Cape Coral, FL, March 16, 2016 --(PR.com
)-- SW Florida real estate is always a hot topic of discussion amongst buyers, sellers, industry experts, and so many others calling Southwest Florida home! Recently, the annual Market Watch had the community buzzing once again about real estate. No doubt Market Watch has developed into a “take notice” event that people look forward to each year. The presenters are well respected professionals by Re/Max and in the community. The Re/Max Realty Team has tracked and analyzed data of the market for the past 7+ years. This year, the Re/Max Realty Team takes exception to some of the data shared.
1. Realtors do not establish the market and never have. True market value is what a willing, able, and ready buyer will pay for a home and a seller will sell. Realtors are the medium to bring those parties together but realtors do not set the prices.
2. Yes – sales were down 30%, if you compare December 2015 closed sales to January 2016 closed sales, but that is very seasonal. There is always a push to get sales completed before the end of the year for a variety of reasons, thus a spike in sales in December is always followed by lower sales in January. The local market is a very cyclical one and follows similar patterns every year. This year is no exception. But taking a snapshot of December-February does not tell the whole picture.
3. Though the area has a “peak season” of visitors and snowbirds – the real estate market is better defined by the normal “cycles” experienced rather than a peak selling season.
· First Quarter always brings an increase of inventory. Many sellers believe they need to put their home on the market as visitors arrive. Every January, there is an increase in the number of homes on the market. In Cape Coral alone, the inventory went from 1594 active single family homes in December 2015 to 1834 single family homes in January 2016. Often this pushes the market into a buyer’s market, causing many buyers to wait. When there are many homes that are priced and appear similar, there is no sense of urgency for a buyer to purchase, thus sales in the first part of the year tend to slow down.
· Second Quarter is when sales become stronger. The strongest months in terms of home sales are in the second quarter. Typically, some price reductions occur due to the increased inventory from first quarter. Then buyers start to buy and the inventory shrinks – often reversing it to a seller’s market.
· Third Quarter typically brings a healthy balance of listings coming on the market and listings sold. Listing inventory usually begins to fall Quarter 3 as sales begin to rise nudging us further into a seller’s market.
· Fourth Quarter sees an increase in sales as people want to get it done by the end of year.
4. There are five indicators that the office diligently tracks and monitors each month:
· Existing Home Sales
· New Home Permits
· Mortgage Loan Defaults
· Foreclosures Sales
· Interest Rates
Research has found that at least three of these need to flow in a certain pattern to define market conditions. Monitoring this data closely enables us to see significant changes for several months before defining a shift in the market. For example, see existing home sales decline, new home permits decline, and increase in mortgage loan defaults, then notice is taken that a downward shift is occurring. It is also important to track the number of homes on the market, number of closed sales, the average list and sales price. When there is 4-6 months of inventory, it is called a neutral market. When there is more than seven months of inventory, then it becomes a buyer’s market. When inventory is less than three months, it becomes a seller’s market.
In 2015, the market experienced a 10.3% increase in appreciation in Cape Coral and a 9% increase in Fort Myers. It is still too early in 2016 to say with certainty what this year will bring in values and sales but thus far it is appears to be following a similar trek as in 2014. In January, 2014, there was a large increase in the inventory that came on the market, we saw typical slower sales for January and February. That did not stay long, 2014 ended with a 5.3% in appreciation for Cape Coral and a 9% increase for Fort Myers.
Re/Max Realty Team predicts people will continue to move to beautiful Southwest Florida – Baby Boomers continue to retire and Florida’s income tax-free status attracts retirees and high income earners. Real estate agents don’t hold a crystal ball, however the market is constantly showings signs, and knowing where to look at how to interpret these signs is the greatest asset to clients.