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When is the BEST Time to Buy in Southwest Florida?

Written by Posted On Friday, 08 November 2013 11:30

We get this question all the time - "When is the Best Time to Buy in Southwest Florida?" After struggling with this question for many years, we took a look at the statistics available to us to see just how much we could "glean" to answer that question. After looking at the year to date information regarding months of inventory, what is our lowest sale price for each month, what is the trend in sales prices, how many homes sold and their median price, how many new listings come on the market each month, and how many days on market (DOM) did property average until selling, we've found that the market is so rapidly moving we may not be able to rely upon the past "rules of thumb."

Each one of the graphs and explanations below will give you a picture of the activity during certain months and you can make some legitimate decisions about timing a purchase; but, unfortunately, that won't present a clear picture to you for pulling the trigger.

Real estate is always local – everyone has heard the phrase, "Location, Location, Location" many times in their adult life. Sometimes sayings are true because they actually have meaning. For real estate purchases, desire to live in a certain location will typically win over every buyer eventually. Then you'll want to look at that locale and see how many homes that fit your criteria are actually available for sale, followed by how quickly do they sell.

Here is an example for all properties from November of 2012 through October, 2013, in Bella Terra. Bella Terra is in an excellent location, enjoys easy access to Ft. Myers, Bonita Springs, Naples, the airport, and five star beaches, shopping and dining. The community is a mixture of single family homes, attached villas, townhomes, and two story condominiums. The fees are reasonable for the services and amenities and Bella Terra attracts a large demographic of young professionals, families, second home owners, and retirees because of their pricing which ranges from as little $100,000 for condominiums (although rising rapidly) and over $500,000 for their largest single family homes.

Here's what we discovered:

The chart below shows how many active "New" listings per month were in Bella Terra, all property categories, from November 1, 2012, until October 30, 2013. There were 247 new listings within the community for the past 12 months. February had the highest amount of listings with 27 and December of 2012 had 13 which was the lowest amount. October of 2013 had 18 new listings - helpful to know, but doesn't help us much, except to say that less property came on the market for sale in October than in February but more than in December nearly a year ago.  So, we can look at the graph and "assume" that the most property would be available in February of this year - however, that does not tell us if it's property we want to buy. Therefore, in our opinion, this statistic doesn't apply to making a valid decision.

YTD 12 Months Active Listings in Bella Terra

The next chart tells us how many months of inventory are available on a month to month basis. That means at the current rate that property is selling in our area, how many months will it take for all the property to sell.

12 Months of Inventory History in Bella Terra

The interpretation of the chart above shows that June of 2013 had the lowest months of inventory - that was one month. And, this month, October of 2013 had four months - the most since January of 2013. That should indicate that we have the "most" selection of available homes this month. Again, it doesn't tell us if it's a home we would want to buy, just that there are enough homes on the market to take four months to sell them all. You might think that indicates that sellers are getting nervous and concerned about how long it is taking to sell their home. More likely, based on further data we will provide, this means that we have enough homes on the market for a more varied selection, but it also means we just have more homes on the market right now than in June. In fact, that is true, in June there were four active listings for sale - one townhome and three single family homes. And, this month there are two condos, two townhomes and ten single family homes for sale. So, we do have more selection in the single family home category than any other at this moment.

138 homes sold this year of all types of property in Bella Terra. The next graph tells us how long it took those properties to sell per month. In May of 2013, it took 97 days to sell a property (of any kind) and in October of this year it took 24 days. This is a number we feel is very important. It shows that property, especially property that is priced properly, should be expected to sell very quickly - that means Buyers need to be informed and prepared to go forward if they wish to actually purchase. It also means that the market is moving quickly for sellers which will typically indicate prices are going up - we'll deal with that feature next.

12 Months History of How Long to Sell in Bella Terra

The median sales price is the amount that a property sells at where 50% of the homes sell above it and 50% sell below that. All property in Bella Terra sold at its highest median price in July of 2013 - the lowest was in November of 2012. July's price was $275,000 and November's price was $157,250. Remember this is for all property types and the median range. This number doesn't help us much except to show a general rise in prices. In order for it to make more sense, we broke it out as follows:

  • In the last 90 days, 37 single family homes sold with a median low price of $250,000 and a median high price of $285,900 (highest was over $382K). Seven condominiums sold with a median price of $127,000, two townhomes sold with a median price of $215,500, and four villas sold with a median price of $177,625.
  • 13 single family homes averaged 134 days to sell in August and there were 13 homes that closed with a median price of $250,000.
  • September 2013 had ten single family homes closed with an average days to sell of 56 (significant drop in time) and a price increase for the median value to only $253,854.
  • October 2013 had two homes sell with a median price of $285,000 and days to sell at 38! This is a huge increase in median price and a significant shortened time to sell.
  • Villas increased in sales price from March of 2013 at $165,000 to October at $195,500, another huge increase in price.
  • Prices are increasing - Time to sell is shortening as of this date.

90 Day Median Sales Price Increase in Bella Terra Homes

All in all, we've determined that the "Only" indicators for purchasing are demand vs. inventory, sales price increase, and how long it takes for a property to go from list to sale (although list to pending date is more indicative of time is of the essence).

The data bears out our long experience in the local real estate market, Southwest Florida real estate is selling very fast, prices are rising, and it is a sellers' - builders' market. Our builders very rarely will negotiate on price and options now - they know that the demand is high and there is little inventory for selection. Many of our sellers are receiving multiple offers and final price in some cases may be above the list price. However, keep in mind, sellers still need to price their property appropriately for keeping those days on market and selling prices in line with what we currently see. The bubble isn't yet back; but, certainly the trend is upward in price.


Benjamin Dona is the Broker and Owner of Gulf Coast Associates, Realtors in Bonita Springs, Florida. He holds two advanced degrees, an MBA and an MA, and has an extensive background in both business and marketing. In 1998, he founded Gulf Coast Associates, and formed a group of like-minded Realtor® associates dedicated to offering professional real estate services by concentrating on information, education and the use of leading edge technologies. He also is a recognized expert on the "Net," a much-quoted and read blog author, and a contributor to both national and international news outlets. Benjamin is a member of the National Association of Realtors, the Florida Association of Realtors, and numerous local real estate boards throughout Southwest Florida.

Contact Benjamin Dona at 239-948-3955
SouthwestFloridaRealEstateBlog.com

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