The State of the Market

Recently, the Market Watch in Ft. Myers and other forums have presented statistics that may suggest a sluggish market ahead, or even a market pause/correction. Talking with a variety of agents in different areas of Southwest Florida daily – many are already feeling it.

From the numbers I see, I would agree. Just watching the MLS, alone, presents us with some facts – more than 3,500 price decreases just since 3/1/16. Combine that with about 150% more properties coming on the market than are closing in a given period, and we might say the caution light is on. Did we know this was coming? YES! If you took BootCAMP with me anytime in the last year, we talked about this extensively.

Anyone that attended the economic development meetings of 2015 could see that the number of permits being pulled for new construction multi-family homes in Lee County (currently 2,850… second only to 2006 when we reached 4,076) is astronomically higher than 2014 when only 854 were pulled, and 2013 when 388 were pulled. 24,000 New Homes slated to come on-line in Lee County between February 2015 and the future 30 months and a whopping 81 communities building now in Collier County is enough to make anyone who lived the real estate market torment of 2008 & 2009 to get a slight chill.

When we consider that the short-sale/foreclosure homes have now been rehabbed and are going back out there for sale like newly polished pennies… the buyer has more options anytime in the last 3 years. We’re back to 7 month’s worth of inventory on the absorption rate chart, and climbing. In the $1million+ price point, there’s more than 20 months of inventory on Ft. Myers beach alone today.

We’re due for a slight correction. Is it panic time? Never. Is it education time? Always. It’s our job to share the statistics with our sellers and make sure they understand that there’s really no such thing as a “seller’s market” across all price ranges, and the market is in constant motion. You never know when the right time is to have sold your home, until it’s passed you by.

If it were me, and I had a home to sell today… I’d price 2-3% below market to get it sold today. Not sure I would want to live this summer and an unknown election response under the current statistical conditions, with a home that could possibly correct in price at the end of summer, 10% or more.

  1. ALWAYS bring the market with you – in writing – to your conversation. Don’t give opinions if possible (adults don’t like to be told what to do). Instead, share the numbers you see then simply ask – based on what you’re seeing, as a business decision, what do you think we should do to get your desired result?
  2. REVIEW more than one source of information. So many of my customers will say, “well we hear the market’s going to increase by X!” I simply ask… Great – just curious what’s telling you that? “the Newspaper.” Hmmm… ok. Has there ever been a time when the news was behind the curve or perhaps even wrong? <<yes>>   This time could be like that time. Let’s look directly at the numbers, they always tell the truth. You want the truth, right? <<of course>>
  3. Do NOT email people information that disputes their opinion. Have face-to-face conversations wherever money is concerned. Second would be a phone appointment with all parties present. Tools like Skype, Go to Meeting, etc. can help if you want them to look at facts along with you.
  4. Connect history to today. History repeats itself. One of the best things you can do with sellers is explain that you’re having a similar conversation with them today, that you had with sellers back in 2007. We’re not saying the market will take a dive like it did then – however, we are saying you may not wish to gamble over the next 12 months. (Be sure to caveat everything with “no one has a crystal ball – yet all indicators are that…”) Pricing your home to sell now, getting to your MOTIVATION, could keep you from accepting less than you want to later. If you had a stock, and you saw these numbers… knowing the stock could likely take a downward correction, what would you do? <<sell today>> Absolutely. Let’s make that good business decision, with the facts we have today.

Buyer and Sellers will want to do business with you if you tell them the truth and keep them educated. Create long-term relationships, not by telling customers what they want to hear, but what they need to hear to make good, informed decisions.