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SW Florida Home Sales Flat This Season

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SW Florida real estate agents were expecting big numbers this real estate season, and so far, we’ve seen SW Florida home sales flat this season.  The real key going forward will be March and April numbers when they are released over the next two months.

SW Florida Home Sales Flat This Season

We have a crystal ball that tells us how sales numbers might come in.  Pending listings leads to closed sales.  While not all pending sales close, we can generally track future closings by the level of pendings.

Pending inventory is down 5%, so it’s logical to believe that we won’t see a major increase in future closings unless many more homes go pending at the end of March.

SW Florida Home Sales Flat This Season Summary

Inventory levels have risen 6.1% from last year and month’s supply of inventory has risen 11.1%  While SW Florida is a large and diverse market, overall this tells us the market has cooled a bit as inventory is growing with fewer pending home sales.

We can’t judge a book by its cover.  The cover may say we have a healthy, slightly cooling market, and that’s OK.  This book however has many chapters, and each chapter tells a different story.  Collectively all the chapters combined give us the overall figures.

Homes priced below $300,000 are on fire, and even many homes priced higher are receiving multiple offers.  We have a good market and demand from buyers.  Prices have risen steadily in recent years and there is a cap to this.

Home sellers many times price ahead of the market.  In a rising market, each new seller prices just higher than the last sold and it seems to work, until one day it doesn’t.  This tells us either the market is taking a pause, or the market has capped relative to the income typical buyers have to qualify for that bracket of home.

Rising rates also influence home affordability and can cap prices.  We’ve seen a few rate hikes by the Fed with more coming.  On balance, we have a healthy market and I like where we’re sitting.

SW Florida Home Sales Flat This Season

As in any market, it’s imperative to price your home where the buyers are.  In a shifting market advertising and marketing plays a larger role as well.  Full market exposure brings the highest possible price, so don’t settle for inexpensive or non-existent advertising.

If the agent you interview tells you advertising doesn’t sell homes, it’s probably because they don’t advertise homes much.  Perhaps they prefer to advertise their public image, or perhaps they just don’t have the budget to market listings.  In any event, it pays to interview agents that do advertise so you get full market exposure.

We’d be happy to sit down with you and cover all the ways we advertise homes.  You’d probably be surprised at the difference, and this might explain why certain agent’s homes sell faster and for more money than others.

If you’re a buyer, we can help too.  Our market knowledge and monthly market statistics help you make the best decision possible.  When competing in multiple offer situations you need an agent that knows how to help your offer compete.  If the chapter you’re looking in happens to be a cooling market, you don’t need to stretch too much and overpay.  Let a seasoned professional from the Ellis Team help you.

You can search the MLS like a pro.  Our database is updated every 5 minutes and contains the latest listings, price changes, and information you need to compete.  If you’re a seller, you should check it out too.

Always Call the Ellis Team at 239-489-4042 and ask how we can make your dreams become reality.  It pays to work with professionals that know the market.  If you think working with a professional is expensive, just wait until you hire an amateur.

Good luck and Happy House Hunting!

Ellis Team Open House

Open House Saturday 1-4 PM

15047 Balmoral Loop

Gated Community

3 Bed 2 Bath Pool Home

$317,000

Rising Mortgage Rates Motivates Home Buyers to Act Quickly

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Rising mortgage rates motivates home buyers in position to buy to do so sooner rather than later.  In a rising rate environment like we are in right now, It costs home buyers in two ways.

First, their purchasing power goes down about 10-11%.  Let’s say a buyer picks out a home at their max budget of $1294/mo.  This is the figure their lender approved them for based upon their income of $51,765  Not long ago rates were at 3.625%  Today they are at 4.25% and according to Ruben Gonzalez, staff economist at Keller Williams, rates should gradually increase throughout 2017.

Rising Mortgage Rates Motivates Home Buyers

If they go up another .4% or so, we’ll have had a 1% increase in a relatively short period of time.  Nothing has changed for the buyer.  If they were maxed out for a home at $200,000 a few months ago, they are now maxed out at $180,000.  Their job didn’t change.  Their finances didn’t change.  The only thing the changed was interest rates, so they just lost 10% purchasing power by waiting.

Rising Mortgage Rates Motivates Home Buyers

If the selection of homes didn’t look enticing at $200,000, it will look even worse at $180,000.  Waiting may have just cost this buyer a chance to buy a home at all.

Secondly, if this buyer was not maxed out at $200,000, buying the same home will now cost about $50 more per month.  Over 30 years that equates to $18,000 in extra interest payments simply because rates went up.

Rates are still historically low.  Many people remember back to double digit rates or even worse.  To think that we’re even warning people about rates in the 4’s is comical, except for the fact that it’s real money.  Home prices are much more today than they were when rates were in the high teens.  So many things cost much more today, like gas, health care, groceries, etc. than they did decades ago.  Even though rates are low by historical standards, we now have to stretch that money further because everything else has gone up so much.

It’s hard for young people to scrimp and save money for a down payment.  Add in homeowner’s insurance, rising rates, and high costs of everything, and we see the pressure on first-time homebuyers today.  First-time home buyers are a springboard to move-up buyers, so if we eliminate first-timers we one day won’t have move up buyers.

Don’t think that rising rates only affect first-timers.  It affects all segments of the market.  It may help cash buyers in that rising rates pay greater returns on savings, but it still affects all price ranges as it trickles up sooner or later.

If you’re a seller, you’ll notice someday there are less buyers for your home than there once was simply because less qualify at the higher rates.  Less buyers can be a drag on home prices.  If rates keep rising it could take some steam out of the housing market.  If you’re waiting for higher prices later, you may be sorely disappointed if they don’t rise at the pace you’re expecting.

Many sellers replace their current home with another home, and if they’re getting a new mortgage on that home they may be in for some sticker shock when they get that new loan.  It can cost you buying your next home, and selling your existing home.  Rising rates are no fun for buyers or sellers.  Low rates are one of the factors that have propelled the real estate market.

We feel the SW Florida real estate market is fairly valued.  We don’t see risk of decline like we had back in 2005.  However, rising rates may damper future gains.  Even though wages may increase, rising rates may offset those gains and help keep prices steady instead of rapidly rising.  In other words, if you’re waiting to make a move, be warned.  Whether you’re a buyer or seller, the risks are the same.  It will cost you to wait!

Feel free to search the MLS like a pro at www.Leecountyonline.com for your next home, or just get an idea of what homes are selling for.  To talk with a real Pro, Always call the Ellis Team at 239-489-4042  We’ll advise you so you can make a great decision for your family.