U.S. home prices were up 1.3% in August from July, but the peak rate of gain in residential real estate prices occurred in April of this year. Data through August show that prices were up 12.8% year-over-year, according to the Standard & Poor’s Case-Shiller 20-city index. Both the 10 and 20 city indices showed their highest annual increases since February 2006, and all 20 cities reported positive year-over-year returns.
What this means is that home prices continued to rise, but at a slower pace each month since April of this year. All 20 cities in the Case-Schiller index posted gains in August, but most showed deceleration compared with July. Tight inventory conditions likely drove the strong year-over-year home price growth in many of the cities that the Case-Shiller index follows. “Although more homes are for sale, the inventory hasn’t expanded enough to bring home price gains back down to near normal levels,” says Trulia economist, Jed Kolko. “The for-sale inventory still looks about 15% below normal levels when adjusted for seasonal factors,” Kolko says.
In the Fort Myers area, when comparing year-over-year for September, closed sales were up 15%; new pending sales up 15%; new listings up 7.5%; inventory down 5.7% and average sale price up 6.2%, according to Florida Realtor’s Association.
In the Naples area, when comparing year-over-year for September, closed sales were up 29.7%; new pending sales up 46.3%; new listings up 7.9%; inventory down 21% and average sale price up 39.7%.
We hope our readers find this information as interesting as we do. Are you concerned, like we are, that with a 39% average sale price increase in Naples that a new bubble may be forming? If you are a potential seller, but you’re sitting on the fence because it’s not yet “prime time,” it’s time to get off the fence and list your home with a competent Realtor. As sellers come back into the market, inventories will rise and if interest rates rise, we see a slowing of price escalation. Similarly, if you were a prospective buyer in September of 2012, but have not yet purchased, the delay may have cost you as much as a 39% increase in your dream Naples home. And, although most of us agree that these price increases will not continue, The Brown Realty Group believes that we will continue to see sale price increases, albeit more modest. NOW is the time to buy.
Our Downing-Frye Realty office has 262 pending sales contracts for the month of October, which puts us on track for the best month since 2005! The Brown Realty Group continues to be a leader in closed sales and pending sales. As of the writing of this newsletter, we have 3 pending sales contracts and we have closed over $10,000,000 in real estate sales year to date, through the end of October.
If you have interest in knowing the value of your home or if you or your friends have interest in shopping for a home in SW Florida, Rick and Brenda Brown and The Brown Realty Group would be honored to assist you.