TOM & SUE DEMOGENES...
"YOUR INFORMED REAL ESTATE COUPLE"
July 2013 Real Estate Newsletter
Summer Weather Heats Up - Real Estate Sales Remain Hot
For a few days leading up to the 4 th of July it had become real quiet on the real estate front. We were uncertain if it was due to the holiday week, or if the annual Spring/Summer slowdown had finally arrived, albeit two months later than normal. After a relaxing two days and very pleasant Independence Day, a flurry of business activity on July 5 th put things in crystal clear perspective.
It seemed that our northern clients were enjoying the holiday, but were ready to resume their property search with gusto as soon as the 4th was over with. We do appreciate them being so polite and considerate for a few days, but we are glad to have them back in search mode before prices rise much more. We're seeing many more out of state license plates than is normal for this time of year, and those people are not here in June/July for the weather. They're either buying a home or have recently moved here. Many of the plates are from states that are not traditional Florida transplants, states such as Texas, Alabama, Arizona, California, Georgia, etc. We've even seen a few license plates from Alaska. BRRRRR
As we have been stating for months, many northerners have been waiting for years for their market to pick up so they could sell their homes and come live in Paradise. Not a week goes by that we don't hear from out-of-state buyers who have their home on the market, or under contract, or recently sold and now wish to buy a home in our area. One of my favorite expressions is; If it wasn't for grandkids there might not be anyone left living in the north, and Florida might fall into the ocean from the weight of so many people". Grandchildren are a big reason why many retirees only spend half the year here.
Normally July, August and September are very slow real estate months. Based on so many buyer inquiries it seems that there will be minimal slow down this year. My impression is that September to perhaps mid-October might see a reduction in sales activity, before our annual "high season" starts in mid-October. However, it wouldn't surprise me if the SW Florida real estate locomotion just keeps plugging along right through the typically slow months.
Tom: The average home sale price in June is 28% higher than a year ago. $202,000 sales price is only 3.4% below list price of $209,000. Both stats signify a very strong real estate market.
Tom: You can see from the stats on the right hand side that the number of distressed sales (short sales and REO's) has been greatly reduced over the past four years and traditional sales now comprise the majority of home sales.
Tom's Monthly Fun Facts
* Same-Old, Same-Old...in a good way: Inventory is down, prices are up, foreclosures are down 27%, new construction is soaring, consumer confidence continues to rise, and interest rates are still quite low (despite going up recently). We won't bore you with the mundane stats supporting all this positive information.
* Unemployment in Florida drops to 7.1% (May) vs 7.6% National Average
* Pine Island Road Widening: Starting very soon Pine Island Road from Chiquita Blvd to Burnt Store Road will be widened. The project is scheduled to be completed within a year.
* Lot Loans: A reminder that there are now lenders willing to provide loans on lots. They will lend for 10 years with 25 - 35% down payment, and an average interest rate of 7.25%. Waterfront lots and new construction on those lots are currently Tom's top real estate investment choice.
* 10% Down payment Mortgages Coming Back: According to Forbes.com some lenders are once again offering 90% financing on home loans. For the past several years lenders have tightened their underwriting standards and raised their down payment requirements, mostly by enforcing a minimum down payment of 20%. The large down payment has kept many buyers on the sidelines. Applicants must have a credit score above 700 and have monthly housing, car, student loan and credit card payments that total no higher than 45% of earnings. Tom: Relaxing of the down payment requirement will further provide fuel to an already strong real estate market.
* Naples Tops "Healthy Living" Poll in Florida: Healthy Living has ranked Naples/Marco Island the fifth fittest metro area in the U.S., and #1 in Florida. The report states that beaches, parks, and the tropical climate make it easy to maintain a healthy weight. Boulder, Colorado took the number one spot.
Client Question of the Month
Client: "Is it better to use my home state lender or a local lender in SW Florida?"
Tom: This is a question that is asked often of us from out-of-state buyers. Not only is it an easy answer, but the advice should be followed if a buyer wants a smooth and more certain closing.
National lenders lack local market expertise: This can be especially critical when it comes time to do an appraisal on your home. National lenders tend to use national companies to complete the appraisal process and this means less knowledge of our local market (which is rising much faster than the national average). A low appraisal can result in a loan denial and jeopardize the entire transaction.
A local Florida mortgage lender on the other hand not only has firsthand knowledge of Florida laws and the local housing market, but has built a network of trusted title companies and appraisal companies. One other advantage is that a mortgage broker has access to numerous loan programs, whereas a buyer's local bank back home typically has only one loan program.
We have a very knowledgeable, professional and courteous mortgage broker we recommend to clients. She has closed on every loan we have referred to her, and all our clients have been extremely pleased with her service.
2nd Client Question of the Month
Client: "I would like to save the commission and try to sell my home on my own"
Tom: If only specialization were that simple then we could also act as our own attorney, and perform our own dental work. For much of the 4 decades that I've been in the real estate business the average price differential was 7 to 10 % less for a FSBO home compared to one sold by a Realtor.
In 2012 an extensive study by Northwestern University and the National Association of Realtors reported that the average home sold by a Realtor had a 19% higher price, and sold in three weeks less time than homes sold by FSBO.
Main Reasons FSBO's Said They Have Difficulty Selling:
1. Lack of understanding of contracts and other paperwork
2. Knowing the market and getting the right price for the property
3. Preparing/Fixing up the home for sale
4. Helping buyer obtain financing/title company and inspectors
5. Attracting a sufficient amount of available buyers
6. Having enough time and knowledge to devote to all aspects of the sale
BOTTOM LINE: For the privilege of being saddled with all the work and stress of selling a home a FSBO loses an average of 13% (19% lower price less 6% commission savings). Certainly not a wise investment of time.
* Once in a Lifetime Opportunity To Buy a Home
* Bill to Speed Foreclosures now Florida Law
* Banks Loosen Standards on Down Payments
* Underwater Homeowners Ranks Shrinking
* Fort Myers Beach Sunset....By Sue of course
* U.S. Home Prices Rise 12.3% in May - Most in 7 Years
Congratulations to our New Associate, Kim Arasimowicz. Kim was the top producer at RE/MAX Realty Team for the month of June, a nice honor considering RE/MAX has over 100 agents, and is the top selling real estate agency in our area month after month for many years. Kim's excellent sales numbers edged me out of the top spot for the month, but Sue and I couldn't be happier or prouder of our protege.
Also a big congratulations goes out to our company, who was the main sponsor of Red, White and Boom, the annual 4 th of July Celebration at the Cape Coral Bridge. This was the 4 th year RE/MAX Realty Team hosted the successful and enjoyable event.
Topics: Cape Coral/ Fort Myers Home Inventory Under 3 Months- Lot Loans Available Again After Long Absence- SWFL Seasonal Rental Market Is Very Strong
Topics: Vacation Season Ends- But Not R.E. Buying Season- Gulf Access Lot Prices up 83% in One Year- Bidding Wars Are Back
Topics: Best Local Real Estate Year in 7 Years? - Seasonal or Annual Rentals - Which is better for Owners? - Construction Labor Shortage
Topics: Short Sales vs Foreclosures - Major CC Gov't Happenings - Future Appreciation in SWFL
Topics: Snowbirds Race to Snatch up Florida Housing - What are the Best Gulf Access Home Areas?