TOM & SUE DEMOGENES...
"YOUR INFORMED REAL ESTATE COUPLE"
October 2013 Real Estate Newsletter
In September, for the first time since January, median home prices in the Cape dropped below $200,000. Is September's median price drop to $193,000 a sign that prices are moderating, or even dropping? We strongly believe the answer is no, and here are 4 reasons why:
1. September 2012 prices were $165,000. Last month's Cape Coral median home price of $193,000 represents a 17% year-over-year price increase.
2. September 2013 marked 33 consecutive months that year-over-year prices have risen in the Cape Coral/Ft Myers market. Until there is a drop in year-over-year prices the local real estate market is still on the upswing
3. Sales activity always drops off in the summer, with less sales in general, and specifically less upper-end waterfront sales. The sales figures for September, October and November are from contracts generated during the relatively slow summer months.
4. Because of reduced inventory, and the fact that new construction costs have narrowed the pricing gap between existing home prices (especially on upper-end waterfront homes), many of the expensive homes that would have boosted median prices in the past three years are not included in the stats this year. Most of these new construction homes are custom built homes that are not reflected in MLS sales stats. If you drive around the SW section of Cape Coral you will see a tremendous amount of new construction, with the preponderance being gulf-access luxury homes.
We expect Cape home prices to stay near or below the $200,000 mark over the next few months, but still well ahead of last years same month prices. As stated in past Newsletters, we expect several more years of rising prices before we reach the next peak. Be assured we will report when it appears that the next peak has arrived, and even beforehand as we detect the signals and trend.
Buyers: Many of you are planning to come here after the holidays to make a purchase for your full-time or seasonal home. If your schedule allows, we strongly suggest you try to take a 4 or 5 day trip here before the first of the year. By purchasing a few months prior to the mass of visitors who arrive beginning in December, you will save 10% or more on the price of your home.
Additionally, you get a one year head start on the Property Tax Assessment start date by closing on a home before January 1st. This can mean $1,000 to $2,000 a year lower property taxes for as long as you own the home. Contact us for further explanation if needed.
We make a higher commission when prices go up, but anyone who has dealt with us knows that we much prefer for our clients to save tens of thousands of dollars on the purchase price of their home, than for us to make a few hundred dollars extra commission. Karma.....
Sellers: Clients planning to put their home on the market this season should be contacting us now to get your home properly prepared. Our workmen are extremely busy this year, and will need ample notice to do repairs or cosmetic improvements. We will also need notice, as we are much busier than in past years. We are helping numerous clients prepare homes for sale, and helping numerous out-of-state buyers looking to buy before the higher seasonal pricing kicks in. Bottom line: please contact us as soon as possible so everyone has adequate time to properly get your home in "show-ready condition".
Underwater Homeowners Get Lift From Rising Prices: A big jump in home values has pulled 2.3 million owners above water on their mortgages in the past year, according to Zillow. 12.2 million owners with mortgages remained underwater, down from 15.3 million a year ago. Tom: I estimate it will take about a year to lift the remaining underwater SW Florida homeowners into the black, and two to three years to lift the rest of U.S. homeowners into positive equity.
Length of Homeownership Increases: The current length of homeownership is 11 years, up from 6 years in 2007. Tom: the historical average is 7 years of ownership, but that figure rose significantly due to so many homeowners being underwater the last several years, and unable to sell their homes. As real estate prices and the economy improve, I expect the average home ownership will revert to the normal 6 to 7 year time frame.
Real Estate Recovery Period: The U.S. is 17 months into the real estate recovery, with prices rising 21% from the bottom of the market - March 2012. Forida is 21 months into the recovery, and Cape Coral/Ft Myers has had 33 straight months of same month-over-month price increases - with an astounding 80% increase in prices.
Home Sales: Existing U.S. home sales has reached an 5.5 annual million pace, the highest in more than six years. Inventory: 2.49 million homes are for sale across the U.S. - a 20% decline in inventory from a year ago. Tom: an increase in home sales combined with a decrease in inventory. Hmmmm, I wonder what that will translate to regarding home prices in the future?
Burnt Store Road Widening: A recent court ruling concerning a dispute on how much Lee County would be required to pay for additional land will likely mean that Burnt Store Road will only be widened to 4 lanes, versus the 6 lanes the County had originally planned. Tom: The change from 6 lanes to 4 lanes will have both negative and positive effects for residents and the city as whole, so I view it as a wash.
Client: "I've been following your market for the past three or four years, as we are planning to retire in Cape Coral next year. My wife is extremely worried about the dreaded hurricanes that hit Florida so often. Yet, I've not read about one hurricane hitting the state for several years. Is this lack of hurricane activity unusual"?
Tom: The fact that we haven't had a hurricane hit Florida, or even come close to the state since 2005 is not unusual. Nor is the fact that every year meteorologists will issue dire predictions of extreme hurricane activity for the upcoming hurricane season, which runs from June 1 to November 30. There has not been a hurricane even remotely on the radar again this year.
On average, SW Florida will be hit by a hurricane every 20 to 30 years. More lives are lost and more property destroyed every year by tornadoes in the mid-west, and by snow storms up north, than by hurricanes in Florida. However, it seems that because hurricanes are not a yearly event as other storms are, the media enjoys the hype about hurricanes - whether they actually occur or not.
The other big misconception about Florida is the danger from alligators. There is a much bigger risk of getting killed by dogs, bears, the flu, etc. (you get the picture). On average, one person is killed by an alligator every 3 years in the entire state of Florida (22 fatal attacks in 65 years), usually as a result of humans illegally feeding them. Thus far in 2013, 13 Americans have been killed by dogs.
Client: What is the optimum time to list my home for sale in SW Florida
Tom: This one is easy, and a questioned I've answered often for clients over the years, especially out-of-state clients. From mid to late January is the best time to list a home for sale here. Our season slowly starts to pick up in mid October, at which time many of the better deals are taken off the market by savvy real estate buyers. In January we hit "high season", with lots of snowbirds and other real estate buyers descending on our "Little Slice of Paradise". Prices can rise 2 to 3% a month in our busiest real estate months
Hurricane Season Has Been A Dud Again
What Do Luxury Buyers Want In A Home?
Florida Foreclosure Starts Down 54% Year to Year
Sue, Kim and I are extremely pleased to announce that after an arduous search for a top notch assistant, Ivis (Evie) Armendariz has joined our real estate group. Evie will be helping us with a wide assortment of responsibilities, including feedback from agents that show our listings, transaction coordination, checking in on a regular basis to make sure our home listings are always shown in their best condition, and assisting us during Open Houses.
Ivis is pleasant, knowledgeable and very reliable, and is a tremendous addition to our real estate family. She will lighten our weekly administrative workload so we can concentrate on the crucial tasks of selling and listing homes for our clients.
Topics: Cape Coral's Housing Recovery 2nd Strongest in U.S. - Will Current Appreciation Continue? - When will we see the Next Real Estate Peak?
Topics: Cape Coral/Ft Myers 3rd Fastest Rising Market in the U.S. - $5.3 Million Dollar Home Sells in Cape Harbour - Cape Median Home Prices Break $251,000 Mark
Topics: Summer Weather Heats Up - Real Estate Sales Remain Hot-Number of distressed sales has been greatly reduced - Only 11 Weeks of Inventory left l
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