Michael Polly Fort Myers / Cape Coral Real Estate News Blog

It was a hard message to deliver yet was 100% the truth. Sellers have to realize and take to heart that values go up and down. If you want and need to sell you have to accept the value that 'today' not yesterday or tomorrow wiill set. That was the message along with a unified call to all agents to 'fess' up with the sellers and tell them what is selling.

When I was a kid we had an apple tree in our yard. I couldn't wait for them to ripen so we could pick fresh apples. The only problem was that I could only reach the ones that hung out from under the canopy of the tree. Those that were within reach and looked like a value because I didn't have to work extra to get it. When those were all gone I'd work a little harder to get the higher hanging fruit. Our inventory is so great and still growing that the low hanging fruit had not yet been picked. Until this happens and the inventory levels start trending downword that we will start to see the market bottom. Buyers do not wait until the moment, you won't know it is gone until it is over. Deals are out there and it is ok to take advantage of them now.

Sellers, do not hesitate to take your home off the market if you are not serious about selling and willing to accept what the market will bid for your home. The truth is that with our inventory levels in Lee County, we could very well see additonal declines. If it takes 2-3 years to start back up, it could be 3-6 years before sellers see the same price they could get today. Minus the carry costs of those years and unless they are end users living in the home this was a bad decision.

Here is the article from the News-Press with comments from last night's MarketWatch presentation.

Latest News -- 5:33 P.m. Market Watch experts: Housing soft for 2007 By Dick Hogan Originally posted on February 20, 2007 Construction of new homes could come to a screeching halt later this year as builders finish up the backlog left over from better times. That's real estate broker Denny Grimes' take on the residential real estate market, which he'll be discussing tonight at The News-Press Market Watch at the Harborside Event Center in downtown Fort Myers. Grimes ticked off the statistics: · Sales of existing single-family homes fell from 12,701 in 2005 to 8,951 in 2006; · The number of existing single-family homes on the market increased from 2,906 in January 2005 to 14,480 in January 2007; · Builders of new homes are up against tough competition: 42 percent of the existing inventory of homes was built in the past three years; Real estate broker Frank D'Alessandro's prediction for commercial property is more upbeat: commercial development will level off this year although rising insurance, property taxes and maintenance costs will push rents up for tenants and land prices will dip or remain flat. Grimes and D‘Alessandro both write columns on real estate for news-press.com and they're the only two presenters at this year's Market Watch. Tonight's event and a repeat luncheon performance Wednesday are both sold out. "Sales are still trending downward" for homes, Grimes said shortly before today's presentation. "The resales are having trouble competing with developers' blue light specials" on houses they built but haven't been able to sell in today's down market. Although the construction industry is still building homes that were ordered in 2005 and 2006, he said, demand for new houses will dry up soon. "They haven't felt the shock wave." D'Alessandro said the commercial market isn't that bad off although "office is clearly over-built, flex space is becoming over-built. That in my opinion is two red flags in the market." Things could get worse if the residential building slows, he said, noting that "over 65 percent of the industrial market is residential builders, suppliers and subcontractors." D'Alessandro gave some statistics supporting his predictions: · With 3 million square feet of commercial space being built in south Lee, there will soon be higher vacancy rates and fewer dollars spent per store; · Road impact fees are rising from $101,260 to in 2006 to $316,740 this year for a 20,000-square-foot retail building; · Insurance premiums are up 200 to 300 percent this year. Grimes urged residential real estate agents representing sellers to persuade their clients to lower prices or take the home off the market. Until that happens, he said, it's hard for the market to make a recovery because buyers don't know where they stand. "They're confused because they don't know what the real price is."   Michael Polly, Vice President, Denny Grimes & Company, ASR, ePro, GRI, USCG Captain

According to the Commerce Department who reported Monday that sales of single-family homes dropped 3.9 percent last month to a seasonally adjusted annual rate of 848,000 units, the slowest pace in nearly seven years.

