Homes going up or Down in Price? (Cape Coral, Fort Myers: for sale, real estate market)

[Twobeach]

Seriously,,are the home prices staying put? Going up? Down? Is the Economy improving?

[Jkgourmet]

Does anybody have their crystal ball warmed up yet this morning?

Seriously, this question is entirely unanswerable. For too subjective and influenced by personal experiences, dreams, hopes, desires, profession, age, financial stability, job stability, what neighborhood, city, state, region of the country. which news program you watch, which financial guru you believe, the radio talk show that you listen to, etc

The simple reality is no one knows - which is, of course, one of the reasons that the real estate market will take so long to recover IF it ever does.

[rikoshaprl]

Since this is the Cape Coral forum I think we can at least narrow the question down to this area. My opinion is that in general prices are flat.

[equalrightsforeveryone]

Going DOWN

[nhkev]

If we depended on crystal balls for all decisions in our lives we wouldn't need brains. But since we have brains we may as well use them. If people say they are going down I would really like them to say why they feel this, otherwise it's just a guess. It's why in math class the teacher always wanted to see your work instead of just the answer, even if your answer was right it didn't always mean you understood the principles behind it.

So to answer your question regarding home prices... yes they are going up, yes they are going down, yes they are flat. I will teach you how to figure out for yourself.

Number 1 the inventory level is the "supply" in the supply vs demand.
In cape coral for the last year or so it has been in a tight range (around 2500 single family homes for sale.)

Number 2 the sales are the "demand" Which in Cape Coral has avg about 500 month. So if you divide 2500 inventory by 500 sales it gives you the absorbtion rate of 5 months. when it gets closer to 3 months supply it is a sellers market when above 6 months it becomes a buyers market. We have witnessed some things that can negatively effect demand such as the oil spill.

there can be things that will effect the supply or the demand. For example an increase in foreclosures would add homes to the market, higher unemployment could add homes to the market.
Things like lower interest rates, easier lending criteria, gov't homebuying programs can help spur demand. Sometimes rising interest rates can get some people off the fence thinking I'd better act now.

Because the inventory levels really haven't changed that means there is an equal amount of supply vs demand so prices really shouldn't go up or down overall....but if you look at the market at different price points you will get totally different markets. For example Investors are not interested in homes that do not have positive cash flow. It is a lot harder to pay cash for a $400k home than an $85k home. The overall costs taxes, insurance, electric are much more expensive than the $85k home which means most 2nd homeowners aren't interested in the high end homes either. So their is a lot of demand for homes under $150k (last I checked there was only about a 2 month supply in this category). likely these homes will appreciate and value which is supported by a rise in the median home Is up about 7.5% from it's low in april of 2009. So I would predict these homes to continue to rise.

There is still some demand in the $150k to $300k because you do have some retirees that do want primary homes (at least 6 months of the year) . Gulf access properties are selling on avg around $315k. last year there was on the surface slight depreciation by price but yet the avg sq ft was smaller which leads me to believe the nicer , larger, newer ones went first and then people get the next best thing. This was the same cycle that happened on the lower end properties. So the next part in the cycle is for these to start to appreciate. Higher end off water homes $200-$400 k and high end water front (over $400k are still likely to move down in price due to little demand, so to spark this demand they have to drop their price.

Land - there is a demand for gulf access properties and there is limited inventory (about 650 gulf access lots). So I expect some to be flat, some to increase depending on location. Non waterfront land IS WORTHLESS. There is so much of it (about 5000 lots) and little demand. Most availble is in the north sections which don't have utilities. They are expected to get them sometime at a cost of roughly $20k each. this means that if you bought 4 lots at $5k a piece then $80k for utilities you'd be paying $100k per acre and with the amount of land availble you would expect to pay about $20k per acre so technically the land is over valued by a negative number. So even if the land was free it may not be a good deal.

The only way to tell for sure is to pick a certain style of house that you like in an area you like and track sales that are like that style of house and you will see clearly if prices are going up or down.

[coastal chic]

Great post, nhkev! I completely agree.

[hiknapster]

This is the Fort Myers - Cape Coral forum, which also includes Estero and Lehigh Acres. As such, it runs the gamut.

[Jkgourmet]

Nhkev: my compliments. I can honestly say that you should be writing for the WSJ or be a commentator on bloomberg or FBN.

If you have a blog someplace, please PM me with the URL. If you don't, you should. I'd follow it in a heartbeat.

Thank you for a great "mini-seminar"

[hiknapster]

I'm going to be his editor!

[SWFL_Native]

Originally Posted by rikoshaprl

Since this is the Cape Coral forum I think we can at least narrow the question down to this area. My opinion is that in general prices are flat.

Since when did this become the Cape forum? Says FTM-CC so I woud assume this is the greater MSA so would include Lee County (Unincorporated, Lehigh, Sanibel, Captiva, CC, FTM, North FTM, Estero, Bonita, San Carlos... )