When buyers of real estate began cautiously moving back into the Southwest Florida real estate market when there was plentiful inventory at rock bottom prices, there were skeptics questioning whether it was the right time to buy.
Certainly, the communities which were experiencing excess inventory, sometimes decades of inventory, were not without their challenges. There were the brave who decided that it was the time; the time to buy, the time to plan their retirement, the time to upsize, downsize or get off of the sidelines and back into the market.
The thing about a down real estate market is that there are always folks who are trying to gauge the bottom, the precise moment when prices will go no lower and inventory is absorbed to reasonable or near balanced levels. It’s nearly impossible if not difficult to do. It’s like watching the pendulum in a grandfather clock swinging and clapping when it is precisely at the exact bottom. If a person clapped slightly before or after the exact, centered bottom of the pendulum swing, would they still not be close enough to get the majority of the full swing of the pendulum? If there was a room full of people, maybe there was one who, because they clapped in the right place at the right time, appeared to time it perfectly.
There’s safety in numbers. With the unit sales we’ve been experiencing we’ve sold off a lot of inventory. It’s brought in a new wave of buyers who have now found their confidence in the real estate market and are out looking for their bargain real estate. There is no denying that there are still great deals out there. The key is that the buyers of today need to be looking for their own deal and not a deal they heard about, whether it’s fact or fiction.
This week I received a phone call from a buyer looking for an opportunity to purchase and possibly rent until they’re ready to move in. I ran a few scenarios for the complex he was interested in and shared with him the last few closed sale prices and the fact that while there’s always something that pops on from time to time there were no units on the market in the entire complex right now.
This fellow seemed taken aback by the pricing, which was still a value compared to many other “like kind” communities in the area. He then said, “I am looking for a deal just like you found for Mike.”
What this buyer didn’t know was the truth about Mike’s deal. Mike was out looking for real estate to pick up at a value when it wasn’t cool to buy Southwest Florida real estate. He was fortunate to be purchasing that time. He essentially clapped at precisely the bottom of the pendulum swing. Mike didn’t tell you that he almost backed out of the deal until he was shown in great detail, why his purchase had such great potential, what the inventory and absorption rates were for this particular price point and housing complex and most importantly how much our market had improved.
It’s really difficult for some consumers to believe that conditions have improved and that prices have actually gone up in some areas and price points. I just doubled checked Mike’s purchase price against recent closed sales in his complex. First, there are still no units available and second, due to lack of inventory, the last few sales have each inched up in price. The last closed sale price was 13.75 percent higher than the price that Mike’s purchased at.
There are some really great values out there but capturing an identical deal to something that happened last year may not be realistic at this point. At this time, we just don’t have the excess inventory that was responsible for creating the low prices. You had to know it wasn’t going to last, right?
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Chris Griffith is a real estate agent at Downing-Frye Realty Inc. in Bonita Springs. If you have a question about local real estate or Bonita Springs, e-mail her at chris@LifeInBonitaSprings.com.