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As people begin to flock down south to Florida this season there is a lot of interest in how the market is performing lately. Tourists love our Florida waterfront homes and while it’s cold in many parts of the country we are lucky enough to enjoy fabulous weather tourists want to get in on that warmth and sunshine too. So what’s happening with our market and how can we expect the coming season to perform?
The biggest news is with inventory. Though some media reports are inaccurately reporting a 14% jump in housing prices – there is some promising activity that will drive our market toward stronger stability and toward an upswing.
Inventory Down As Much as 40% In Some Areas
At the moment we are reporting inventory levels down about 30% in Fort Myers, Bonita Springs and Estero. The Cape Coral and Lehigh area is experiencing an inventory drop of a whopping 40%! Even though sales have been strong and we are doing better than just a couple of years ago when there was a plethora of foreclosures and distressed sales, this inventory drop is for a reason.
For much for the previous two years and more – the majority of our inventory down in Florida has been that of bank foreclosures. As those properties continue to dry up we will continue to see active changes in our inventory levels and a corresponding shift in statistics that might not make sense for a while till things stabilize completely.
High-End Home Sales Up
The most well received change in our market has been the increase of upper-end homes that have recently gone into pending or sale status. To give you an idea, last year’s home sales in this category were a total of 75 around this time of year. The same category reported a spike in sales this year with over 126 million dollar homes sold or coming into pending status. This is almost double the previous year’s sales in this real estate niche!
Condos, Mid-to-High Level Single Family Home Prices Down
This activity is having a stabilizing effect on our prices for most areas of the county. In fact, we are only seeing property price increases in single-family waterfront homes that are on the low-end of the pricing spectrum. Single-family homes in the same lower-priced bracket in the rest of the area regardless of not being located on or near the water are also going up in value. Still hard hit with oversupply, however, are condominiums and homes in most gated communities. We also continue to experience a slight decline in housing value for vacant land lots in our area.
Reading Between the Lines
With all this activity in one segment of the industry, naturally the statistics will be inaccurate for a while as the rest of the market stabilizes. In fact, one media source reported a jump in average home prices in this area of as much as 14%. Though that would be fantastic it is unfortunately not true. The only reason home prices appear to be higher is because of the spike in high-end sales versus lower priced foreclosed property sales. There are fewer bank foreclosures selling, skewing the numbers down from those of last year and there is increased high-end selling that is skewing the numbers up.
With low inventory, low prices and low interest rates – the market condition presents a perfect situation for buyers and as the months go on there will be increased selection to choose from. Sellers are encouraged to list their homes for sale sooner rather than later. As the holiday’s approach there is a consistent spike of inventory that results from sellers listing their home in the last 90 days of the year in time for the season. The sooner a home is listed, the better the chances for a successful and prosperous transaction. At the end of the day, it is important to keep our focus on the fact that a lot more expensive homes have sold – news that is promising everybody.