The decline followed a 15.8 percent plunge in January, the biggest one-month decline in 13 years.

The weakness in sales was accompanied by a drop in prices with the median price of a new home falling to $250,000 in February, down 0.3 percent from a year ago.

We are starting to feel this in our local markets as builders complete what was permited and started during the spring of 2006. It was not until the fall that building permits feel to lows so the conveyor belt of inventory continue to run and dump into an already overflowing market. The great news for buyers is that builders find themselves with homes they thought were already sold and are entertaining offers and creative deals. Make sure you are represented you visit a new home sales center. Remember, the onsite people work for the developer/builder and they will focus on what they get paid for, getting the developers inventory sold.

A buyers agent will be able to compare new homes to resale homes and educate you on the market for both.This can save you time and most importantly your money. The best part is the buyers agency services are free to the buyer.

We over half way through our "season", the time of year when all businesses expect to flourish with a rush of flocking customers escaping the winter weather up north. For Home and Condo sales these are important metrics on how the year will go. So far we are pleased that levels have maintained a steady pace. 

Like the SPAM you get in your email, you wonder why someone sends it, it must work sometimes otherwise they would just get discouraged and quit. We'll these silly questions must be getting serious answers and that appears all that buyers are looking for. I had another call from a referral from TN, he is a doctor there and had heard that our prices had fallen. He wanted something direct access, no bridges for 350K.... What a nice gulf access home was selling for in 2000-2001?

Sam Walton said

We hope to see this level of sales consistently improve. 

There are 5178 homes for sale and of these 51% sit at the original asking price. 49% have been reduced in price by an average of $45,000 or just under 12% from the original listing price. Since many homes are relisted now several times before they sell this may be a bit skewed. Still I think it shows that we still have pockets of problems in our market.

There are many sellers who today are still asking a price that is unrealistic. While driving around in Cape Coral this weekend I pull flyers on several homes. I have found several nice, gulf access, no bridges or restrictions, built within the last year for under $800,000. One flyer I pulled was smaller that these homes and older but was priced at $1.2M. Buyers are willing to buy and ready to price meets closer to value. This home, not on the river, 150' canal is priced at $533 / sqft.

It appears that while gulf access lots are selling much slower and at a lower number, sellers are reluctant to or can not because they purchased at the peak, sell at today's market prices.

Homes under $350,000 represented 72% of the home sales while homes under $250,000 were 40% of the total sales. Half of the homes under $250,000 were built in 2003 or later. - Michael Polly, Denny Grimes and Company.

It seems that as the Lee County real estate market hunts for support some areas are getting closer. Waterfront gulf access homes in particular are looking very attractive. It is important to quantify waterefront homes and know things like idle time to open water, mean low tide depth, canal width, etc. Bridges and other obstacles must be taken into account when trying to find just the right home for you and your boat. While some home prices are still at 2005 levels there are good values to be found on the water.

Michael Polly, Vice President, Denny Grimes and Company, ASR, GRI, ePRO, USCG Captain

The News Press reported yesterday that Bonita Springs based WCI Communities had a rough 4th quarter. They got over 270 orders, but, they got over 260 cancellations or homes back into the system. At a net sales ratio of 10+ it will take a while for them to get rid of the inventory they have. Remember earlier posts about how building permits are only now at they lowest levels, homes already in the pipe line are still coming out of the ground and homes that are contracted for and cancelled are now being added back in. This is on top of the almost 15,000 homes in the resale market.

Other builders are facing the same problems. I think this will lead to even deeper discounts and incentives from the builders. Great news for buyers, bad for sellers. Some builders who are not as deeply entrenched as WCI, Centex and others may fair better. Ryland and DR Horton come to the market later and may not have as much build up of inventory as ones that have been in the market longer.

Michael Polly, Vice President, Denny Grimes and Company serving Fort Myers, Cape Coral and Lee County