Lee County listing inventory increased fifth straight month which has led to a leveling off in home prices.  We are seeing September daily listing inventory counts drop slightly so we will keep an eye on official numbers when they are released next month.

Listing Inventory Increased Fifth Straight Month

As you can see by the chart, listing inventory is still very low comparatively speaking.  We look at actual numbers and the trends.  The actual numbers tell us where we are at a point in time, and trends can give clues about the future.  Once a trend emerges it does not mean it will stay, so we must be careful predicting the future based upon a small trend in data.

Median home prices peaked in May and June and slipped a bit in July, however they held steady in August.  Average home prices peaked in April and slipped in May, June, and July.  Average home prices rose slightly in August, confirming the trend that home prices have leveled for now.

Seller’s Market

With 1.1 months of official inventory, we are in a seller’s market.  August saw a rise in new listings of 3.6% and a drop in new pending sales of 10.2%.  The daily inventory numbers are telling as well, and we may see the SW Florida real estate market pick back up again.  Rentals are very expensive, and in many cases, it is cheaper for a buyer to purchase than rent.

The number of homes closed fell again for the second straight month.  Nationally mortgage applications are picking up again.  With Covid cases decreasing dramatically in Florida and the return of Fall, we may see the market heat up once again.

What is unknown is when and how fast interest rates will climb.  The expectation is the Fed will taper asset purchases which have helped keep rates low.  We expect the Fed to announce the start of tapering in November which means rates could rise by the end of the year.

Increased borrowing costs will cut into buyers purchasing power.  Eventually decreased purchasing power helps cap price increases.  The fascinating thing to watch is that the US has been short building units to the tune of 5 million plus.  This has caused a shortage in supply.  Housing demand is strong.  These two forces are at odds with each other, and whichever wins out will hold the key to the direction in home prices.

It is quite possible they will temper each other.  If this happens, we will return to normal price swings and a leveling off, which is a good thing.

Time for Seller’s to Sell

The takeaway for sellers is now may be the time to sell.  The takeaway for buyers is now may be the time to buy. If you are a seller looking to purchase a home with a mortgage, this is especially true for you.

You might ask, how can it be a good time for buyers and sellers to make a move?  The answer is, it may cost both groups to wait.  Most people think of buyers and sellers as dueling warriors, and one must win to the other’s detriment.  The reality is, in this market, both can win now, and both can lose in the future by waiting.

We live in interesting times.  So many factors are affecting our economy, from supply side shortages, to rising rates, to rising inflation.  The Delta variant changed things for Floridians for a few months.  Assuming no new major variants, between the vaccinated and those with natural immunity, Florida is shaping up to be in good shape going forward.  This Fall and Winter will be interesting to watch.

Always Call Brett or Sande with your real estate questions 239-310-6500 or visit www.SWFLHomevalues.com to get an instant value on your home.

The Ellis Team at Keller Williams Realty is here to help you with your questions.  Good luck, and Happy House Hunting!

Ellis Team Weekend Open Houses

Open House Saturday and Sunday 12-3 PM

1936 Savona Parkway, Cape Coral

Cape Coral Open Direct Access Waterfront Pool Home

The last few weeks we’ve been bringing readers up to speed on prices and where they’re headed as well as closings for 2016.  This week we decided to focus on listings.  We’ve been reporting that listing inventory rises slightly for months and here is the latest graph to illustrate that.

Listing inventory is seasonal.  For some reason, more sellers decide to list in season than other times.  I don’t know if they perceive there are more buyers here in season or perhaps they come back to SW Florida and decide to list.  For whatever reason is does go up in season which makes using the trend line a little complicated.

Listing Inventory Rises Slightly

We did add the trend line which does show a rise in inventory going forward.  Year over year numbers are up each month so this is accurate.  The real question is going to be, with slowing sales, rising rates, and stagnant home prices, what will happen in 2017?

Listing Inventory Rises Slightly

The amount of inventory in 2017 will most likely affect home prices as much as interest rates do.  We’ve seen rising prices up until this year partly because listing inventory has been so low for so many years.  As new construction and existing home inventory begins to rise, we’re seeing prices level off. We’re not sure if it’s the chicken or the egg.  Does listing inventory rise because prices stagnate or do prices stagnate because inventory is rising?

We think they go hand in hand and affect each other.  The SW Florida real estate market is totally balanced right now.  You might say it’s a perfectly healthy market.  Buyers and sellers are at an equal advantage right now.  In the lower price ranges, it’s a seller’s market and in the upper ranges it’s a buyer’s market.  The mid-market is balanced.

