We could spend a lot of time going over all of the big events of 2011. It was, after all, a year of major current events, however, our main focus is the economy, specifically relating to how the economy has affected the Southwest Florida real estate market. I will be the first to admit that I was WRONG about the market in 2011. I thought we would continue the trend towards stabilization in the market and have minor appreciation of values. Well, I was accurate about the stabilization part, but appreciation overall has been higher than I would have expected. Here are the numbers.
In a superb article from Fort Myers Florida Weekly (seen below), the numbers speak for themselves. Since January 2011, the median sales price of homes in the Greater Fort Myers area have risen 28.27%. The overall number of transactions has inched down by 5.5% when compared to this time in 2010. They go on to explain the increase in median sales price to be a product of an increased number of traditional (non-distressed) sales. The number of traditional sales has increased from 33.5% in January 2011 to 52.2%. Certainly this is an indication that sellers are FINALLY seeing a better opportunity to sell…and for good reason. Even more interesting is the fact that the overall amount of inventory is down 30% from just a year ago. We only have 3 months worth of inventory at current demand level. Very impressive.
Collier County has seen its share of good news in the marketplace as well, but not nearly to the extend of Lee. The graph below shows you the average sales price of single family homes in Collier County. The trend line has remained somewhat flat for the year, but I would expect that December & January numbers would help increase it. Obviously the average price is much higher than Lee overall, but that is to be expected.
2012 Prediction: While I certainly do not have the super powers of predicting the future (my crystal ball speech), I believe 2012 will be another positive year for real estate in Southwest Florida. We are not through the woods yet when it comes to foreclosures & short sales, as I think it will be several years before we see that pipeline dry up. However, we will see less short sales & foreclosures coming on the market which inevitably means continued appreciation. Demand will remain high even though prices are heading northward. Consumer confidence is likely to keep rising, especially with the upcoming elections. Mortgage rates are at record lows now, but it will remain difficult to obtain financing. We have been seeing the majority of our clients purchasing with cash, and I would expect that to remain the same.
Conclusion: We are still in a buyers market, but the tide is slowly changing in favor of sellers. There is still time to buy at great prices. If you’ve been holding off selling hoping the market would bounce back, you may want to have us look at the numbers and give you an analysis…you just might be surprised.
Below is the Florida Weekly article mentioned above.