TOM & SUE DEMOGENES...
"YOUR INFORMED REAL ESTATE COUPLE"
SW Florida Vacation Season Ends - But Not Real Estate Season
April 30th typically marks the official end of Snowbird Season, and a procession of out-of-state cars can be seen heading north on I-95 and I-75. This year is no different with regard to vacationers, as evidenced by the fact that the roads are not as congested and restaurant seating is available again (even if we arrive after 5 p.m.)
Real estate season is another matter altogether. May is not only not experiencing a slowdown, but may be as strong or stronger than our typical "high season" sales months. Here is my analysis as to why real estate season will last well into June, and possibly right through the summer:
1. Due to the improving real estate market in the rest of the country, this is the first year in many years that northerners have been able to sell their homes and not lose money. Many people, especially millions of retiring Baby Boomers, have wanted to relocate to Florida but were financially unable to if they couldn't sell their homes.
2. The improving real estate market (new construction in particular) is creating many new jobs, and the people working at these new jobs need housing. A self-perpetuating economic boon.
3. Northerners normally put their homes on the market in the springtime, with plans of closing in the summer, before school starts. As soon as those homes sell, they will be down here to buy.
We have numerous clients in the above scenario that are looking at properties on Listing Book, our top search site for SW Florida. Some future buyers have come down to determine how much house they can purchase in their price range, and will purchase as soon as their northern home sells.
Some clients have asked about submitting an offer contingent on their home selling. We only recommend this if the home is under contract with a solid buyer, and the inspection and appraisal on their existing home are completed. It is a much more common practice up north to make offers contingent on an existing home sale. That is not the case here at all.
Often a seller in Florida will only accept a "home sale contingency" if the buyer is willing to put down a non-refundable deposit. If the buyer is not confident enough that their home up north will actually sell, then a local seller does not want to take their home off the market while real estate sales here are red-hot and inventory very low.
Tom's May Stats & Facts
Florida/Lee County Unemployment Rate Plunges: Lee County, which had a 9% unemployment rate a year ago, dropped from 7.4% in February to 6.8% in March. Florida's rate dropped to 7.8% to 7.5% in March, the lowest rate since Aug 2008. Tom: Am I confident enough to predict that Florida will see unemployment in the 6's, and Lee County will fall below 6% by year's end? If my analysis is correct about how many northerners are planning to sell their homes this spring, and then buy down here then the answer is YES.
Cape Coral Gulf Access Lots up 83% in One Year: This time last year the average gulf access lot price was $55,000. One year later the average sale price is $101,000, an astounding 83% increase. Tom: Over the past year I've been encouraging clients to invest in gulf-access lots, as Sue and I have done (5 lots purchased). As we are still about 225% away from peak prices of gulf-access lots (early 2006), I'm again encouraging investors to consider gulf-access lots as profitable investments.
Hertz Moving Corporate Headquarters to Lee County: In a bombshell announcement and a nine month selection process, Hertz Corporation has announced they will be moving their corporate headquarters from Park Ridge, N. J. to Lee County. They will spend $50 million to build their headquarters on 34 acres. The company will build a 300,000 square foot Tuscan-style building in Estero with car rental and sales operations.
Once fully operational, the company will be bringing at least 700 jobs paying an average of $102,000 a year. "This is a major victory for our state, and this reinforces that this state and Lee County are great places to do business" announced Gov. Rick Scott. Tom: What an economic boost for our area, and it won't be surprising to see other major companies also make the move to this area.
Flood Insurance Notice: June 1st is the official start of "hurricane season". Since most policies don't take effect until 30 days after submitted, it is recommended that you get your flood insurance intact if you are in a flood zone. Not too much to worry about just yet, as any potent hurricanes don't usually occur until mid-July through September.
Bidding Wars Are Back: CNN Money reports that bidding wars have returned in many parts of the country. In San Francisco, Sacramento and Southern California 9 out of 10 homes get multiple-bids, and the same is true with 2/3 of the homes for sale in Boston. The average list-to-sale price in the U.S. is now at 97%, and the days of offering far below asking price are gone. In some hot spots in the country if you offer less than asking price your offer won't be in the top 3 or 4 best offers, and won't even be considered by the seller.
Houses Selling Faster: According to the National Association of Realtors, houses in the early part of 2013 sold in 71 days, down from 99 days a year ago. Tom: Can we say "Inventory is Low - Demand is High"?
Foreclosure Inventory Way Down: According to Core Logic, U.S. foreclosures dropped by 23% from March 2012 to March 2013. Tom: Although we still hear the term "shadow inventory" bandied about, the inventory has indeed been kept in the shadows - for about two years. Based on how low inventory is locally, some foreclosure inventory would be most welcome to realtors and buyers.
Smoker's Home Can Lower Value: A recent survey found that smoking in a home will lower the value of the property by 10% - 29%. 88% of real estate agents said it's more difficult to sell a home where owners have smoked inside the home. 27% of buyers are absolutely unwilling to buy a home where people smoke. Tom: There are many corrective measures that we can take to make a home as clean and fresh as a "smoke-free" home prior to putting it on the market.
Client Question of the Month
Out Of State Buyer: When do you think your market will hit bottom?
Tom: ?!&%$#. Our market hit bottom in August of 2010. The median price at that time was $125,600 and the average price per square foot was $66. Currently the median price exceeds $200,000, and is over $100 price per square foot.
* Canadians Play Big Role in Florida Market Rebound
* Are Higher Priced Homes a Bargain Over Time?
* Lenders Loosen Up on Home Loans
* Florida Ranks #6 for Taxes Paid by Small Businesses
* Later Marriage Trends Don't Delay Homeownership
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?
Topics: Local Home Prices Up 32% - Is It Too Late to Enter the Cape Coral / Ft. Myers Market?