Buyers, sellers, and agents alike complain when the market is skewed too far in any one direction.  It is not often we can say the market is perfectly balanced, but at the end of 2016 I think we can.  Our market is like a teeter totter and it is straight right now.

As you know, it doesn’t take much to alter a teeter totter and they don’t stay straight for long.  Our market has been slowly moving from a seller’s market to balanced.  It could go either way from here.  It depends on interest rates, consumer confidence, and the economy.

What Role Will Election Play?

We think the election results will go a long way to resolving some of this.  Interest rates will probably rise in 2017.  Consumer confidence will be swayed by the economy and confidence in the election results.

Who holds the presidency?  Who controls the Senate, and the House?  Is the election in dispute?  Is the winner under investigation and facing indictment?  We don’t know how the election will turn out.  Nobody knows how the winner and loser will react post election.  We don’t know who will control congress.  You’re witnessing is the craziest election we’ve ever seen, and could get crazier after the election.

All we do know is we have uncertainty.  Uncertainty may hold back interest rates for a while, but it may also hold back the economy.  We don’t control any of this.  All we can do is advise our clients and help them make the best real estate decisions for their family.

If you’re thinking of buying or selling, call the SW Florida real estate authority, the Ellis Team, 239-489-4042  or visit our MLS website.  While we may not be able to tell you who will win the election, we can advise you on your real estate decisions.  Use our website to find out how much your home is worth for Free or search the MLS.  Neighborhood market reports are available for neighborhoods you’re interested in.

And be sure to buy some popcorn this weekend because next Tuesday will be must-see TV.  Good luck and Happy House Hunting!

Open House this Weekend

Ellis Team Open House Gateway
Gateway Open House

 

 

R

 

 

 

Sunday 1-4 PM

10951 Championship Dr

 

 

 

 

 

Ready For a Yeti?

Find out how you can win a Yeti cooler valued at $350.  It’s easy and it’s fun.

 

We’ve been talking about price increases and low inventory for months, so this week we thought we’d revisit some data and provide an update on inventory supply in SW Florida.

Update on Inventory Supply in SW Florida January 2015

Back in January we analyzed the supply of inventory and compared it to May of 2014.  Since January there have been some changes.  All price ranges of inventory supply fell except one.

The $600,000 to 1 Million range actually increased from a 14.12 month supply back in January to a 16.64 month supply today.

Update on Inventory Supply in SW Florida July 2015

The overall market stands at 4.52 months compared to 5.5 months back in January.  Anything less than 6 months is considered a seller’s market and the overall market certainly qualifies for that.  In fact, anything up to about $400,000 is a sellers market and up to about $600,000 is a neutral market.  Once you start getting up over $600,000 there’s more competition for the buyers as there are less buyers and more inventory available.

For instance, back in January there were 579 homes on the market priced between $600k-$1 Million.  Today there are 807.  That’s a 39.38% jump in inventory. Thankfully we had 90 more sales in the past year in that price range which helped offset the large jump in inventory or the months supply would have been larger.  It would have jumped to 19.68 months were it not for the increased sales.

Otherwise listing inventory pretty much dropped across the board. In the $100,000-$150,000 price range listings dropped from 721 to 457 while sales actually increased in that price range.  Hence why you see only 1.87 months supply of inventory.

Even the $1 Million+ price range saw a shrink in inventory and an increase in sales.  It’s no secret that prices have been rising in SW Florida and now you can see in clear detail the reason why.

If you’re a seller it pays to know the inventory levels.  If you have a home in the $400,000+ range you may need some extra advertising to stand out from the crowd, and you want to make sure your price is in line as buyers have more choices.  You don’t want to price yours and help sell your neighbors home.

If you’re a buyer this is useful information as well.  It’s easy to focus on your search and see other homes, but when you get a bird’s eye view of the market you can better decide how strong to make your offer and how quickly you may need to step up.  In some price ranges you’re not really in competition with the seller.  You’re in competition with all the other buyers looking for the most desirable homes in your price range.  The real question is, if you don’t get your first choice home, how happy are you going to be with your 2nd, 3rd, or 4th choice, assuming there even are other choices?  In some neighborhoods you’re lucky to find 1 or 2 homes on the market.

It’s very frustrating missing out on Hot properties.  One way to stay on top of the market is to search the MLS at www.LeeCountyOnline.com Not only can you search the MLS for exactly what you want, the system will also email you when matches reduce their price or when new homes enter the market that match your criteria.  This helps buyers beat out other buyers to Hot new listings.

If you’re a seller, we’ll sit down with you and analyze where your home stands in the market, the best pricing strategy for your home, and how we would market it to make it stand out from the crowd.  We can even help you sell your home and help you search for another one. Give us a call at 239-489-4042

 

Good luck and Happy House Hunting!