Real estate continues to grow in strength in Southwest Florida as economic factors, combined with renewed interest from buyers, continue to help the market surge forward.
The Bonita Springs - Estero Association of REALTORS® (BEAR) released its latest report for April 2014. The report covers a broad array of real estate statistics that together paint a portrait of the local real estate market and ongoing trends.
Median Sales Price Decreases Monthly
One figure that stands out in the report is the area median sales price. In April 2013, the figure stood at $349,000. As of April of this year, that figure was 6.4 percent lower, at $326,500. This figure is also lower than the $353,500 reported in March 2014, but higher than the $308,500 reported in February.
A bit of monthly variation is expected; median sales prices have gone up and down over the past few months. But overall, the trend is rising and showing signs of prolonged strength. For example, the median sales price for April 2012 was less than $310,000. Before that, it was just barely over $260,000. And going even further back, to 2010, the median sales price in April was slightly over $210,000. This latest figure represents a 55 percent increase over the past four years.
The average sales price did go up on a year-to-year basis, however, rising 2.8 percent to $480,948. This reflects movement in the higher-end segments of the market, and suggests that high-end home sales are performing well.
Area Market Inventory Continues to Decline
Rising home prices across the area are largely being driven by a steady and continued decline in area supply. There are just 480 active listings in the market, down by 57.1 percent from the 1,120 in the market this time last year.
The number of new listings was also down by 41.6 percent, to 125 compared to 214 a year ago. And pending inventory was down by 48.1 percent, to 242 from 466 pending listings.
Currently, the Southwest Florida market in Bonita Springs and Estero has 4.1 months’ worth of inventory, down 52.3 percent from the 8.5 months’ worth of supply in April 2013. Such a low supply level puts the area in a sellers’ market, versus a buyers’ market at this point last year.
New Pending Sales Fall
In another sign of a shift in the market, new pending sales – transactions that have not yet closed – fell by 47.5 percent from April 2013, to 135 pending sales. New pending sales are typically indicative of future closed sales, but not all pending sales will close, for a variety of reasons. What this statistic tells us is that fewer transactions are taking place and can be expected, as supply declines.
Ultimately, the market for buyers is becoming more competitive. The competition is good for the market in that it spurs increases in home values, which has helped many owners become able to list their homes instead of enduring negative equity or waiting until values rise. Homes are also selling for more than they were two years ago; they are now going for 91.4 percent of the original list price, compared to just over 90 percent in 2012 and 87 percent in 2011.
Homes are also taking less time to sell. Overall, the median days on market was 57 days, compared to 99 days in April 2013.
Closed Sales Figures Suggest Activity in Higher Price Points
BEAR also reported statistics for closed sales by market segment. Of the 118 closed sales in April, 72 percent were with homes valued $250,000 or more. Of that group, 38 percent were homes valued $600,000 or more. Thirteen percent were valued at a million dollars or more.
These statistics reveal that homes in the higher end of the spectrum are receiving a lot of attention and are being sold for more money. They are also taking far less time to sell. Homes valued at $250,000 to $299,999, for example, are on the market 50 percent fewer days than they were a year ago. Homes valued at $200,000 to $249,999 were on the market 72.3 percent fewer days. And homes valued at least one million were taking 61 percent fewer days to sell.
Southwest Florida real estate is definitely stronger than it was a year ago. As prices continue to rise, more homeowners can be expected to list their homes and cash in on the rise in home prices they’ve seen, especially if they bought during the recession for below-market prices.
By D. Michael Burke, P.A.
Keller Williams Elite Realty