  As values rise, expect more competition from other sellers whose value rose above water on their current mortgage and can now afford to sell, or from sellers who are just ready now and have waited for values to climb to a certain point.  Builders are now entering the fray because home values have risen enough for them to be able to compete again.

 

This is actually a good time to sell right now.  The odds of selling right now are as high as they’ve ever been, if your home is marketed and priced properly.  We saw over-priced homes in the height of the Boom fail to sell, and we’re seeing it today.  We are saying we have a good market.  We’re also saying don’t get too greedy or you could be one of those sellers saying I wished I hadn’t over-priced my home back when the market was good.  Real estate works in cycles, and we’ve heard this repeated too often.

 

If you’re considering selling and would like for us to sit down and meet with you, simply give us a call at 239-489-4042 or visit www.SWFLhomevalues.com
Feel free to search the MLS at TopAgent.com. Good luck and Happy House Hunting!!!

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It’s Labor Day weekend which brings lots of visitors to our area for the long weekend. Some return to our area for relaxation and fun and others are new.  Many visitors fall in love with SW Florida and get the itch to buy.  Here are 5 things a buyer should know about our current market. 5 Things a Buyer Should Know About Lee County Real Estate.

5 Things a Buyer Should Know About Lee County Real Estate

1.  SW Florida is a Desirable Place to Live and Work:  In fact large companies like Hertz and Alta Resources are moving their headquarters to SW Florida because it’s an easy sell to employees or future employees.  Not every employee can or will relocate, so companies have to ask is the destination attractive to future employees.  Invariably the answer is Yes to our area.

2.  Prices Have Risen From Their Undervalued Lows:  Back in 2008-2009 SW Florida was littered with foreclosures due to the excess of the mid 2000’s  SW Florida was overbuilt and the flipping frenzy ran out.  Buyers contact us today hoping to buy at 2008 prices.  Some still believe our market has not changed in last 4-5 years and they can buy at those undervalued prices.  That’s just not true.

3. Listing Inventory is Down: Inventory has been falling. January single family home inventory stood at 6,215.  Today it’s down to 4,924 and has been falling every month.  It’s common to receive multiple offers on a property if it’s priced correctly.  Buyers are surprised there may only be 1-4 homes that match their criteria on the market.

4.  Interest Rates Are Rising:  We saw a big jump back in May, over 1% jump in about 5 weeks.  Every 1% jump takes away 9% buyers purchasing power.  That rate swing back in May means a buyer that could afford a $200,000 mortgage before the increase could only afford a $180,000 mortgage after the swing.  Buyer’s purchasing power is going down, and this wouldn’t be the end of the world if prices were falling, but see Point #2.  Prices are rising, not falling.  To make matters worse, we expect rates to go up even further.  The Feds have been keeping rates down with stimulus by buying.  The Fed has indicated they will scale back buying treasuries at some point and this has caused the bond market to react.  We know it’s coming, and some speculate it could happen as early as this September.  When it happens, rates will eventually go up.  If you’re on the fence, waiting to buy will absolutely cost you, even if prices stayed the same.

5.  Educate Yourself on the Market:  It does no good to read articles from 3 years ago on what was going on in the market.  It also does no good to read about one market in the country and expect everywhere you visit conditions are the same.  If you’re new to the area, or even if you’ve lived here awhile, it pays to get the latest data and analysis.  When we go out to a home to do a CMA (Comparative Market Analysis) we have to update ourselves with the latest information.  Even if we sold 15 homes in that subdivision last year it doesn’t help figure out today’s prices.  We arm ourselves with data on each listing appointment.  Why wouldn’t a buyer want the same information when purchasing?

Feel free to visit Topagent.com  You’ll have access to our Future of Real Estate Show where we update you on the market via video and explain the latest charts and graphs.  Or you can read our Blog at http;//blog.topagent.com  Feel free to search the MLS like an agent at Topagent.com, or visit our virtual tours.

If you need help or would like to talk to a professional, we’re here to help 239-489-4042  Good luck and Happy Buying/Selling!!!

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For the most part the Lee County market bottomed out in 2009 at the height of the foreclosure boom.  We had some fluctuations throughout 2010, however most agree the bottom was in 2009.

