SW Florida Real Estate – Rising Sales Prices Predicted Until 2017
Posted by Benjamin Dona on Friday, June 6th, 2014 at 3:16pm.
For 29 straight months, overall median sales prices have risen for both single-family homes and condominiums here in Southwest Florida. Local markets like the Naples, Immokalee and Marco Island areas have seen prices rise 13.6% (the highest in the state) over the last year. Others like the Cape Coral and Ft. Myers areas saw prices rise by 8.3% (9th highest in the state) over the same time period. Both compare favorably to the national average which averaged 10.5% year over year.
Overall in Southwest Florida, the driving force behind the ongoing price rises is the "dearth of inventory" that researcher CoreLogic "expects will continue to drive prices up over the year for the foreseeable future.” Price increases in the area usually lose steam as the end of season (April, 31) approaches, but this year they have been propped up by a lack of foreclosure and short-sale inventory, which is being grabbed up by investors and others looking for a deal as soon as they hit the market. Bidding wars have long been common place for the dwindling supply of distressed properties, and lenders are also now raising the prices of new distressed homes they are currently releasing for sale. A similar lack of supply for the entire SW Florida market in general has also helped keep the momentum going even as the 2014 season has come to an end.
"The purchase market will continue to suffer from a lack of inventory which we expect will continue to drive prices up over the year and into next year," said Anand Nallathambi, president and chief executive officer of CoreLogic in their most recent report.
Another real estate research group, the Local Market Monitor, is also predicting all these markets will experience double-digit growth over the rest of the coming year. According to their latest report, prices in Naples, Immokalee and Marco Island markets are expected to rise an additional 11% by the second quarter of 2015, while the Cape Coral and Ft. Myers markets should rise another 12%.
Ingo Winzer, Market Monitor’s president, is so bullish on Southwest Florida because of its strong job growth, particularly in tourism and retail; incomes that rank among the highest in Florida; and continued interest from investors. "Combining speculative interest, retiree growth, and second home buyers with good fundamental economic demand and you have a lot of people who want to buy property," he said Wednesday. And, according to Winzer, even with the given rising demand and the healthy local economy, "prices are still currently 20% lower than they ought to be at this point in time."
Both research groups feel that by the second quarter of 2017, cumulative price increases for the last three years will have reached 29% in Naples Immokalee and Marco Island market and 31% in Cape Coral and Ft. Myers.
We highly concur with both research groups conclusions. Most of the time right now, re-sale properties are flying off the market if they are priced right. Days on Market (DOM) are under 60 for both single family homes and condominiums statewide and are even less in most all of the local Southwest Florida markets. Our last three new listings that came on the market right towards the end of season all sold in less than a week of hitting the MLS.
And, for those buyers who just can't find something to their liking in the limited inventory re-sale market, there is a wealth of new construction that is available, most of which is being priced extremely well by the builders.
The bottom line is that it is still a good time to buy in Southwest Florida even with the recent rise in prices. By purchasing now, buyers can also anticipate a pretty nice return on their investment over their first few years of ownership. That's not a too shabby in our opinion.
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