UPDATE May 6, 2008:

Read the Wall Street Journal’s View of the national market “Housing Crisis Over” from May 6, 2008 Editorial Pages.

“The dire headlines coming fast and furious in the financial and popular press suggest that the housing crisis is intensifying. Yet it is very likely that April 2008 will mark the bottom of the U.S. housing market. Yes, the housing market is bottoming right now.

How can this be? For starters, a bottom does not mean that prices are about to return to the heady days of 2005. That probably won’t happen for another 15 years. It just means that the trend is no longer getting worse, which is the critical factor.

Most people forget that the current housing bust is nearly three years old. Home sales peaked in July 2005. New home sales are down a staggering 63% from peak levels of 1.4 million. Housing starts have fallen more than 50% and, adjusted for population growth, are back to the trough levels of 1982.” [Read more...]

Fort Myers, FL April 8, 2008

The REALTOR® Association of Greater Fort Myers and the Beach, Inc. reports that a total of 437 existing single family houses were sold in March 2008. The percent of sold to active listings has nearly doubled in the past 12 weeks.
In addition, 1096 single family homes are pending, reflecting a 45.3% upswing since the end of 2007.
While there has been more activity in the market, the median sales price was $205,000, up $15,000 from last month but 18% off what it was a year ago at $250,000.
“We’re cautious and optimistic about the recent activity in the market as the current absorption rate (supply in months) for residential properties is less than half of what it was at the end of December – 11 months vs. 23 months, and the lowest it’s been in over a year”, said President Ron Carpenter. “This means that buyers are realistic that good values and good properties are on the market and are buying while the interest rates are low. “

And we are fairly confident April numbers will be even stronger. The small indicators that don’t get reported are adding up: home inspectors are swamped, title agency offices are busy and open late on Friday nights…

ORLANDO, Fla. – May 31, 2007 – A top Florida economist has declared the housing slump a done deal. “It will take another 18 months or so before closing volumes reach more normal levels, but the worst is behind us,” says Hank Fishkind.

Fishkind says the turn-around is important to everyone, attributing housing troubles to the recent 75 percent drop in GDP (gross domestic product). The current 1.3 percent rate is down from the historic 4 percent pace, but Fishkind says that dropoff would go away completely when housing simply returns to normal levels.

“With (the number of home) starts below (the number of) closings, the inventory of new but unsold homes is slowly being absorbed,” says Fishkind. “Sales of existing homes are the best leading indicator for national housing markets. April sales were off sharply, falling below 6 million at an annual rate. At these levels it will take 8.4 months to sell all the homes that are for sale. However, prices remain stable. And the sales levels, while down this month, were up sharply earlier in the year.

“What all of this means, is that we have seen the worst for housing markets,” Fishkind says.

Related Posts: Are We There Yet?, Looking for Great Lot Prices?

For the last 18 months, our local newspaper had only doom and gloom reporting when it came to our local real estate market.

Our editorial cartoonist, Doug McGregor (a.k.a. Mr. Negative) has been on the same bandwagon week after week after week.

So you could have knocked my off my chair this morning when I flipped to the editorial page to see a cartoon that is… gasp… positive! See also Lee County Belies National Trend.

When looking for the right agent to sell your property, one very important aspect of gauging his or her market knowledge and expertise can be found in how the agent approaches the Comparable Market Analysis (CMA) for your property.

Simply put, the CMA is intended to be an apples to apples comparison. CMAs prepared for sellers typically provide details on three or more nearby, similar properties. The CMA data is crucial, in fact the number one component, for determining the market value of your property.

Here are things to look for in the properties that the agent chooses as the comparables for your property. And don’t be shy about asking the agent for details on each. A top-notch seller’s agent will have conducted in-depth research in selecting the comparables to present in the CMA.

First some basic CMA terminology (click here for basic CMA and Listing terminology).

• Subject Property: The property you are evaluating, either as the seller or the buyer.
• Comparable Property: The properties that are being used as the best-fit comparisons to the subject property.
• Property Status: If the property is still on the market, has a contract, or is sold.

Basic Features Similar or Identical

• When the property was built should be about the same time as yours (built between 1999 and 2003 for example) 
• Overall square footage should be the same or very close to your property; be sure to check the under air square footage and total square footage
• The construction type should match yours (for example, concrete block with stucco)
• The roofing is similar in type and age (concrete tile about 5 years old, for example)
• Space utilization overall should similar to yours: the number of bedrooms and bathrooms, garage spaces, floor plan design (split bedroom, great room), number of stories, unit floor (condos), a family room (or not), formal dining (or not), lanai/patio…
• For waterfront properties, it’s also important to assure features such as seawall, boat dock, and boat lift are similar in quality, age, and size.

Overall Condition of the Property

Ask about the how well maintained the comparable properties are. If yours is meticulously maintained, a comparable that “needs TLC’ or that has roof damage is not a valid comparison.

Also important are any upgrades your property, or the comparables, have undergone. If your kitchen is the original and is 15 years old, but a comparable property has an upgraded kitchen with granite countertips and new appliances, an adjustment needs to be made or a different comparable used.