SW Florida Home Sale Prices 2009-2012
SW Florida Single Family Home Prices 2009-2012

It’s important to note that even though we had an influx of high levels of distressed sales back in 2009, the market was able to absorb these properties, illustrating that we have a market, even at reduced prices.

Some markets don’t really have a market at any price.  Detroit has been down for years and many properties don’t sell even for $1,000.  The banks really can’t give them away, so in some cases they’ve just demolished the home for liability purposes.  I haven’t checked on the Detroit market in a little while, but I haven’t heard any differently, although we’re certainly not Detroit experts.

We’ve learned that we do have a market, and that high foreclosure rates wouldn’t last forever.  Foreclosures are down significantly and we are seeing traditional sales rise.  We know that distressed sales weigh down the market, as evidenced by the median sale prices of distressed homes of about $80,000 compared to the $150,000 median prices for traditional sales.  As prices keep rising more sellers who would like to sell will be able to.

Traditional sales Chart SW Florida Real Estate
Traditional Sales Versus Distressed Sales

Inventory is down to a 3.5 month supply and has been falling steadily.  Most people consider a normal market to be somewhere around 6 months supply.  Anything too much above that becomes a buyers market and anything much below that becomes a sellers market.  There is no question we’re in a sellers market right now as it’s not uncommon to see multiple offers on new properties entering the market that are priced correctly.

Before sellers get too excited reading we have a sellers market, keep in mind general economic conditions still apply.  Buyers still must get mortgages in many cases, and the property must appraise.  Incomes are not rising substantially, and unemployment is still too high.  Buyers have a hard time saving for a down payment in today’s economic climate.  Everything just seems to cost so much, from gas, to insurance, to groceries.  A young family or single person just has a hard time saving with these conditions.

If the economy were to turn around, prices could probably rise faster.  Keep in mind; it’s all supply and demand.  We have demand at the right price, and we have limited supply.  As prices rise, we expect to see increasing supply as sellers could then afford to sell.  Many cannot now because they owe more that house is worth and don’t want to take the hit to their credit report.

Prices are still too low but rising.  Inventory is too low and won’t rise overnight which will allow for price appreciation.  Many people are upside down in the 6 figure range that a 10k or 20k rise won’t help, but as prices rise it does free up more sellers to enter the market.  If our prices suddenly doubled, I assure you we’d see many more homes on the market, which is why it won’t suddenly double.

Conditions today favor a measured approach.  Supply and demand are in play, and if ever a student wanted to study the economic forces, the SW Florida real estate market would make for a great example.

We hope this information on the market is helpful, and if you need help buying or selling in today’s market, feel free to give us a call. 239-489-4042

Most people refer to 2005 as the boom times for SW Florida real estate, and ask when we’re going to return to those days. I guess the partial answer is we’ve not only returned top those days, but we’ve far surpassed the boom times, at least in terms of transactions.

2009 was our busiest year on record followed closely by 2010, not the year 2005 as many people would guess. 2005 produced 12,273 single family home sales compared to 15,205 in 2010 and 16,260 in 2009. In the 1st quarter of 2011 we had 3,819. As you can see by the attached chart, 2nd qtr almost always produces the highest sales volume, followed by quarters 3 and 4. Most people mistakenly believe that season results in the highest number of sales.

Lee County Florida Single Family Home Sales Chart
SW Florida Homes Sales By Qtr

Season may lead to some of the sales that result in the 2nd quarter, but that wouldn’t explain the strong 3rd quarter sales. Remembering back to the 1980’s our biggest closing months were generally in the summer. We usually found a lot of lookers in the season and many of those would come back and purchase in the summer. Additionally a lot of locals had more time to shop and buy in the off-season.

SW Florida real estate isn’t as seasonal as many would think, although condos do still lend themselves to more seasonal traffic, especially 2nd home purchases.

Depending on inventory, 2011 is on pace to place in the top 3 for all-time sales. Prices have risen 15.14% since January, and Lee County is one of the few markets actually gaining in price. It could be that Lee County was hit so hard due to high concentrations of investor homes that banks liquidated so much in the early years, and prices fell too far and too fast. Prices have fallen so far below replacement cost that virtually all building has ceased, and that’s a sign that the market has been artificially too low.

