Many of our customers, friends and even neighbors are always curious about whether or not our real estate market slows down during “out-of-season”. Generally speaking, our answer is, “no”. As Realtors, we’re not quite as busy, because there are simply not as many people on fact-finding excursions and wanting to look at homes/communities. However, the true buyers and sellers are every bit as active now as they would be in-season. Some buyers think that they might even negotiate a better deal given that a seller may not want to incur the carrying expense of their home throughout the summer and fall.
Another question that we often hear from our seller clients is, “Should we sell our home furnished?” Thousands of home buyers opt for fully furnished Southwest Florida homes, even though the previous owner’s taste might not be of their liking. In fact, 23% of all SW Florida real estate transactions included furnishings in 2014 and that number is slightly higher at 25% so far in 2015.
Whether a home commanded a premium for being furnished depended on its price and use. Homes targeted to high-end and seasonal buyers drew price premiums if they were furnished. Convenience is the commonality between those two market segments. The higher the price bracket, the more likely the home is being sold furnished. “Buyers of a $5 Mil home are not looking for a project, they are purchasing a lifestyle,” says Brenda Brown of The Brown Realty Group. The price premium for furnished, non-waterfront, single family homes was slight or negligible when you adjust for the cost of the furnishings. Brenda said, “Some buyers have trouble visualizing how furniture fits into a room; therefore, a furnished home is much easier to sell.”
Why does the absorption rate matter? You may be asking, “What exactly is absorption rate?” The absorption rate is a method to determine how fast homes are selling in a given area and weighs supply and demand of current housing inventory on the market. “A declining figure indicates the inventory is decreasing as more homes are being sold than are coming on to the market. A rising figure implies that there are more homes coming on to the market than there are buyers willing to buy at the market prices,” said Rick Brown of The Brown Realty Group. For example, if 12 homes sold in the last 12 months, this indicates that the market will absorb one house per month on average. If there are 10 homes currently on the market, there is a 10 month supply and so on.
A six month supply is considered a balanced market. Less than a six month supply is considered a seller’s market and more than a 6 month supply is considered a buyer’s market. The Brown Realty Group can provide you with the absorption rate by area, such as Naples, Bonita Springs and Estero, but more importantly, we can provide you with the absorption rates and pending sales ratios for your particular neighborhood or community.
Overall activity in the Naples area real estate market across all price categories remains steady, according to the First Quarter 2015 Market Report released by the Naples Area Board of Realtors. Most notable in the report was the $300,000-$500,000 price category for condominiums in which the overall closed and pending sales increased by double-digits in the first quarter of 2015. Statistics show a recent shift in buyer focus from single family homes to condominiums. The Brown Realty Group agrees that a new trend may be emerging. Based on the market report showing condos out-performing single family home sales, we predict that condos will see a continued rise in sales moving in to the summer.
According to Brenda Brown, “Pending sales for condos in the $300k to $500k price category increased 53% over this same time last year. Compared to a 26% increase in single family homes in the same price category.”
We continue to see a red-hot real estate market in the Fort Myers/Estero/Bonita Springs/Naples area. The Brown Realty Group currently has 3 homes pending and we have just listed several new properties for sale over the past few weeks. Our broker, Downing-Frye Realty, Inc has had closed sale volume of $13Mil per business day in April. By the end of this month, Downing-Frye will have had $700 Mil in closed sales volume for the first four months of the year. If you want to consult with the “Professional’s Professional”, call Rick or Brenda Brown at The Brown Realty Group.