SouthWest Florida Real Estate Services
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SageRealtor Newsletter - It's a Buyer's Market
April, 2006
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Changing Times
Wellll… things sure have changed since one year ago! A year ago, no one wanted to sell, but buyers were flocking to the area and out-bidding each other. Now we have plenty of people selling, and fewer buyers. That's good news for buyers. There are definitely some good deals out there!

Last year, investors overbought. Now they are dumping inventory on the market. How long the deals will be out there is anybody's guess. The consensus amongst many realtor/mortgage broker associates is that we are nearing the bottom of the softening and those with "wait and see until next year" attitudes might be kicking themselves this time next year. Time, of course, will tell.

Are Sellers Stubborn?
Some seller's are clinging to the notion that, as in prior years, their property should be 45%+ above its value last year. Even more remarkable is that they are peeking out their doors expecting to see all those buyers from prior years here in droves "any minute now."

Fortunately, more and more sellers are getting the message that there is, in fact, competition out there. Price decreases are showing up in the MLS (last year at this time, we saw only price increases). This does NOT mean that values are decreasing; it means price appreciation is less than many sellers expected. Consequently, we're excited about some of the great deals out there right now. If you want to buy in 2006 but at 2005 price ranges, now is the time.

Are Buyers Timid?
Our MLS is chock-full of listings with uppercase and exclamation points… MAKE OFFER!!! SELLER MOTIVATED!!! So we wonder two things. One, if the seller is motivated, why not put the price where it should be (see above). And two, why aren't buyers testing the waters and getting aggressive with offers? This makes for a bit of a schizophrenic sales climate. Sellers REALLY REALLY want to sell. Buyers aren't confident that they really can MAKE AN OFFER. This apprehension is a hold-over from prior years during which buyers were getting out-bid by other buyers. Today's buyers don't believe sellers will accept a number below asking. They do.

Another advantage for buyers: if an offer does not fly, move on to the next one. The inventory is high. In prior years there were few similar properties available and so if you didn't get the deal, you might not get any deal. That is no longer the case. Make a list of top picks, and work the list.

Numbers Don't Lie
Real estate is by nature a speculative market. But all speculation is rooted in documented events. The CMAs (comparable market analyses) tell the story. We use CMAs faithfully, both when helping sellers set prices and when helping buyers determine offer prices and terms. For instance, an analysis of 50 Direct Access lots listed at $350K-$900K and that sold in the last 3 months shows that they, on average, sold at 95% of list price. In many cases, that was after a price decrease. (Again, it's important to remember that the prices were set too high; most of the decreases reflect an appreciation expectation adjustment.)

Until Next Time!
Whether for retirement, a vacation home, a vacation/income unit, or a pure investment, it's a good time to take advantage of this buyers market. We are! We are soon to be proud owners of a Rubicon Canal condo that we'll be offering for rental year 'round (more on this in the next issue).