As the price of existing resale homes goes up, buyers will be purchasing more new homes from developers in their communities. The areas where buyers can purchase new homes have done very well. There are now many new large and smaller housing developments competing with re-sale properties.
This is my analysis derived from viewing the financial trends charts and data in the SunshineMLS. I am looking a the end of the period from June 30, 2012 to July 1, 2013. The holiday season from December to the first of January shows a downturn on the charts, because of the decline in sales at that time of year. There is a peak on most of the charts between April and May 2013 indicating that there must have been a large number of cash sales at the end of March 2013 with quick cash closings which would have accounted for the increase of what appear in many of the property types and price ranges to between 20% to 40% more cash closings in those months on top of the numbers I have included below.
More than 50% of the multi-family sales were cash.
Residential sales in general show about 40%to 45% more homes selling for cash than sold with financing
Condominium sales in general show about 60% more condos selling for cash than financing.
Residential sales trends:
Single family homes under 100,000 nearly 90% sold for cash.
Under 100,000 detached and attached villas about 35% sold for cash.
Under 100,000 condominiums 80% sold for cash.
100,000 to 300,000 single family homes approximately 20% more homes sold for cash than financing
100,000 to 300,000 condominiums approximately 50% more sales were cash than financing
300,000 to 500,000 10% more sold for cash than were financed
300,000 to 500,000 when attached and detached villas are included with single family homes 30% more were cash than financing
300,000 to 500,000 condos 50% more were cash than financing
500,000 to 1,000,000 single family homes, villas, attached villas and condominiums all seem to show the same trends with about 50% more cash sales than financed sales
1,000,000 to 2,000,000 30% more single family homes, attached and detached villas sold for cash than financing
1,000,000 to 2,000,000 90% more condos sold for cash than were financed
Currently the market is experiencing a reduction in inventory and increase in prices. Consequently, there are less sales, because there are more buyers priced out of the market. In the summer time, there are less buyers. Often, in the summer properties which were priced too high begin trying to compete by lowing their prices.
There are always many properties priced inappropriately high in relationship to their comparable closed sales prices. These properties may not qualify to be purchased by anyone who is seeking financing, unless the buyer wants and can pay, the difference between the appraisal and the purchase price. Most buyers do not want to “overpay” and many simply can not afford to do it. Those sellers must sell to the buyers who do not care whether a property will meet an appraisal in regards to value. The trends indicate there are a significant number of buyers in Southwest Florida who are willing to pay more than market value for a property. Consequently, this is what accounts for the ongoing increase in market values. This trend has been going on for over a year which is why overall appreciation in value has been steadily moving upward. Most recently there is an even more dramatic upward trend in prices in some areas where the inventory is scarce.
Because so many Southwest Florida properties are second homes, they are often sold with the furnishings. Furnished properties are most often purchased by buyers who have excess cash to contribute to purchasing the furnishings separately in the transaction. Lenders and banks will not allow furnishing to be included in the purchase price of the mortgage.
The price of the furnishing is often including in the purchase price of a property to be sold as a package to a cash buyer. In this case if the buyer is concerned about the price of the real estate, they must make a determination as to the value of the furnishing and what they are willing to pay for the “package.” My recommendation is that the buyer negotiate for the purchase price of the property separate from the purchase price of the package of furnishings.
There is NO additional cost to obtain my exclusive buyer broker services.
Beverly Howe has served Southwest Florida real estate buyers in Naples, Cape Coral, Fort Myers, Fort Myers Beach, Bonita Springs, Bonita Beach, Estero, Ava Maria Florida and the surrounding areas with
Integrity, Loyalty, Honesty, Skill and Expertise since 1981
Beverly Howe, Owner/Broker, ABR, GRI, TRC, CIPS, MCNE, SRES, ACCRS
1031 Exchange Specialist – Graduate Institute of Luxury Home Marketing – ILHM
I am friendly and easy to talk to. Phone calls are the best way to contact me.
Please leave a message if I do not answer. I will return your call ASAP.
Toll Free: 1-800-283-7393 US & Canada
Best Local Direct: 1-239-601-2013