Location, Lot, and View

• Lot size and type: in SouthWest Florida, the majority of lots are a quarter of an acre (.250). Corner lots, oversize lots, “triple lots,” and cul-de-sac lots typically command higher prices.
• The comparable properties are in your geographic area, typically within a mile radius or so.
• View and type of view are similar (waterfront, golf course, wooded area, Gulf of Mexico, bay, basin, lake, pond, parking lot, obstructions, etc.).
• If yours is waterfront, pay close attention to the waterfront types of the comparables. Because there are so much variety in the waterfront properties in SouthWest Florida, especially in the canal systems, this is key. For example, a gulf access home that is an hour from the Gulf, even if similar in construction and other factors, is not going to command as much as a gulf access home that is 20 minutes from the Gulf. Likewise, a freshwater lot with a lake view is more prized than one on a standard freshwater canal. Intersecting canal views are valued higher, as are properties on wider canals (120-200′). Likewise, check out the details on comparables for the Caloosahatchee River views and Gulf of Mexico beach front views (frontage, direction, obstructions).

Adjustments Are Sometimes Necessary

In some cases, it may not be possible to find nearby properties that carry all of the same features. For example, if the nearby properties are identical in square footage, layout, lot size, age and condition…. but yours has a swimming pool and the others do not, an adjustment can be made to the comparable properties. The adjustment is added (or subtracted) from the comparable. So if the comparable does not have a pool, and yours is brand new, the agent would adjust the comparable value by adding the value of the pool, say $40,000, to bring the comparable up to par with your property (called the subject property).

Sale Status and Dates

The comparable properties should be ones that have recently sold, within the last six months or ideally the last three months. If sold data is not avaiable (no similar properties have sold in the neighborhood), then next best is those that have recently gone pending.

Also pay close attention to the DOM, the number of Days On Market. This is calculated from the original list date to the date of closing (when title transfers to the new owner). This is an important factor: if the property sold quickly, you know it was priced right. If the property was on the market for 180 days or more (perhaps with several price decreases along the way), the pricing strategy that seller used is circumspect and provides evidence it was priced too high. (Other factors may have delayed the sale, but more often than not, DOM is an indicator of price point.)

Related Posts: Terminology, CMA Analysis, Listing Questions, E-savvy Agents

It is not new news that both buyers and sellers need to pay close attention to the Comparable Market Analysis report.

As a buyer, your agent should provide this report to aid the discussion on offer price and terms. As the seller, your agent should provide this report to you to help determine listing price. Again, nothing earth shattering here… most property owners know the role of CMA reports in setting, or getting, the right price.

However, there is sometimes too much reliance on the Asking Price (a.k.a. List Price) on the CMA report. The asking price is just that—what the seller hopes to get for the property. The Asking Price may be the start of the negotiations, with both the buyer and seller expecting to counter-offer each other on price and terms, to arrive at an contract that both parties are satisfied with. Also note the difference between Original List Price (the first price at which the property was offered) and the List Price (the current asking price, after the Original List Price has been either increased or reduced).

With respect to determining a price, whether you are buying or selling, be sure to discuss with your Realtor the “in-progress” or completed transactions on the CMA report: 

• Active Contingent. A contract has been accepted by the seller, but there are buyer contingencies, usually financing.
• Pending. Contingencies have been removed (buyer has performed) and the transaction is expected to close soon.
• Sold: The transaction has closed.

Your agent should put forward an analysis of the Pending and Sold categories, providng factual data that tells you what price buyers are willing to pay for similar properties.

Ask not what similar properties are listed for, but what they are selling for.

Research shows 81% of all buyers start their search on the Internet.

You want to be sure your property is there for those buyers. Today’s real estate agents must embrace the World Wide Web to reach target buyers locally, regionally, nationally, and internationally. And, today’s Realtors® must have email finesse, not only for marketing the property but also for day-to-day correspondence and follow-through with buyers and sellers.

The SageRealtor team’s online marketing strategy spans North America and Europe. We are found in major search engines, real estate web sites, and regional newspapers across the country.

In addition we send 50,000 email newsletters each month to Realtors, investors, and end-user buyers. Our email newsletters are not the generic “canned” newsletters that are so common today. SageRealtor News updates provide market trends and perspectives that are relevant and current… information our readership values as unique and insightful. And of course, our newsletters get the word out on our sellers’ properties.

These are just some examples of what SageRealtor does to leverage the Internet to market our clients’ properties. Be sure to ask any agents you interview about their marketing strategies and their presence on the web.

Your property will not sell if few people know it’s available for purchase. That’s why marketing and advertising is so important. While running ads in the local newspaper can be helpful, the agent must also have a plan for pro-actively marketing the property to prospective buyers. Putting a sign on the front yard and running a few ads isn’t enough in today’s market.

Here are some questions to ask before choosing an agent to list your property:

• Which web sites will profile my property?
• Do you have a personal (agent/team/broker) web site?
• How much traffic does your web site receive?
• How will other Realtors® know the property is for sale?
• What will you do to advertise my property?
• Which MLS systems will list my property?
• How do you determine the recommended listing price?
• How do you keep me informed on activity, interest, and showings?
• What is your action plan if we don’t have inquiries or showings right away?