Today we would like to share with you three timely real estate trends we are keeping an eye on in SW Florida.
Timely Real Estate Trends
The first is median time to contract. This is the amount of time it takes the average property to go under contract for sale. As you can see from the chart, it rose to 79 days. That is a 11.3% rise from last year in June, and up considerably from May’s 47 days. For the year however, we are still at 64 days, which is down 9.9%. We will be keeping our eye on this metric.
Secondly, we are looking at new pending sales which were up 28.3% in June. Some of this is pent-up demand from the previous months and some is the fact that interest rates are at historic lows. Buyers do not want to miss out on this opportunity.
Lastly, we are looking at new listing inventory. New listings rose 9.6% in June 2020 over June 2019. The issue is, new pending home sales were up 28.3% in June and up 2.2% in May, while new listings were down 1.6% in May and down 33.7% in April.
You cannot have new listings down over 30% and new pending sales up 28% without it eating into existing inventory. Existing stood at 4,090 listings in June, which was down 28.5% from last year. This is a direct correlation between the three metrics we are analyzing in this article.
It is possible this market just re-balanced to the levels we are at today. Or, it could be that sales are not higher than they are simply because there is not enough inventory to sell. In other words, perhaps sales would be higher if there was more inventory.
We are seeing the most housing inventory gains coming in the $250,000-$300,000 range and in the $400,000 and up range. Inventory is down below $250,000 and flat between $300,000-$400,000.
Other Timely Real Estate Trends
Another trend we are seeing is agents from Miami coming over here with their clients and attempting to sell property over here. Official June numbers show Palm Beach, Broward, and Miami-Dade areas with 3.9 months supply of homes on the market. Lee County has 3.6 months, so technically we have less supply than they do relative to number of home sales. It is possible they dipped recently and are sniffing over here for available properties to sell.
We saw this trend back around 2005. It’s not fun because usually they have pre-qualification letters from Miami based lenders and we did not always find them to be legitimate. More times than not, those buyers failed to qualify even though they had an out of town lender tell us they were golden. It got so bad that local Realtors would require a local lender look at the buyer to make sure they were indeed qualified. When I look at a pre-approval letter, I want to know that buyer can perform before taking it off the market for our seller.
The buyer may have been qualified, who knows. In the end, the lender could not get the job done, and that gave agents fits because they worked so hard to find a qualified buyer only to find out they weren’t qualified, or the lender couldn’t perform.
No matter where you purchase, we tell customers to use a local lender, or a national lender with a reputation for results. Otherwise local agents won’t trust your pre-approval letter and your offer may not get accepted, especially if there are multiple offers. You do not have to use the local lender, just get a pre-approval from one so the sellers know you are qualified.
Realtor You Hire Matters
In a shifting market, the Realtor you hire matters. This is true on the buying and selling side. Always work with an agent that has years of experience in all kinds of markets, and several hundred if not thousands of homes under their belt. The Realtor makes good money, and they are worth every penny when you need them. It’s times like this when you really need experience you can count on.
Feel free to call Brett and Sande Ellis 239-489-4042 Ext 4. We’re here to help. Or visit www.swflhomevalues.com for a free home value analysis.
See last week’s article “Refinance Existing Home Versus Sell and Purchase New Home”