The Buyer’s Market has Begun !

Huh… What Buyer’s Market??

The Seller’s market in real estate peaked in September of 2005. Historic trends suggest that the next Seller’s market might peak in another six to eight years. In between these Seller’s markets is what we’ve all been waiting for –the Buyer’s Market !

Let me tell you, the Seller’s market over the last 3 years has been no fun at all. In 2005, properties were appreciating at 5% per month. Buyers stood in waiting lines that lasted for months. It doesn’t take long to get priced out of the market. And as a Buyer’s Agent, it was frustrating to encounter a “take-it-or-leave-it” attitude from Sellers.

Some statistics…

In January of 2005, there were 3,000 single family homes listed in the Ft Myers MLS. This actually represented less than 3 months inventory and in reality, was a very tight supply situation. By December of 2005, the market had already peaked and the inventory had doubled to 6000 homes.

By April of 2006, the number doubled again to 12,000 homes. The expansion of the inventory of homes is still growing but at a much slower pace with the number of single family homes hovering just above 13,000 homes.

When you add condos and townhouses, the total exceeds 22,000 homes.

In Naples, the pattern is similar although the size of the market is roughly one-half that of Ft. Myers.

Some interesting observations…

· Inventory has grown due to the obstinacy of Sellers who refuse to accept reality and the immutable law of supply and demand. As we enter the winter high season, Sellers are hoping that we will return to the heyday before the market peaked. I am amazed that the Seller psychology is one where there is great comfort to be in the same boat with other Sellers and overpriced homes—all who are not selling either.

· The good news is that all Sellers do not act in unison. There are many realists who have substantially discounted their asking price to sell their property. As the market ages, the number of Sellers that actually want to sell their homes will increase.