As the rest of the nation enters a housing pullback, SW Florida is showing signs of bucking that trend. Will it last? That answer ultimately depends on jobs and the economy, as well as future foreclosure inventory that may come to the market.

Foreclosure inventory can appear in two ways. First off we have a backlog of homes that began the process but were held up due to legal concerns in the foreclosure process. A few large foreclosure mills were processing foreclosures and collecting big sums of monies from the banks without doing the proper paperwork, and banks have had to start all over again on those proceedings.

Secondly, Florida is a tort state, or what is referred to as a lien theory state, so it takes longer to foreclose than other states. As the economy has deepened, it has affected more people who weren’t investors, but got caught up in the bad economy and perhaps lost a job, had trouble collecting money from people who owed them money, etc. Because Florida has high unemployment, it’s natural to believe it will have higher foreclosures than other states.

The big wave of foreclosure has already occurred, and Florida has largely worked through this, except for perhaps South Florida in the Miami/Ft Lauderdale areas.

The wild card will be how many foreclosures hit the market. Right now we’re not seeing many and its forcing prices higher. At our current sales pace, we will eventually run out of inventory. The question and always has been, how many more listings will we see when banks are able to release inventory, and how many would be sellers will sell once prices reach the point where they can afford to sell. Inventory and the economy will drive this market, and nobody knows the answer to both these issues. As soon as these issued become apparent, so will the height and velocity of our market. Stay tuned and we’ll watch it together.

When you hear the market is falling off a cliff it brings back memories of the past 5 ½ years of a real estate market in free-fall. Anyone reading headlines for the past several years would believe any such headline is another bad story and perhaps would bury their head in despair.

Well SW Florida, a part of the market has fallen off a cliff, and it’s actually good news. Inventory has been eaten up by buyers agents Melbourne faster than it has come on the market, and buyers are actually competing with other buyers to buy the best properties. It’s not uncommon for a property to have multiple offers.

For historical reference, I just checked overall Lee County single family inventory numbers for October 2006 which stood at 12,669. They peaked at 16,694 in February of 2008 and basically held firm until December of 2008 when they began to fall. Currently single family home inventory stands at 9,785.

We’ve included inventory charts for Fort Myers, Cape Coral, and Lehigh Acres because overall inventory numbers can be deceiving. You’ll notice there are some minor differences, but for the most part the lines look similar and all three show a steep decline from January 2011 to present.

Fort Myers, Cape Coral, Lehigh acres Residential Inventory
Fort Myers, Cape Coral, Lehigh Acres Listing Inventory

While national news outlets report the rest of the country could be in for a fall, nationwide analysts fail to recognize SW Florida has fallen for over 5 years and is actually on its way up. All real estate is Local, and our market is artificially priced too low, as much as 40% below replacement cost in some instances. As distressed inventory is shrinking, we’ve seen median sales price increases because the market cannot sustain these artificial low prices forever.

We do expect more foreclosures to hit the market as the legal system has been working through some challenges pertaining to the validity and legal documentation provided by the banks. We don’t believe however there will be enough foreclosures to satisfy buyers’ appetite and we could continue to see rising prices. We don’t believe the next wave of foreclosures will be as large as the first waves, and our market absorbed all those foreclosures just fine.

We’ve seen rising prices, increasing pending sales, and decreasing listing inventory for several months now. The fundamentals point to a recovering market in SW Florida. Wildcards can always influence any market, such as gas prices, terrorism, the United States mounting debt and its effect on interest rates, inflation, Middle East flare-ups, and so on. Last year we had an oil spill that had the potential to influence our market, and in some respects probably did.

Nobody knows for certain what wildcards might present themselves. For instance, not many people predicted a 9.0 earthquake that would lead to a tsunami which would lead to a nuclear crisis in 2011, but it happened. Each event led to and compounded the following event.

Absent any major wildcard events, it would appear that the SW Florida real estate market is on solid ground and mounting a comeback. We’d like to see sustained job growth before we’re ready to see sales prices take off, and this is why we know prices will increase, we just can’t say how fast and how high until more of the picture comes into play.